Moving beyond nonprofit metrics

The article from Stanford's Social Innovation Review, Measuring Social Value, explained the difficulties in measuring social value across industries for a number of reasons. While the author's tool to guide internal decision making is beneficial. It left me with questions on how a foundation would evaluate the success of a NGO -- not just evaluating hard numbers but program effectiveness as a whole. The Skoll forum mentioned a key differentiator that foundations, philanthropists, etc should focus on: "evaluating program effectiveness in regards to it's mission vs. evaluating a program on it's organizational performance." It shared these five questions organizations should use to evaluate:

1. What are the most critical elements that signal that a nonprofit is deserving of a donation?
2. What is the most meaningful financial information that can help a donor determine a nonprofit’s ability to sustain their organization?
3. What is the most meaning non-financial information that can help a donor determine a nonprofit’s ability to successful implement programs that work?
4. What is the most meaningful information that can help a donor determine how much of a difference a nonprofit’s programs actual make?
5. Since much of the information of interest to nonprofit analysts is released only on a voluntary basis by nonprofits, how should they react when some charities share substantive information, revealing weaknesses and past failures, while the vast majority share no substantive information?

My opinion is that organizations should first work on answering the questions above then use that information to help generate what specific metrics will prove useful in determining how effective a program is. 

This leads me to wonder: How many NGOs have "failed" in the world because the wrong information was used to evaluate their performance?

Source: http://skollworldforum.org/2010/09/08/nonprofit-analysis-beyond-metrics/