Although innovation is a critical success factor for any organization, its measurement and evaluation still has not been fully addressed especially in the context of nonprofit organizations (NPOs). This paper aims at integrating factor analysis and analytic hierarchy process (AHP) to evaluate innovation of NPOs. As a result of our literature review, three types of NPOs’ innovation, namely climate for innovation, service innovation, and management innovation were identified. Factor analysis techniques were then performed based on survey data from Chinese NPOs to establish the measurement scale of NPOs’ innovation. Finally, AHP together with a case study was carried out to clarify how to evaluate the proposed measurement scale of NPOs’ innovation.