1. How to shape a Performance Management System for a
Social Enterprise?
The KaBOOM! Case Study
Fundamentals of
Sustainable Accounting & Finance
(Cristiana Parisi)
Presented by
Christian Emigholz
16th July.2009

2. Agenda
• Short introduction to KaBOOM!
‣ What they do
‣ How they work
• Introducing a Performance Management System
(PMS)
‣ Objectives of a PMS for a Social Enterprise
‣ Difficulties on the road
‣ Defining return & measuring performance: The KaBOOM!
Formula
• Summary & Discussion

3. KaBOOM! - What they do:
• Social Enterprise founded 1995 by a Civic Engineer
in response to a tragic accident
• Vision (2002): „Develop a country in which all children
have within their communities fun and health play
opportunities, with the participation and support of
their families and peers“
• Playgrounds and skate parks in order to
‣ Tackle obesity-related health problems
‣ Foster learning and social skills through playing and interacting
‣ Let children grow up with a safe place to play (CEO Hammond)

4. KaBOOM! - What they do:
• Social Enterprise founded 1995 by a Civic Engineer
in response to a tragic accident
• Vision (2002): „Develop a country in which all
Social Enterprise:
children have within their communities funsocial and
„Social enterprises are distinctive because their
health environmental purpose is central toparticipation and
or play opportunities, with the what they do.
support of their families and peers“ their main
Rather than maximising shareholder value
• aim is to generate profit to further their social and
Playgrounds andgoals.“ (www.socialenterprise.org.uk) to
environmental skate parks in order
‣ Tackle obesity-related health problems
‣ Foster learning and social skills through playing and interacting
‣ Let children grow up with a safe place to play (CEO Hammond)

5. KaBOOM! - How they work:
• Mission (2002): „Every child through the
participation of their communities should have
healthy play opportunities“
• Building a playground by
1. Partnering with corporate partners to generate funds (e.g.
Nike, Crysler Foundation, FannieMae)
2. Bringing corporate partners and communities together
3. Children designing their dream playground
4. Organising volunteers from corporations and communities
to build the playground

6. KaBOOM! - Strategy:
Lead Seed Rally
•Example-building •Provide support, •Individual partners
playgrounds and planing tools and („Playboard“) who
organisation through encouragement to foster & organise
KaBOOM! interested community playground building
•Very time intensive groups •Incentive to be
•Shift of work load recognised as „playful
and responsibilty city“
•Intensive PR Program

7. Agenda
• Short introduction to KaBOOM!
‣ What they do
‣ How they work
• Introducing a Performance Management System
(PMS)
‣ Objectives of a PMS for a Social Enterprise
‣ Difficulties on the road
‣ Defining return & measuring performance: The KaBOOM!
Formula
• Summary & Discussion

8. Why introducing a PMS?
• Initial Problem
‣ 2002: The Board was overwhelmed with information, thus
unable to truly asses KaBOOM!‘s performance
‣ Prove to funding corporations the ablility to set and reach goals
• Objectives
‣ consolidated timely, accurate and usefull information
‣ most important KPIs / consistent data points
‣ year over year benchmarks
• Goal
‣ help to set strategic goals and to possibly reshape the strategy
(„feedback loop“)

9. Why introducing a PMS?
• Initial Problem
‣ 2002: The Board was overwhelmed with information, thus
unable to truly asses KaBOOM!‘s performance
Implementing ato funding Score Card the ablility to set and reach goals
‣ Prove Balanced corporations
•Define strategy
• Objectives
•Define measures of strategy (incl. cause-
effect raltionships [causal maps] across 4
‣ most important KPIs / consistent data points
dimensions)
•… ‣ year over year benchmarks
(Anthony,‣ consolidated (1998), Management Controland usefull information
R.N. and Govindarajan,V. timely, accurate Systems, New York, Irwin
McGraw-Hill, pp. 459-475.)
• Goal
‣ help to set strategic goals and to possibly reshape the strategy
(„feedback loop“)

10. Problems on the road
• How can the performance of a social enterprise
be measured? Impact vs. Output-Measures?
‣ Reviewing Vision and Mission to clarify KaBOOM!‘s goal
‣ Main mission related output measure is therefore
playgrounds built
‣ Social impact shown by social change model
• Which measures to focus on?
‣ Relevant & reliable
‣ Financial measures are definately important; reflecting the
implications of other measures
‣ Scientific theories shouldn‘t be proofed with a PMS

11. Problems on the road
• How can the performance of a social enterprise
be measured? Impact vs. Output-Measures?
‣ Reviewing Vision and Mission to clarify KaBOOM!‘s goal
‣ Main mission related output measure is therefore
Vision playgrounds builtis a great place to play within
(new):"Our vision
walking Social impact shown byin America" model
‣
distance of every child social change
•
Mission (new):“Our mission is tofocus on?
Which measures to create great
playspaces through reliable
‣ Relevant & the participation and leadership of
communities“ measures are definately important; reflecting the
‣ Financial
implications of other measures
‣ Scientific theories shouldn‘t be proofed with a PMS

12. Agenda
• Short introduction to KaBOOM!
‣ What they do
‣ How they work
• Introducing a Performance Management System
(PMS)
‣ Objectives of a PMS for a Social Enterprise
‣ Difficulties on the road
‣ Defining return & measuring performance:
The KaBOOM! Formula
• Summary & Discussion

13. The DuPont Formula
DuPont formula
(for profit business)
Net Profit Margin
Profit
(net income / sales)
x
Total asset turnover
Efficiency
(sales/total assets)
x
Debt financing used to improve profits
Leverage
(total assets / common stock)
=
Return to shareholders Return on Equity (ROE)

14. The KaBOOM! Formula
DuPont formula
Social Enterprise measures
(for profit business)
Profit/Mission related Net Profit Margin Created value for •# playspaces built
output (net income / sales) society •# LEAD builds in low income areas
•# Playmakers
x x
•Build efficiency (input vs output $)
Efficiency
Total asset turnover How efficient were •Program effiency (% expense programs)
(sales/total assets) internal ressources used •Fundraising efficiency (cost for fundr.)
•Cash, Burn rate, total budget
x x
Debt financing used to
•Earned Income
Leverage improve profits
How efficient were •Orga: Turnover rate & Culture rating
(total assets / common stock)
external ressources used •Brand: Media mentons, CTR
•Total volunteers
= =
Incremental value to
Return to „shareholders“
Return on Equity (ROE) (children, foundations,
shareholders
communities,
corporations…)

15. The KaBOOM! Formula
• Derived from DuPont formula
• Defines
‣ that return of KaBOOM! = (Output) x (internal efficiency)
x (external effciency)
‣ categories to which quantitative measures are allocated
(these are different to those of the BSC)
• Return of KaBOOM! is „incremental benefit to
its shareholders“
‣ children, foundations, communities, corporations…those
who have a legitimate interest that KaBOOM! performs
well in the three categories
‣ Additional benefit to society through KaBOOM!‘s work

16. Summary
• The return of a purpose driven organisation (i.c. Social
Enterprise) is different from a for-profit organisation
• Before the return can be measured, it‘s relevant to clarify
how the purpose (vision & mission) is reflected in numbers
‣ Output measure playspaces built
‣ Social change model to explain the impact
• The KaBOOM! Formula results into the incremental value
created for various stakeholders („society“) through
‣ Output
‣ efficient use of internal and external ressources.
• The performance in these dimensions is assesed through
relevant and reliable measures

17. Discussion: BSC & KaBOOM!
What characteristics does the KaBOOM! Formula share with the
balanced scorecard. In which respect is it different?