In child care for example, standards for adult-child ratios exist, but little is standardized in terms of the quality of care delivered. Similarly, arts groups, advocacy organization, mental health agencies and community development corporations face substantial challenges in measuring their effectiveness. Furthermore, most nonprofit organizations do not have the benefit of unambiguous market feedback to let them know how well they are serving their clients. Thus, assessing cost-effectiveness and comparing alternative actions is difficult. Different individuals also may make different assumptions about the relationship between cost and effectiveness.
Some groups essentially ignore the issue assuming their efforts are as effective as they can be.
A county-wide agency that provided substance abuse counseling and crisis support to youth had divided its programs into several smaller units. When faced with a drop in unrestricted funding, the group had to decide how best to cut back its services. Because the group had little objective data on the outcomes of the carious program initiatives, and because much of their funding was raised through private contributions, the organization could not decide how to manage the reduction in funds. The first role is analogous to protecting the interest of stockholders or voters. The second role complicates the distinction between governance and management because, in this role, board members do staff-like work.