Nonprofit organizations receiving government contracts are now central to the provision of a host of public services, including community care, workforce development, substance abuse treatment, and early childhood education. Government’s increased dependence on nonprofits has in turn prompted more intensive efforts to hold nonprofit service organizations accountable for the expenditure of public funds, especially through greater regulation such as performance-based contracting. Overall, these regulatory strategies do not directly address the governance of nonprofits or their engagement with the community and citizens; instead, the focus of performance management is on government programmatic priorities. The central argument of this article is that the inattention to governance and citizen engagement can undermine good performance and program sustainability. Consequently, this article offers a framework for government and nonprofit managers to integrate performance management and citizen engagement. This approach requires a more inclusive performance management strategy that emphasizes programmatic goals as well as sound governance and ongoing support for citizen participation. Indeed, only by close attention to community and citizenship, broadly defined, can the promise of innovation and performance by nonprofits be effectively realized.
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