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Performance measurement in nonprofit governance: an empirical study of the Minnesota independent school districts

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Abstract

Linearity and input separability assumptions are pervasive in most nonprofit cost and performance measurement systems. In this paper, we employ both parametric and nonparametric econometric methodologies to test the linearity and input separability assumptions using data collected from the Minnesota independent school districts. Our test results reject both the assumptions for the Minnesota independent school districts. These findings suggest a need to develop alternative procedures that do not rely on these two pervasive assumptions if the information provided by not-for-profit performance measurement systems is to be relevant for decision making and performance evaluation.

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Authors and Affiliations

  1. Merves Chair in Accounting and Information Technology, Fox School of Business, Temple University, Philadelphia, PA, USA

    Rajiv D. Banker

  2. KPMG Professor of Accounting, LeBow College of Business, Drexel University, Philadelphia, PA, USA

    Hsihui Chang

  3. Milgard School of Business, University of Washington, Tacoma, WA, USA

    Ehsan H. Feroz

Authors
  1. Rajiv D. Banker
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  2. Hsihui Chang
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  3. Ehsan H. Feroz
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Correspondence to Hsihui Chang.

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Banker, R.D., Chang, H. & Feroz, E.H. Performance measurement in nonprofit governance: an empirical study of the Minnesota independent school districts. Ann Oper Res 221, 47–71 (2014). https://doi.org/10.1007/s10479-011-0836-0

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