IN THE PHILIPPINES, as in many other countries, Non-Government Development Organizations (NGDOs) continue to increase in number. This trend, plus the growing awareness and capacities of partner communities and governments in participatory development activities, are influencing NGDOs in two ways. The first is that NGDOs are forced to explore their niche and enter into partnerships with local and international organizations, including governments. Secondly, this puts pressure on NGDOs to maintain and improve the efficiency and professionalism in their operations. Unless an NGDO is able to keep up with these two demands called for by the changes in the development community, it is likely to close in the face of competition for resources. NGDOs are now finding it difficult to maintain credibility to find funds to keep them going. These organizations also experience leadership crisis due to the fast turn-over of its leaders. Given these scenarios, NGDOs must make dramatic improvements in their organizational performance to stay competitive and form partnerships with the other players in the development community. These dramatic improvements in performance are called "stretched goals". When such goals are set, organizations must create new processes, activities, programs and responsibilities accordingly to cope with change and reach their goals. Core performance indicators are essential to identify the types of changes and adjustments necessary for NGDOs to achieve their stretched goals. Although organizational assessment tools currently exist, most were developed based on the experiences of the business sector. As Stone and Critteden (1993) found in their review of literature on strategic management, there is no criteria for measuring performance or effectiveness within a nonprofit organization. This is largely due to NGDOs focusing on input or process, rather than outcome. The solution is to clearly define the performance criteria for development organizations so that the appropriate organizational assessment tools are developed to help NGDOs manage change without compromising effectiveness.