Primary objectives, performance measurement and financial reporting

In this lesson

1. 0:00 Not for profit and public sector entities
2. 0:21 Primary objectives of non-profit organisations
3. 1:29 Performance measurement and value for money
4. 2:01 The three E's framework explained
5. 2:49 Key performance indicators for hospitals
6. 4:02 KPIs applied to educational institutions
7. 5:08 Financial reporting challenges and conflicts
8. 7:06 Identifying financial KPIs for charities

About this lesson

You'll explore the primary objectives that drive charities, educational institutes, government departments and health services: serving communities, ensuring value for money, and using resources efficiently. The session focuses on the three Es framework for measuring value for money: economy (obtaining inputs at lowest cost), efficiency (maximising output from those inputs), and effectiveness (achieving your objectives). You'll see practical examples of how hospitals and schools apply these measures—from controlling medicine costs and managing waiting lists, to monitoring student-to-teacher ratios and exam pass rates. This framework is essential for understanding how non-profit organisations demonstrate accountability to their stakeholders. You'll also discover the specific challenges in financial reporting for these organisations: non-financial performance indicators are often subjective and difficult to measure, multiple stakeholders create conflicting objectives, and key performance indicators can work against each other. The session concludes with worked examples of identifying relevant financial KPIs for charities, showing you how ratios like quick ratio and budget variance analysis remain important, whilst profit-focused metrics like return on capital employed become irrelevant. This content directly supports your Financial Reporting and Performance Management studies, equipping you to analyse and discuss not-for-profit sector organisations with confidence in case study and exam scenarios.

Duration: 10m