The Financial Perspective (Part 4)

The not-for-profit sector which includes presenters has taken action to improve its financial condition. A survey of not-for-profit organizations (including theaters) by Salamon and Sullivan (2004) found that cutting costs and programs were cited as the most effective strategy; while productivity enhancements were cited by 10 percent of respondents. Fees and increasing program margins, advocacy, targeted marketing and forming coalitions represented the most effective growth initiatives. Table 8 presents the ten most effective strategies as cited by respondents.

The financial perspective and of the balanced scorecard is divided into productivity and growth strategies which includes; increasing asset utilization, improving cost structure, enhancing customer value and expanding revenue opportunities. Table 9 summarizes these strategies, performance metrics and benchmarks indicated by the literature for increasing productivity in the financial perspective of presenting organizations.

Table 8

 Top 10 Most Effective Strategies (Salamon and Sullivan, 2004, p. 7)

Strategy	Percent who claimed it effective
Cut costs	27%
Reduced program jobs	16%
Fee-for-service/margin	15%
Reduced administrative overhead/jobs	14%
Advocacy	12%
Marketing - targeted	11%
Coalitions	11%
Marketing - general	10%
Productivity enhancements	10%
Cut programs/program capacity	8%

Table 9

Objectives and measures for the financial perspective; productivity strategies.

Financial Objective	Performance  Metric	Industry Averages
Productivity strategies Increase Asset Utilization Capacity Utilization Marketing Efficiency Development Efficiency Coalitions/partnerships Improve Cost Structure Increase Program Margin Reduce Administrative Costs Facility Costs	No. of seats sold/available Revenue/marketing expense Contributions/fundraising expense Rental revenues Program revenue/program expense Percent of all expenses Percent of all expenses	81% 3.19 7.93 .73 11% Not available