Internationally, nonprofits are increasingly perceived as being appropriate vehicles for implementing social policies and cut public expenditure. They are also "believed to possess a string of democratic values that can help to foster such highly desirable conditions like trust among citizens, commitment, participation and community renewal."
In her research paper, Lena Lindgren observes that "most of the promotion of New Public Management (NPM) comes from countries like USA, UK, Australia and New Zealand. Over the years, and albeit in varying degree, it has spread to other countries as well." Moreover, "the use of (NPM) principles like performance measures implies an administrative culture that focus strongly on the achievement of results. Although no one would want to seriously argue principally in opposition to such a focus on results, many authors have pointed to the many pitfalls involved such as the phenomena of ’goal displacement’."
She continues by saying that "this means that if a system of measures and a program diverge too much in terms of inherent value systems, there is a great risk that the wrong activities are emphasised. As a result, the measures distort the direction of the program, diverting attention away from what it should be doing."
Furthermore, she notes that "considering all the hope given to the third sector, I find the above-cited debate about performance measures to be of great importance. As we have seen, the main reason behind the belief that nonprofit organizations can help to solve our modern welfare needs has to do with the democratic values to which they subscribe. At the same time, the increasing welfare role subjects nonprofits to accountability requirements such as the use of performance measures."
In conclusion, she asserts that the "use of performance measures may at first sight be seen as a purely technical process, but it actually carries values borrowed from the world of private business and founded on neo-classical microeconomics. These values are not readily integrated into public sector culture and, certainly to an even lesser extent, into nonprofit culture. In light of the conflict and tension that the meeting between nonprofit values and the market-and efficiency-oriented performance measures should entail, there is an obvious risk for goal displacement."
Read The Non-profit Sector Meets the Performance-management Movement: A Programme-theory Approach by Lena Lindgren via the SAGE Publications website (NB: Full text only available to paid subscribers)