If someone wants to make a difference and change world (especially developing countries), I believe there has to be financial incentives : social entrepreneurship.
When it comes to foreign relief/charities, it's a really tough call. On one hand, oppressive governments are incentivized to actively show their people at their worst so that they can get more money and in turn collect graft (e.g. Saddam Hussein and baby incubators), but on the other what are the rest of us supposed to do? Let these people die? We play right into the hands of their governments when we don't. Following natural disasters, war/strife, I also personally feel a strong need to help. In these scenarios, there can be no room for sustainable profit because they tend to be unique/unusual events.
Non-profits do not actually aim at financial gain (duh!), so measuring their success in monetary term is an error of categories. Of course it is difficult to assess success of an endeavour like that, and Aaron is right in raising awarness for these difficulties, but forcing an inappropriate kind of measurement (did your non-profit make enough profit?) on them doesn't help solving this problem.
The correct question to ask are "what are our goals?" "How do we go about reaching our goals?" "Did our past activities in fact further our goals?" and so on. "how much more money did we raise and distribute" may factor in the analysis, but on its own it is pretty meaningless.
Sometimes (and I'm afraid more often than even I suspect) instead of generating profits what would be "profits" instead accrue to what I'll call local empire building - managers building their own little fiefdoms of employees who report to them. Generally there's not as much pressure to stop it if the organization is reasonably well funded. Alternatively, they pay themselves more to soak up any potential profit so they can perversely call themselves not for profit.
Otherwise I agree - choosing metrics is not an easy task to be taken likely. Profitability/+cash flow are however far easier metrics to measure and manage.
Of course, the contributors benefit from donating money, etc by signalling effects and warm fuzzies, but that doesn't mean the recipients are benefiting nearly as much as the contributors are spending.
Some value isn't easily captured and that's a perfectly legitimate reason for nonprofits to exist.
...and you didn't pay for it, and we don't run ads. Do you feel that we benefited you, and did more good than harm?