Nonprofit organizations are under pressure to demonstrate their achievements. As a result,rnnonprofit Organizations performance measurement is receiving increasing academic andrnpractitioner attention. Despite this fact, there are many challenges that exist when measuring thernperformance of nonprofit organizations. For instance, intangibility of service offered,rnin measurability of their missions, and differing interests of different stakeholders are few of themrnand have been addressed in the literature.rnrnTo address the objectives of study, mixed method research design was adopted. Data wasrncollected from forty Nongovernl1lental organizations operating in Addis Ababa through surveyrnin the first phase and in the second phase; interviews were held with two interviewees to betterrnunderstand the result obtained in the first phase. The techniques of analysis used in this studyrnwere descriptive (frequency, percentage and mean) and inferential analysis (chi-square test).rnResult indicate that external reason mainly the requirement from funder and government werernthe main reason for measuring performance as compared to the internal reason. Besides, out ofrneight reasons for measuring performance included in the survey instrument, more than fiftyrnpercent of respondents showed a higher degree of agreement to four items as the most reason forrnmeasuring their performance. Result also showed the dominance of output performancernrnmeasurement whereas outcome measures were the lowest areas of activities. Furthermore, resultrnin the second phase of shows lack of resource and staff skill in conducting outcome measurementrnas the main barriers towards the low implementation of outcome performance measures.