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Although the non-profit marketization literature argues that governments’ performance-based accountability demands can hinder non-profit organizational performance, the rational planning literature suggests a more positive yet indirect impact. To unravel the mechanisms at play for those steering their organization, we investigate (1) if performance-based accountability can alter how non-profit directors’ perceive organizational performance and (2) if such relationship is mediated by rational planning inspired practices. Results from structural equation modelling on two-wave survey data among 297 non-profit directors in Flemish non-profits confirm that management tool use and performance measurement are central in explaining how performance-based accountability impacts subjective performance.

Does performance-based accountability impact how non-profit directors perceive organizational performance? Insights from rational planning