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Crafting Alliances

Regardless of how successful a social enterprise is at mobilizing funds, mostorganizations will inevitably face resource and capacity constraints as a

limiting factor to achieving their mission. The resources that any single organi-zation brings to bear on a social problem are often dwarfed by the magnitudeand complexity of most social problems. Thus, social entrepreneurs often pursuealliance approaches as a means to mobilizing resources, financial and nonfinan-cial, from the larger context and beyond their own organizational boundaries, toachieve increased mission impact. Social enterprise alliances among nonprofits,nonprofits and business, nonprofits and government, and even across all sectorsin the form of tripartite alliances between nonprofit, government, and businesshave become increasingly common in recent years. Because alliances capitalizeon the resources and capacities of more than one organization and capture syn-ergies that would otherwise often go unrealized, they have the potential to gen-erate mission impact far beyond what the individual contributors could achieveindependently. This chapter first describes some alliance trends in the social sec-tor and illustrates them with case examples. Next, we introduce a conceptualframework that can be helpful for developing an alliance strategy. Finally, webriefly introduce the chapter’s two case studies, which offer readers an opportu-nity for in-depth analysis of a range of alliance approaches.

ALLIANCE TRENDS

Increased Competition

Increased competition due to a growing number of nonprofits coupled withrecent overall declines in social sector funding have contributed to a dramatic

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increase in the number and form of social enterprise alliances. In the UnitedStates alone, the number of nonprofits doubled in number between 1982 and1997,1 and in the last decade, the number has increased an additional 64%.2

Additionally, government funding, which makes up nearly one-third of nonprofitrevenues, has remained stagnant or declined over this same period,3 while totalgiving has also declined. Beyond increased competition for funding, changes inpublic policy to foster competition such as vouchers for social services have alsointensified competition among many social sector organizations.4 Additionally,in many social sector industries in which private sector competition has beengrowing, such as in education and healthcare, nonprofit organizations may seekto partner with each other in order to compete with their well-financed corpo-rate competitors.5 For example, The Health Services Partnership, a managementservice organization, was founded through an alliance between two independentcommunity health centers located just a few miles from each other in Dorchester,Massachusetts. In response to the increasingly competitive healthcare environ-ment, the growth in managed care, and other Boston-area healthcare organiza-tions joining forces and becoming more formidable competitors, Codman SquareHealth Center and Dorchester House Multi-Service Center established analliance in 1998 to manage selected services, such as information technology,care coordination, and managed care contracting and member services for bothcenters, and to help each of them meet the various challenges that they faced. Thealliance is focused on building an infrastructure to improve managed care par-ticipation and clinical performance, while at the same time supporting the publichealth and community missions of each health center.

Demand for Efficiency

Alliances are also being pursued as a way to achieve a range of efficiencygains, from achieving more with fewer resources to increasing the speed atwhich outcomes can be achieved. In recent years, there have been calls by manystakeholders for greater coordination in many social sector activities. Manydonors have noted that there are too many organizations doing similar things,leading to a waste of resources and duplication of effort. Thus, many fundershave come to view partnerships as a key way of achieving greater impact withtheir resources. Some funders have even stipulated specific partnerships amonggrantees as a requirement for receiving funding. A 2003 Urban Institute studyon foundation attitudes and practices of 1,192 grantmaking foundations in theUnited States found that 69% reported that they actively encouraged collabo-ration amongst grantees, and 42% of these said that they sometimes requiredpartnering as a condition for funding.6 Alliance approaches are often pursued

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by social enterprises that seek to tap into these funding sources. Althoughefficiency gains from alliances can vary from basic reductions in administrativecosts, to more significant gains such as increasing the resource flows and aware-ness of a social issue through coordination among network members, to mobi-lizing and deploying resources and expertise more optimally across networkmembers through specialization, many nonprofits fail to realize the full poten-tial of alliances because they pursue them in an opportunistic or ad hoc man-ner, often in an effort to secure funding. Such alliances often focus on a specificprogram or a peripheral organizational activity. The alliances themselves arenot treated as an integral and strategic part of the organization’s activities, andtherefore the engagement and outcomes of such alliances can be limited. Indeed,alliance partners are often disappointed with the results of an alliance, feelingas if the collaboration did not adequately meet either of the partners’ needs.7

Outcomes of this type lie on one extreme of the outcome continuum.In contrast, alliances that are viewed as core to the organization’s strategy for

achieving mission impact have much greater potential, including limiting redun-dancy, spreading costs across network members, drawing on expertise across thenetwork, and attracting greater visibility and funding to the network members.These alliance outcomes can enable partners to generate greater mission impactthan the individual entities acting alone. Alliances also have the potential toenable a social enterprise to achieve significant mission impact more quickly bymobilizing existing resources, infrastructure, and expertise than if organizationshad to develop these assets independently from the ground up. Alliances areoften viewed as a way to increase efficiency by spreading the costs for develop-ing infrastructure such as performance measurement systems, and even leader-ship or employees, across more than one entity. For example, Women’s WorldBanking (WWB) is a microfinance NGO whose goal is to increase the economicparticipation of as many of the 500 million low-income women worldwide aspossible by building performance standards and financial systems to serve theirneeds. WWB’s strategy relies almost entirely on developing alliance networks ofvarious organizations to expand services and coordinate microfinance servicesacross the globe. Rather than seeking to offer microfinance services directlythrough a traditional hub-and-spoke model, WWB built a network of alliancesamong existing local microfinance organizations by providing and organizingsupport to network members to do their work more efficiently and effectively.Members of the WWB network have benefited from the availability of supportthat would have been cost prohibitive for NGOs working independently. WhileWWB affiliates focus on providing direct services, WWB staff concentrates onactivities for which scale is beneficial and generates collective cost savings.This includes technical and financial services such as microfinance operations,market research and loan guarantees, and advocacy on microfinance policy and

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regulatory change. WWB staff also manages “learning networks,” which diffusebest practices through meetings and exchange visits among members, reinforcenetwork performance standards, and coordinate interactions among networkmembers and policy makers. WWB achieves impact not only by supporting net-work members to get what they need to succeed but also by helping to shapefinancial systems and industry standards so that regulatory and legal structurescontinually evolve in favor of the microfinance industry. While individual NGOscould not easily justify these investments, network members invest collectively inorder to learn from each other to improve their services and realize significantbenefits because these scalable activities are performed on their behalf by WWB.For WWB itself, building alliances with and among other microfinance providershas made possible a greater increase in poor women’s access to finance, knowl-edge, and markets, and enabled the organization to deliver on its goal of havinga “major impact on expanding the economic assets, participation, and power oflow-income women as entrepreneurs and economic agents” at a relatively lowcost and in a timely manner.

Heightened Concerns About Effectiveness

In recent years, changes in both private and public funders’ expectations havecontributed to heightened concerns about accountability and effectiveness, whichin turn have also contributed to an increased interest in alliance approaches.Alliances can offer a way to approach social problems in a more holistic and sys-tematic way. Nonprofits can often identify complementary, or even competing,programs that could potentially increase the mission impact of their own programsor services. Working in alliance with such partners might enable nonprofits to offermore and better services to their beneficiaries, without causing mission drift orspreading resources too thinly across many activities for the organization. By gen-erating synergies among collaborating programs and investing to build collectivecapacity to solve systemic problems, alliances have the potential to achieve notonly greater efficiency and speed but also more sustainable mission impact. Forexample, Pratham, a nonprofit education organization in India, exemplifies howan alliance approach with other nonprofits, government, and business can be devel-oped to achieve efficient, large-scale change and sustainable impact. The organiza-tion’s goal to provide universal education to every child in India led it to work inclose partnership with corporations, business, and other nonprofits to deliver earlychildhood education. By mobilizing various resources from its alliance partners,Pratham has been able to roll out educational programs across India with very littleof its own capital and infrastructure. The organization is skilled at recruiting, train-ing, and retaining local teachers directly from the communities in which they work.


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Additionally, Pratham works with several prominent corporate partners, such asIndustrial Credit and Investment Corporation of India and Hindustan Petroleum,that provide not only office space and equipment but also management talent forthe organization’s executive team. Alliances with municipal governments givePratham classroom space and access to municipal schools to offer its remedial pro-grams for children at risk of dropping out of school as well as those who havedropped out of or never enrolled in school. The organization also works with othernonprofits, such as a community-based health service organization, that workthrough Pratham’s school network to deliver healthcare services and address someof the most common and pressing healthcare issues of Pratham students. Prathamhas found that this health service alliance helps them achieve better educationaloutcomes with their students because, not surprisingly, students can concentratebetter on their studies when their basic health issues have been addressed.Pratham’s alliance approach to delivering its education programs draws onresources from all sectors through a series of alliances and enables Pratham toachieve scalable impact efficiently, effectively, and sustainably.8

ALLIANCE STRATEGY

Clearly, the fact that alliances can be a powerful mechanism to mobilize moreresources, create synergies, and, ultimately, to achieve greater social impact hasled to increased interest and involvement in alliance opportunities of all types.However, despite their tremendous potential, the pursuit of alliance approachesis not something that should be undertaken without due consideration.Working via an alliance entails significant initial and ongoing investments ofresources and time. Many challenges can arise as partners try to develop con-sensus, coordinate their activities, and adapt their cultures to achieving ashared vision. Indeed, working through an alliance can initially require moreresources, effort, and patience than operating independently. Furthermore,because alliances often involve significant adaptations, development, and invest-ments, the benefits realized from an alliance may play out over a long period oftime. Alliance partners must be patient and committed to seeing the partner-ship through to the point where outcomes can be realized. In order to achievegreater mission impact through alliances, organizations must not only engagein individual alliances effectively but also actively manage their ongoing devel-opment and evolution, and, perhaps most importantly, create an overarchingalliance strategy that guides individual alliance investments and decision mak-ing. Ultimately, the goal of the broader alliance strategy should be to constructindividual alliances that together enable the most effective, efficient, and sus-tainable creation of social impact. The number and range of potential alliance


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opportunities available to a social enterprise are often far greater than can orshould be pursued. Each alliance opportunity also entails opportunity costsand risks. Social entrepreneurs not only must analyze whether a particularalliance is worth engaging in at the moment but also must think strategicallywhen deciding which alliance investments provide the greatest leverage andenable them to achieve the greatest impact relative to cost. Furthermore, orga-nizations vary in the degree to which they engage in alliance approaches. Onone end of the continuum are organizations for which alliances are peripheralactivities that are not integrated into the organization’s core operations. Forexample, alliances can be pursued at the program or project level to create effi-ciencies and synergies on a relatively narrow aspect of the organization’s activ-ities. Such alliances may require a relatively low investment of resources—theoutcomes of these alliances will likely be commensurate with the investment.At the other end of the continuum are organizations for which alliances areintegral to the way in which the organization generates value. In this case, anonprofit seeks to develop a portfolio of alliances that when taken togetherenable a systemic, integrated approach to social value creation among networkmembers. These types of alliances will require significantly greater investmentsbut will also offer the potential of much more significant returns. Regardlessof where along this continuum an organization may lie, a social enterprisemust be clear on the role that alliances can play in achieving the organization’smission. While there is no single optimal position in which to be on the con-tinuum, investment in an alliance strategy will help to guide individual alliancedecisions and will enable the development of a portfolio of approaches thatamounts to more than the sum of the individual parts.9 Many organizations areso busy trying to manage their own day-to-day operations that when they pur-sue alliances, they tend to engage in a rather limited, transactional manner.Without a doubt, allocating the resources to building alliances is already a sig-nificant undertaking, and investing the time and effort to formulate a deliber-ate alliance strategy is even more resource intensive. However, if deliberateanalysis and planning of a coherent alliance strategy can enable an organiza-tion to achieve the full potential of its alliances, it will more than justify thecosts. Below are some of the key factors to think about in developing a com-prehensive alliance strategy.

Focus on Mission and Vision

To engage successfully in any type of alliance, an organization must be clearabout its own vision and mission and how the organization’s overall strategy andprograms serve to achieve these ends. By focusing on the vision and mission, andthe role that their organization plays in moving society closer toward that vision,


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the organization can begin to identify other potential alliance partners that existin the broader context, whether in the nonprofit, government, or business sector,and that can bring critical resources and capabilities to achieving the vision. Thekey objective to focus on in evaluating virtually all of the organization’s allianceactivities is mission impact, even before short-term organizational benefits. Thisrequires an evaluation of whether the potential alliance will enable the nonprofitto achieve mission impact more efficiently, effectively, or more sustainably overthe long term. The more adequately the alliance meets each of the three criteria,the more likely it will be worth the investment. Alliances may offer the potentialto significantly enhance the organization’s own activities in a number of ways.For example, in some cases, the organization’s existing activities might beenhanced by working through alliances that enable efficiency or effectivenessgains through a combined effort, whereas in other cases, an alliance might fill acritical gap in the organization’s own programs by contributing significantly toachieving the broader mission and vision. In still other cases, it may enable theorganization to develop capacity in its partners to generate social value, therebyscaling social impact. Regardless of the specific alliances that are pursued, orga-nizations should assess whether and how alliances might enable them to achievegreater mission impact. The work of Habitat for Humanity (HFH) in Egypt illus-trates this unwavering focus on mission impact. HFH is known worldwide forits organizational model of mobilizing volunteers and donors to build or reha-bilitate homes for homeowners with interest-free mortgages through thousandsof affiliate organizations worldwide. The organization’s mission is to eliminatepoverty housing by building and rehabilitating houses in partnership with home-owner families. The organization traditionally invested in and built affiliateorganizations as the primary means of delivering on its mission. In Egypt, thenational director, Yousry Makar, remained focused on the vision and missionfirst and foremost, rather than the specific means by which to achieve missionimpact. The country’s overwhelming need for housing (approximately 20 millionof the country’s 70 million people live in substandard housing or are homeless)led Makar to pursue an innovative approach to delivering on the organization’smission. He established as the vision of HFH Egypt to directly empower com-munities to house 10% of those in need over 20 years, with an approach thatcould be spread independently to other local organizations, which in turn couldbegin to serve the remaining 90% independent of HFH Egypt. Although HFHbrought considerable expertise for developing housing programs, and couldcommit a significant amount of financial and human resources toward thisvision, Makar also noted that there were also tremendous resource constraintsthat limited HFH Egypt’s ability to achieve its vision independently. Limitationsranged from the enormous administrative and organizational capacity thatwould be required, to the organization’s limited knowledge of the local commu-nities and lack of relationships that would facilitate homeowner selection, to the


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need to establish credibility and relationships in the community to mobilizevolunteers, among other resources. In light of these tangible and intangibleresource constraints in the Egyptian context, Makar believed that the feasibilityof achieving this goal through the traditional HFH affiliate model was limited.Makar sought to achieve mission impact by building a series of alliances withexisting national NGOs and local community development organizations, ratherthan seeking to build his own organizational infrastructure from the ground upand competing for scarce resources with other established community organiza-tions. In Makar’s view, investing in and mobilizing local community organiza-tions to address the issue of poverty housing was the only way HFH Egypt couldever achieve significant and sustained mission impact.

Clarify Roles

In formulating an alliance strategy, it is critical for the organization toassess its own contributions as an alliance partner in order to be able to iden-tify potential partners. Each organization must be clear on its own focus, com-petencies, and capabilities in order to identify what roles alliance partners canplay in moving closer toward the vision. Habitat for Humanity in Egypt illus-trates how clarity about the organization’s vision, key competencies, and thepotential role to be played by alliance partners are critical to formulating a com-prehensive alliance strategy. Makar developed a series of partnerships withestablished community development associations to mobilize the resources nec-essary to deliver on HFH’s mission. HFH Egypt and its partners brought com-plementary skills and resources. The partnerships enabled HFH Egypt to buildon their partners’ established knowledge, credibility, and community develop-ment experience in the community. In turn, local partners recognized the tremen-dous housing need in their communities and wanted to leverage HFH’sexpertise and support to serve this need.

With each of its local partners, HFH Egypt sought to tailor the housingprograms to each community to achieve efficiencies and enhanced impact bydeveloping and leveraging existing local resources and expertise. HFH Egyptperformed extensive due diligence of its partners’ strengths and capacities,not only to ensure value alignment but also to be able to partner in a way thatprovided additional support only where it was needed. In some communities,issues of health or education already absorbed local leadership. Since it did notmake sense for HFH Egypt to enter the community and attempt to compete forthese resources in order to build its own infrastructure to address the housingneed, HFH Egypt sought to work together with these leaders and their com-munity organizations on their mutual interests, while at the same time adhering


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to the core principles of HFH’s model. Makar estimated that HFH Egyptrealized overhead savings of about $250,000 due to the cash and in-kind con-tributions from partners in the form of office space, staff, and training.

By developing a clear understanding of what their organization is capableof contributing to the cause and of what other critical assets potential alliancepartners can provide, organizations can formulate a coherent alliance strategythat enables more productive movement toward the vision. The process of tak-ing stock of the organization’s role and key roles that can be played by othershelps to identify potential alliance partners.

Define Values

While many might meet the criteria for an alliance partner from an opera-tional and strategic perspective, not all of these entities would qualify on thebasis of vision and values alignment. Clarity about the organization’s valueshelps to define the key expectations, methodologies, and norms that will guidenot only the organization’s own activities but also its alliance activities. Valuesare the key guiding principle that defines what is negotiable and nonnego-tiable in an alliance engagement. This is especially important because there isincreased pressure to pursue alliances, and organizations may be drawn intoforming them for the wrong reasons. Even if an alliance may appear to addvalue, if the potential risk of values incompatibility is high, then the chancesof subsequent costly conflict increase and the partner’s desirability decreases.Engagement in one alliance may often preclude the opportunity or ability toengage in others due to the opportunity costs of management and staff time.Although shared vision is fundamental, equally as important is a commitmentamong alliance partners to adhere to a shared set of values that will guide theactivity of the alliance. While a shared vision is what motivates the partners toengage in an alliance, it is shared values that help to govern the relationship informal and informal ways. Because it is virtually impossible to lay out everycontingency and dictate every process for how work should be done in analliance, shared values play a fundamental role in holding the alliance togetherand enabling it to function. To assess a potential partner’s alignment on visionand values requires extensive due diligence on the part of each alliance partner.This includes investigating everything from alignment on vision, ability andwillingness to commit resources and competencies to the alliance, and a proventrack record for impact on key constituents and in the community. For example,in implementing its alliance strategy, HFH Egypt did extensive due diligenceover a period of several months on potential partners. Most of their communitypartners were selected based on a successful track record in complementary


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community development areas such as microfinance, education, and health.In addition to their demonstrated performance, their work had been done in away that was consistent with HFH Egypt core values, which included integrityas demonstrated by following through on commitments; diversity, as demon-strated by nondiscriminatory practices in providing services; and equity, asdemonstrated by serving the needs of the community where they were greatest.To assess their potential partners’ commitment to these values, HFH Egyptinterviewed local leaders, local beneficiaries, and local NGOs to learn moreabout how their potential partner operated and what their impact was on thecommunity. Before engaging in any alliances, an organization must commit thetime and resources necessary to assess and evaluate whether there is sufficientcommon ground on which to build an alliance.

Invest for Impact

Alliance approaches require a willingness among nonprofit leaders, boardmembers, and funders to broaden the ways in which they seek to deliver on theorganization’s mission and vision. Rather than viewing their own organizationas the key mechanism for value creation, they must conceive of their organiza-tion’s role within a larger constellation of other actors, as the engine for creat-ing social value. Building such alliances not only requires significant initial andongoing resource investments but also involves ceding control and sharingrecognition for mission impact achieved with and through its network partners.Enhancing the organization’s mission impact by working with and throughother complementary and competitive entities is likely to be beneficial to a non-profit over the long term; however, successful alliances require more than self-interest to endure and thrive. Although organizational benefits are a commonoutgrowth of alliances, a narrow focus on advancing individual or organiza-tional agendas can undermine the trust necessary for an alliance to function pro-ductively. Instead, alliance partners must be committed to social impact as thekey measure of an alliance’s success. With this commitment, alliance membersrelate to each other as peers and equal contributors to achieving mission impact,each bringing critical resources and investing in a reservoir of goodwill thatenables joint action. For example, HFH Egypt invested heavily in local entitiesto support not only the development of local capacity to deliver housing pro-grams but also the development of a shared vision to address the root causes ofpoverty in their partners’ communities. Even though HFH Egypt provided alarge share of the initial financial capital, it acknowledges the equally valuablecontributions of its partners in the form of staff, network relationships, andlocal expertise. HFH Egypt sought to work as peers with alliance partners, even


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forgoing some of the traditional organizational benefits an organization wouldtypically gain, such as direct control over every aspect of the services, increasedfunding for HFH Egypt itself, and increased recognition and prestige associatedwith HFH Egypt. As a result, HFH Egypt built trust among its alliance partnersthat catalyzed the development and delivery of joint solutions that enabled themto effectively deliver on their shared vision, which was the ultimate goal. Makarviewed these relationships as going beyond transactional and opportunisticpartnerships geared toward advancing HFH organizational interests. It wasmore important that the housing programs were delivered efficiently and effec-tively, in concert with other community development activities, than whichorganization controlled, managed, and received recognition for the outcomes.What he sought to do instead was to make significant investments in localcapacity to drive the maximum creation of social value through HFH Egypt’snetwork of alliance partners over the long term. With the goal of bringing thelocal community partners to the point of self-sufficiency, HFH Egypt couldexpand its mission impact by phasing out of successful partnerships in order toreallocate its resources into new communities. In effect, HFH Egypt played anenabling role through these collaborations, thereby leveraging its resources andcreating a multiplier effect. In some communities, these partnerships were sosuccessful that within certain villages, HFH’s alliance partners began sharingtheir housing program expertise with their counterparts in other communitieswith little or no involvement from HFH Egypt, thereby achieving even greatermission impact for HFH Egypt. Indeed, some might question whether HFHEgypt gained sufficient organizational benefits or recognition for investing somuch in building its alliance network. However, since HFH Egypt’s leadershipconsidered mission impact as the key measure of return on its investment, thenthe outcomes more than justified the cost. The alliances mobilized and coordi-nated a vast array of resources, expertise, and infrastructure to achieve missionimpact far beyond what was possible by HFH Egypt acting alone.

CASE STUDIES

The case studies that follow expose the reader to a wide range of innovativealliances in action. The first case, Guide Dogs for the Blind Association(GDBA), profiles the newly appointed CEO and social entrepreneur GeraldinePeacock as she seeks to deliver on her organization’s mission to improve thelives for the visually impaired by relentlessly striving for collaboration andalliance building within and across sector boundaries. This approach enablesher to better serve her organization’s mission by leveraging resources fromoutside GDBA. The GDBA case demonstrates the opportunity for generating


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enhanced social impact through the creation of new forms of social enterprisealliances, while at the same time illustrating the accompanying leadership andmanagement challenges that must be overcome. As you read the case, thinkabout the following questions.

1. What is your assessment of the hotel and holiday partnerships?

2. What are the critical elements of the Guide Dogs Mobility Service(GDMS) partnership? What is your assessment of this partnership?

3. What role should GDBA play in the visually impaired sector’s umbrellaorganization?

4. What do you think of Geraldine Peacock’s leadership? Why?

KaBOOM! is a nonprofit organization that builds and rehabilitates commu-nity playgrounds. The organization relies mostly on crafting corporate alliancesto support and finance the construction of community playgrounds. The orga-nization has undergone a period of rapid expansion through building a networkof corporate partners. This case also serves to illustrate another dimension ofthe blending of social and commercial approaches and the mutual social andcommercial value creation that can be realized through social enterprise collab-orations. As you read the case, consider the following questions:

1. What is your evaluation of KaBOOM!’s use of corporate partnerships?

2. What are some of the benefits and risks that KaBOOM! and its partnersget from working in partnership?

3. What should KaBOOM! do to deal with the increased competition?

4. In formulating its future strategy, how much weight should KaBOOM!give to the impact of this change on its corporate partners?

5. Based on the case, what are some key lessons on how and why partner-ing relationships evolve?

NOTES

1. The Independent Sector. (2001). The nonprofit almanac. New York: Jossey-Bass.

2. Talcott, S. Nonprofit mergers catch on in region. The Boston Globe, April 6,2006. Retrieved April 6, 2006, from Factiva, http://www.factiva.com.

3. The Independent Sector. (2001). The nonprofit almanac. New York: Jossey-Bass.


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4. Kohm, A., & La Piana, D. (2003). Strategic restructuring for nonprofit orga-nizations: Mergers, integrations, and alliances. Westport, CT: Praeger.

5. Ibid.6. Ostrower, F. (2004, September). Attitudes and practices concerning effec-

tive philanthropy. Retrieved April 6, 2006, from the Urban Institute Web site:http://www.urban.org/UploadedPDF/310986_attitudes_practices_ES.pdf.

7. Ostrower, F. (2005, Spring). The reality underneath the buzz of partnerships:The potentials and pitfalls of partnering. Retrieved April 6, 2006, from the StanfordSocial Innovation Review Web Site: http://www.ssireview.org/pdf/2005SP_feature_ostrower.pdf.

8. Banerji, R., Chavan, M., Vaish, P., & Varadhachary, A. (2001). A point oflight in Mumbai [Electronic version]. McKinsey Quarterly, Number 1.

9. Austin, J. E. (2003, Summer). Strategic alliances: Managing the collaborationportfolio. Stanford Social Innovation Review. 1(2).


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204

Geraldine Peacock, chief executiveofficer of Guide Dogs for the Blind

Association (GDBA), the recognized worldleader in the breeding and training of guidedogs, reviewed her organization’s missionstatement: “Our mission is to provide guidedogs, mobility, and other rehabilitation ser-vices that meet the needs of blind and par-tially sighted people.” GDBA had madesubstantial progress during her five years asCEO. The organization’s reach had beenconsiderably broadened, and costly lossesfrom noncore activities had been containedor eliminated. Nevertheless, Peacock wasconcerned that systemic problems, includ-ing competition among organizationsserving the visually impaired, programredundancy, and lack of optimum resourceutilization in the sector, still prevented

services from being delivered to manyvisually impaired people who needed suchservices. How these challenges could beaddressed and what role GDBA andPeacock should play were not clear.

Peacock reflected on her past leadershipexperiences in the nonprofit sector andsaw the potential to develop a broad, var-ied network of organizations that wouldcooperate in serving visually impairedpeople and leverage resources beyond tra-ditional organizational boundaries. Pea-cock picked up the phone and called akindred spirit, Stephen Remington, chiefexecutive officer of Action for BlindPeople, who shared her concerns aboutthe lack of cooperation in the sector, todiscuss the idea of broad-based, pragmaticcollaboration.

Case Study 5.1Guide Dogs for the Blind Association

Allen Grossman

Jane Wei-Skillern

Kristin Lieb

AUTHORS’ NOTE: Copyright © Harvard Business School Publishing, case number 9-303-006.Used with permission.

Case

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Peacock was aware that proposing thatservice providers work together was consid-ered out-of- the-box thinking and wasdifficult in this insular sector of the non-profit world and at GDBA itself. However,there had been a number of promising inno-vations in the sector over the past five yearsto support the possibility that this newapproach might have merit. Despite this,convincing trustees, competitors, employ-ees, and clients of the worth of a strategy tocollaborate with organizations deliveringmany of the same services as GDBA wouldbe a long, complicated process.

GDBA BACKGROUND

Guide Dogs for the Blind, a nonprofit orga-nization in the United Kingdom (see Exhibit5.1.1 for cross-national comparisons of thenonprofit sector) with an annual budget ofover £40 million1 (see Exhibit 5.1.2 forGDBA financials), had provided guide dogsto visually impaired people since its found-ing in 1931. Each year, GDBA bred andplaced over 1,000 guide dog puppies andcreated over 800 new guide dog partner-ships. As of 2002, GDBA had enabled over21,000 people to experience greater mobil-ity via guide dog assistance. A guide dogwas given at no cost to any visuallyimpaired person in the country who neededone. Each guide dog cost the organization£35,000 (breeding, feeding, veterinary care,etc.) over the animal’s lifetime. The averagedog could perform its duties for seven years.Upon retirement, a guide dog’s owner, theowner’s relative, or an individual on a wait-ing list would adopt the dog.

For many years, GDBA had been ahighly successful organization by mostmeasures. That changed during the earlyand mid-1990s with the introduction ofincreasingly noncore, complex, and variedservice offerings, such as holiday and hotelprograms for the visually impaired. By1997, the organization was experiencingserious financial problems. In response tothese difficulties, the trustees recruitedPeacock, a seasoned nonprofit manager, tojoin the organization and change the wayGDBA conducted its business. The board-mandated instructions were clear: “Focusthe organization without shutting downservices, stop the organization from bleed-ing at the jugular, maintain the quality andoutput of the core guide dog service, andwork in partnership wherever possible.”

Prior to joining GDBA, Peacock hadbeen the first paid CEO of the U.K.National Autistic Society, where she hadserved from 1988–1997. Before that, shewas deputy director of the LondonBoroughs Training Committee. At the timeshe was hired, she was serving as a trusteeof the National Council of VoluntaryOrganizations, a member of the Council ofthe Industrial Society, and a member (andpast chairman) of the executive committeeof the Association of Chief Executives ofVoluntary Organizations (ACEVO). Shealso served on the U.K. government’sTreasury Task Force on Social Investmentand the strategy unit’s Review of CharitableLaw and Regulation. In these capacities,and as part of her lobbying efforts for theinterests of the fast-growing voluntary sec-tor, Peacock met with politicians andmembers of key government departments.

205Case Study 5.1: Guide Dogs for the Blind Association

Case Study

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Nonprofit Revenues (with and without volunteer input),1995 (millions US$)

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50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

750,000

Hun

gary

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herla

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675,

973

566,

960

292.

935

264,

366

94,4

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887

100,

196

78,2

20

99,2

34

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70,6

91

56,2

91

32,8

33

25,7

78

1,59

8

1,43

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Japa

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Total Revenue Total Revenue & Volunteer Input

0.040.48 0.64

0.961.33 1.42

2.16

8.55

0.000.501.00

1.502.002.503.00

3.504.004.505.005.50

6.006.507.007.50

8.008.509.00

Hun

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Japa

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Exhibit 5.1.1 (Continued)

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Nonprofit Share of Total Nonagricultural FTE Employment

1.33%

3.54%

4.52% 4.55%4.90%

6.20%

7.83%

12.40%

0.5%

1.5%

2.5%

3.5%

4.5%

5.5%

6.5%

7.5%

8.5%

9.5%

10.5%

11.5%

12.5%

Hun

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Within GDBA, Peacock faced daily chal-lenges associated with working for anextremely cautious board (see Exhibit 5.1.3for GDBA Board of Trustees) in an organiza-tion that had undergone little organizationalchange for decades and where 70% of theemployees had worked their entire workinglives. Peacock knew she had to disturb “thetemple of the dog” in order to truly serveguide dog owners, who increasingly werewanting more than “the perfect guide dog.”“We needed to go from ‘we do dogs, nowwho wants one?’ to thinking more broadlyabout how to best serve the mobility needs ofour clients,” Peacock said. This reorientationwas achieved through a wide and inclusive

consultation process with all of the organiza-tion’s stakeholders. While Peacock reorga-nized the structure and invested in staffempowerment changes to realign GDBAinternally, she sought to build alliances out-side the organization that would help herenhance GDBA’s impact.

At the time of Peacock’s arrival, GDBAhad annual revenues of £37 million and4,610 clients, or guide dog owners.GDBA received 85% of its revenues fromdirect bequests and investment returnson its endowment. The remaining 15% ofannual revenue came from branch fund-raising, corporate sponsorships, andother donations. GDBA received no

Exhibit 5.1.1 Cross-National Comparisons of the Nonprofit Sector, 1995

SOURCE: Salamon, L., & Anheier, H. The Emerging Sector Revisited: A Summary. Baltimore, MD:Johns Hopkins University Institute for Policy Studies, 1998.

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2001 (£000) 2000 (£000)

Fixed assetsTangible assets 23,729 23,702Investments 129,960 167,326

153,689 190,398

Current assetsStocks 477 452Debtors 7,094 7,875Money market deposits 3,107 1,543Cash at bank and in hand 1,497 726

12,175 10,596

Creditors: Amounts falling due within one yearTaxation and social security 256 517Due to subsidiary companies — 170Other creditors 9,409 9,640Accruals 52 56

9,717 9,383

Net current assets 2,458 1,213

Total assets less current liabilities 156,147 191,611

Funds:

General funds—Guide Dog Services 82,110 110,842

Designated fundsFixed assets 23,729 23,072Guide Dogs Mobility Service development 28,319 31,323New initiatives 18,865 19,736Ophthalmic research 3,124 3,706Hotels and holidays — 2,932

74,037 80,769

Total unrestricted fundsIncluding a revaluation deficit of £8,044,000 in 2001and revaluation reserves of £9,883,000 in 2000 156,147 191,611

Restricted funds — —

Total funds 156,147 191,611

Exhibit 5.1.2 Balance Sheet, December 31, 2001

SOURCE: GDBA documents.

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Case Study

General Designated Restricted TOTAL As RestatedFunds Funds Funds 2001 Total 2000(£000) (£000) (£000) (£000) (£000)

Incoming resources

Voluntary 32,179 — 2,921 35,100 31,853Activities in furtherance of the

charity’s objects:Continuing operations 442 243 — 685 752Discontinued operations—Leisure — 353 — 353 536

services

Investment Income 4,434 — — 4,434 5,334Total incoming resources 37,055 596 2,921 40,572 38,475Resources expendedCost of generating funds:Fund-raising and legacy marketing 5,866 158 — 6,024 5,272Development of new fund-raising 1,823 — — 1,623 1,342

initiativesPublicity 1,181 581 — 1,762 1,075Investment management fees 386 — — 366 290

9,256 739 — 9,995 7,979

Net incoming resources available 27,799 (143) 2,921 30,577 30,496for charitable applicationCharitable expenditure:Costs of activities in furtherance of

the charity’s objectsProvision of guide dogs 29,600 1,368 1,313 32,281 32,108Provision of visual-impairment 3,698 965 1,608 6,259 5,164

support servicesTraining of visual-impairment 1,817 146 — 1,963 2,069

support workersNew initiatives — 749 — 749 135Leisure services–Discontinued operations — 3,894 — 3,894 1,883

Support costs included above:2001 £5,521,000(2000 £4,912,000)Grants payable in furtherance of 274 704 — 976 1,549

the charity’s objectsManagement and administration 239 29 — 288 212

of the charity


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funding from the central or local govern-ments to fund its guide dog service.GDBA had 1,240 employees and 27offices throughout the United Kingdom,which were broken into seven regions,each with its own manager, who reportedto two central client service managers.Peacock remembered:

The seven regions were like fiefdoms,and I had to try to remove barriers,

both physically and mentally, and cre-ate a truly national organization. Thismeant changing the culture from oneof command and control to one ofempowerment and creating new,cross-functional divisions and teamswho worked together, supported eachother, shared knowledge, and wereaccountable at the local level. We hadto draw things into the center initially,invest in developing good staff and


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General Designated Restricted TOTAL As RestatedFunds Funds Funds 2001 Total 2000(£000) (£000) (£000) (£000) (£000)

Total charitable expenditure 35,616 7,855 2,921 46,392 43,120Total resources expended 44,872 8,594 2,921 56,387 51,099Net resources expended before

transfersContinuing operations (7,817) (4,457) — (12,274) (11,277)Discontinued operations—Leisure — (3,541) — (3,541) (1,347)

servicesTransfer between funds (1,266) 1,266 — — —

Net resources expended (9,083) (6,732) — (15,815) (12,624)Net realized losses on (7,874) — — (7,874) (4,459)

investments

Net expenditure for the financial year (16,957) (6,732) — (23,689) (17,063)

Net unrealized losses on investments (11,775) — — (11,775) (4,909)

Net decrease in funds (28,732) (6,732) — (35,464) (21,992)Fund balances brought forward 110,842 80,769 — 191,611 213,603

at January 1

Fund balances carried forward 82,110 74,037 — 156,147 191,611at December 31

Exhibit 5.1.2 Cash Flow Statement for the Year Ended December 31, 2001 (incorporating anincome and expenditure account).


NOTE: The net expenditure for the financial year under the historical cost accounting convention is £25,845,000(2000, £19,108,000).

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211

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1993

1994

1995

1996

1997

1998

1999

2000

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2002

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7,78

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5,38

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6,17

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7,64

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17,4

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Geraldine Bounds Date joined board: 1998Bounds is Chair of the Board of Trustees of Liverpool Voluntary Society for the Blind. Geraldine hasbeen a guide dog owner since 1956.

Tony Chignell Date joined board: 1989Chignell was Deputy Chairman for 2000 to 2002 Emeritus Consultant in Ophthalmology, teachingand advising in ophthalmology.

Sir Nick Fenn Date joined board: 2002Fenn spent 37 years in the diplomatic service as ambassador in Burma and Ireland and HighCommissioner in India. He is blind for the early part of each day.

Bruce Gordon (Honorary Treasurer) Date joined board: 1997Bruce Gordon joined the board in 1997. Gordon is a chartered accountant and has been a partner for 10years. He leads the Thames Valley practice of Deloitte & Touche in Reading and works with a number oflarge public companies and the U.K. operations of some of the worldwide firm’s largest clients.

Nic Harper Date joined board: 1989Harper is a Fellow of the Royal Institution of Chartered Surveyors and the Central Association ofAgricultural Valuers, and a member of the Lord Chancellor’s panel of agricultural arbitrators. Since 1971he has been with the London firm of Langley-Taylor and is currently Managing Partner of the practice.

Neal King (Deputy Chairman) Date joined board: 1996King has been a member of the British Veterinary Association Council since 1972 and of the RoyalCollege of Veterinary Surgeons (RCVS) Council since 1988.

Richard Lane Date joined board: 2001Lane is currently working as Press and PR Manager for the Lancet medical journal. Richard becameregistered blind in 1992 and trained with his first guide dog in 1993.

Ken McFarlane Date joined board: 2002McFarlane, a chartered accountant, is a partner at Deloitte & Touche, in charge of the corporate taxpractice for the firm.

Elaine Noad Date joined board: 1998Noad has worked in local government in Scotland since 1980 and is now Director of Social WorkHousing and Health with South Ayrshire Council where she has worked since 1995. Elaine has beena guide dog owner since 1980.

Jean-Clare Schaw Miller Date joined board: 1992Schaw Miller was, until 1992, Scottish Chief Commissioner of the Girl Guides Association, anorganization with which she has been involved since 1963. She is presently Chairman of the GuideAssociation (U.K.) Awards Committee.

Barry Weatherill (Chairman) Date joined board: 1975Weatherill has been Chairman since 2000. Weatherill was Senior Partner of Wedlake Bell Solicitorsfrom 1984 to 1994 and until 2001 was head of his firm’s Media and Intellectual Property team. Hecontinues to practice as a corporate and IP lawyer.

Igal Yawetz Date joined board: 1997Yawetz is a chartered architect and planner by profession. He has been responsible for many majorarchitectural projects including reconstruction of The Grand Hotel in Brighton, Metropole Hotels inLondon and Birmingham NEC, and conversion of the former KGB Headquarters in St. Petersburg toan International Business Center.

Exhibit 5.1.3 GDBA Board of Trustees


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information systems, and then let gowith trust. I decentralized the struc-ture down to 32 linked district teamsthat delivered services locally to theservice users in the most flexible,appropriate manner possible.

When Peacock arrived at GDBA, theorganization only had several unnetworkedcomputers in its head office. A networkprovider was contracted to place a com-puter with Internet access in all locationsacross the United Kingdom to foster bettercommunication and collaboration amongstaff members in different offices and func-tions. The network included a logisticssystem, to better match people with dogs,and computerized veterinary records andgenetic profiles, to better monitor doghealth. For example, in the past, GDBAwould not have known that an ideal dogfor a person in England might be availablein Scotland. With a new technology infra-structure in place, employees were able tomake this type of match easily. In addition,the new technology enabled users to accessvideo briefings, leadership developmentprograms, and learning networks.

PATH TO PARTNERSHIP

Outsourcing Hotel Management

In 1990, GDBA’s investments had per-formed so well that management was look-ing to broaden the range of services offeredby the organization. Members of GDBApolled guide dog owners about what kinds ofnew services would be most valued. Guide

dog owners said they wanted access to spe-cial hotels that would accommodate theirneeds. A staff member remembered: “Someguide dog owners did not like going to main-stream hotels because they didn’t feel thatthey were properly cared for or attended to.They wanted to go to a hotel that was theirhotel, where they were known, where theyfelt comfortable, unthreatened, et cetera.Guide Dogs had money to spare, so theystarted a new program.”

GDBA bought two hotels in excellentlocations. Cliffden (21 rooms) was asmall converted retirement home locatedin Devon, an area by the sea in the south-ern part of the country. The other hotel,Windemere Manor (18 rooms), was northof London in the more mountainous heartof the Lake District. Under GDBA man-agement, each of the hotels was run inde-pendently and therefore did not benefitfrom any overhead sharing or othereconomies of scale. Although one of thefirst things that Peacock did was mergethe appropriate functions of the hotels,they were still too small to ever becomeprofitable. This was true even if bothhotels were booked to capacity everynight. In 1997, the hotels were losing£1.4 million annually.

There were four nonprofit organiza-tions running hotels for visually impairedpeople in the United Kingdom—Actionfor Blind People (AFBP), GDBA, RoyalNational Institute for the Blind (RNIB),and Henshaw’s. GDBA proposed a three-way partnership among itself, AFBP, andRNIB. AFBP agreed, but RNIB would notcommit to the deal in the time frameGDBA and AFBP proposed. Henshaw’shad only one hotel, in North Wales, but it


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wished to retain its hotel as part of itsrange of local services.

AFBP, also with two properties, washaving similar difficulties with GDBA.However, while Peacock wanted to grace-fully bow out of the hotel business withoutalienating constituents, Remington, CEOof AFBP, wanted to scale the hotel businessto the point of profitability, as leisure waspart of its core business. Both executivesbelieved that they would get further by col-laborating rather than competing, so in2000, they structured a mutually beneficialdeal. Peacock noted:

Managerially, we could see that thepartnership made sense. It rational-ized two businesses that were strug-gling and made one business that wasprofitable. Action for Blind Peoplecompeted with us, but, in fact, thecompetition wasn’t very intensebecause we still had more demand forbeds than supply. The costing and themanagement structure were the realproblems. Our hotels were running ata large deficit. So, we tried to think ofhow we could structure a partnershipwith another organization in theprivate or the voluntary sector thatwould keep the hotels open but makethem cost-effective. People in the non-profit sector had done wholeheartedmergers before, but people hadn’tdone strategic partnerships that leftboth companies alive and separate.We knew there was a good fit withAFBP because the provision of leisurefacilities for visually impaired peoplewas part of its core purpose.

AFBP managers would have to demon-strate to GDBA in a comprehensive businessplan that running four hotels as a groupwas a sustainable business model. AFBP hadexperienced hotel management and wasactively fund-raising to rebuild its BognorRegis hotel. GDBA would invest in that pro-ject to accelerate its completion, as well aspay to expand its Cliffden hotel to providemore beds to enhance the hotel’s financialviability. (When the hotel reopened, GDBAstaff would be given first option on applyingfor new jobs.) GDBA would charge a “pep-percorn”2 rent to AFBP for the Cliffdenand Windemere Manor properties to avoidgiving up the title of its assets to the partner-ship. Also, by retaining ownership, GDBAwould continue to influence the quality ofservices provided at the hotels. Ultimately,GDBA gave AFBP a 40-year lease forapproximately £1 per year. GDBA wouldnot receive any annual revenue, either fromrent or potential profits; likewise, GDBAwould not be responsible for any losses.

Outside authorities monitored qualitystandards at the hotels in areas such as cus-tomer care and dog care and issued qualityratings to the hotels. If the hotels receivedbelow a 70% rating, AFBP would have toagree to a plan of action with GDBA abouthow to improve. If improvements were notmade within a specified time frame, GDBAcould give AFBP a year’s notice and thenwithdraw the lease and replace AFBP withanother provider.

But Peacock was sure it would nevercome to that:

Two of the hotels were completelyoverhauled, upgraded, and expanded,


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so they now have much better facili-ties and are much more modern. Weinvested about £6 million in rebuild-ing and eliminating redundancy coststo make the project viable. The think-ing of the trustees was that this was aone-off cost to the organization thatwould avoid a potential worst-casedrain of nearly £2 million a year.When we handed the hotels over in2000, the actual annual loss on thehotels had been reduced to £671,000.

When the deal was formalized, a smallbut vocal minority of guide dog ownersbegan to register their discontent over thepartnership. Some guide dog owners whowere visitors at GDBA’s hotels organizeda sit-in in the bar of one of the hotels andcalled in the media to cover the event.Peacock herself received hate mail fromangry guide dog owners. The controversywent on for some time, but GDBA and itspartner forged ahead with the implementa-tion of the partnership. Peacock explained:“There were a few difficult dog ownerswho didn’t want to share their hotels withpeople who used canes. Most of all, theyfelt that they would be safe in hotels onlyif GDBA ran them. I knew this wouldn’t bethe case, but it required a leap of faith forthe protesters.”

Shortly after the new arrangement wasput in place, gains in the hotels’ quality ofservice as well as operational and financialperformance were quickly realized. Mostof the protesting guide dog owners wererapidly swayed by these outcomes. Some ofthe former objectors even wrote letters toGDBA, praising the move and questioning

why these changes had not been imple-mented sooner.

An additional outgrowth of the hotelpartnership program was the beginning ofa dialogue with the Automobile Association(AA), the grading authority for mainstreamhotels. After several discussions, GDBA,AFBP, and AA began to contemplate waysin which they might develop a standard forrating other hotels’ accessibility for visuallyimpaired guests. Peacock said:

Since The Disability DiscriminationAct has been passed in this country,all sorts of businesses have to look athow they make their premises accessi-ble to people with different kinds ofdisabilities. We are going to do somemarket testing to see whether hotelswould pay to be inspected as user-friendly to visually impaired peopleand guide dog owners. If they would,in addition to getting rosettes for thequality of hotel service, they wouldalso get marks for their user-friendli-ness for guide dog owners.

By 2001, the hotels had ceased losingmoney. By 2002, only two years after thedeal was completed, the four-hotel chainwas turning a small profit. It was plannedthat profits would be reinvested into thedevelopment of the business. Remingtoncredited the hotel program with starting awider dialogue among hotel providerstoward people with a range of other dis-abilities. Based on the organization’s strongtrack record, charities were now approach-ing AFBP about running their facilities.


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The Holidays Partnership

GDBA’s Holiday Program, establishedin 1990, formalized what had previouslybeen its informal volunteer holiday club,The Guide Dog Owners Adventure Group.This group participated in and sponsoreda variety of adventures—from tandembicycle riding to rambling, a structured butleisurely walking that is less strenuous thanhiking. As the program evolved, GDBAprovided even more adventurous trips bysupplying sighted guides and developingcomprehensive safety protocols. Guide dogowners paid membership fees and travelcosts, while sighted people paid to travelon the adventure holidays as guides. Overthe years, the range of travel options avail-able grew, and GDBA became a substantialtravel agency in its own right, packagingflights, organizing ground transportation,and arranging hotel bookings.

By 1997, the year Peacock joined theorganization, GDBA was running 140 groupholidays per year. The holiday offeringswere very broad. People could opt foradventure trips including skiing, hiking nearEverest, and rafting the Limpopo River.Guide dog owners and other visuallyimpaired people loved the service, butGDBA was losing £761,000 per year pro-viding it. Peacock sought to find a partnerwith expertise in the travel industry in orderto stem the losses from GDBA’s holidayoperations. Peacock recalled the process ofcanvassing for appropriate partners: “Wedidn’t really compete with anyone in adven-ture trips for the visually impaired becausewe had a unique service offering in that wewere the only organization providing sightedguides. AFBP and RNIB did a little, but

nobody was doing what we were doing. Itwas quite an ambitious business, actually.”

Peacock had discussions with severalpotential partners, but ultimately the bestof a limited number of offers came froma nonprofit organization, The WingedFellowship (TWF). While TWF was nota charity serving the visually impaired perse, its core business was providing holidaysfor people with a range of disabilities. Onemajor challenge was that TWF had fewreserves in the bank.

Peacock remembered:

TWF was a very small organizationand going through quite a difficulttime. They had just hired a new CEO,and he was looking at ways of secur-ing their “market share.” By taking onour holiday business, they could actu-ally merge our respective infrastruc-tures and be in a position to growtheir business considerably.

It wasn’t as easy or obvious as thehotel move. But TWF was clearly themost expert of the few companies weconsidered, so they were our choice.Also, I think, the trustees wanted thisongoing liability off our books. Wefound a pragmatic solution. Becausewe were partnering with anothercharity, which shared common valuesand had secured its positioning in thedisability holiday market, the arrange-ment felt safe to visually impairedpeople, our core constituency.

TWF chief executive Pat Wallace agreed,and the two boards of trustees signed thedeal in 2001. Wallace transferred the bulk


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of TWF’s holiday office to the GDBA oper-ation and hired GDBA’s manager of hotelsand holidays as the director of operations.Peacock and GDBA trustees felt there wasa benefit to maintaining the Guide DogHolidays brand, which was more estab-lished than the TWF brand, for a three- tofive-year transition period. The outcomewas that TWF’s business was in effect inte-grated into that of GDBA’s, and the newbusiness was a considerably larger entity.

GDBA also provided financial support.“In essence, we gave them a front-loadeddowry for the first few years, because wewanted to support them while they devel-oped their infrastructure and fund-raisingcapabilities,” Peacock said. “We felt it wasworth investing in making them securebecause although the deal had no revenue-generating value, it stopped us from losing£761,000 the first year.” By 2001, GDBAhad created an annual subsidy schedulewhereby it would pay out £2.9 million overfive years. In 2001, GDBA gave TWF£565,000 and a £250,000 loan (to renewIT infrastructure). By 2002, when TWFoffered 100 trips, the annual subsidy fromGDBA had dropped to £484,000, and noloans were made.

GUIDE DOG MOBILITYSERVICE (GDMS) PROGRAMWITH LOCAL AUTHORITIES

Local Authorities inthe United Kingdom

There were approximately 500 localauthorities (local governments) in Englandand Wales, though Wales accounted for

just 22 of the total. Because of its high pop-ulation density, there were 33 local author-ities in the city of London alone. Surrey, alarge local authority that had a populationof just over 1 million people, had a budgetof £770 million a year. In contrast, thesmaller Allerdale local authority had apopulation of 96,000 and a budget of £9.5million per year. Local authorities raisedmoney through local household propertyand business taxes. The taxes were set tomeet the local budget in the area, and thenational government approved the localgovernment’s budget. Local authoritieswere then responsible for providing arange of services, including education, fire,economic development, social services, andservices for the visually impaired.

The central government provided finan-cial support for all local authorities withcash payments intended to “top off” locallyraised taxes. The emergency, primary, andsecondary healthcare was provided andfunded by the National Health Serviceand was not included in local authoritybudgets. Central government funding wasalso available for specific initiatives, such asenvironmental projects or road projects,that fit the political priorities of the govern-ment in power.

Changing the Courseof Service Delivery

In most cases, a visually impaired personwould receive a diagnosis to determine hercondition, and if services were needed, shewould go to the local hospital for treatment.She would then be advised to contact thesocial services department of the local


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authority in which she resided. The localauthority would then assess the visuallyimpaired person’s condition, decide whichservices were needed, and build a care plan.The local authority would then most oftenissue contracts to nonprofit service providersfor the required services or, much less fre-quently, provide the services itself. Servicesfor the visually impaired fell into threecategories: mobility services (guide dogs,long-cane training, orientation devices),communications skills (languages such asBraille and Moon), and independent livingskills (learning to cook, clean, and shop).

Peacock said this process worked betterin theory than in reality and explained why:

Because local authorities have limitedbudgets, which are capped by the cen-tral government, they have to priori-tize what’s most important, whichoften means long waiting lists for thevisually impaired. They typically don’thave enough money to provide every-thing they’re supposed to statutorily.So the local authorities tend to con-centrate on crisis intervention likechild protection. And visual impair-ment is often low down in the peckingorder. A person might wait ages for anassessment of need. Once he finallygets his assessment, the local authoritymight not have, or be able to afford,the right services to meet that need.

GDBA had actually been one of theorganizations receiving contracts to providemobility services, and much less frequentlycommunication and independent livingskills, for a number of local authorities. In

addition, GDBA independently providedmobility services directly to visually impairedindividuals who were entitled to receivethem from local authorities but in fact hadnot been receiving them for some reason.The various GDBA locations had no coher-ent strategy for pricing the mobility servicesprovided to the local authorities, and pricesvaried considerably from office to office.Historically, it was speculated within GDBAthat the real reason for providing mobilityservices in the first place was to increase thenumber of guide dog placements. Conse-quently, the true costs of the service andthe management required to effectivelydeliver the service did not garner significantorganizational attention prior to Peacock’sarrival. Other charitable organizationsaround the country, many of which com-peted with GDBA for service contracts,came to resent GDBA for its ad hocapproach to pricing, which was often belowthe actual cost of providing the services.

Peacock knew that the current systemwas not efficiently or effectively serving theneeds of the United Kingdom’s visuallyimpaired population. In her view, the primeconsideration for GDBA should be toensure that mobility services were providedto as many people as possible, regardless ofwhich organization ultimately provided theservices. Peacock summed up her strategyfor accomplishing this (see Exhibit 5.1.4 forGDMS overview):

By surveying visually impaired peoplein the United Kingdom, we learnedthat a lot of people were not gettingeither assessments or services fromlocal authorities in their area. We


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Case Study

Focusing the Vision

In 1997, The Guide Dogs for the Blind Association carried out the charity’s most extensive review toestablish what services blind and partially sighted people need to become more independent.

Its findings were startling, revealing that 25% of visually impaired adults never leave home aloneand 88% of visually impaired adults have never received mobility training.

Putting our extensive expertise and resources to use in totally new ways, we have established theGuide Dogs Mobility Service to help thousands more blind and partially sighted people in the UnitedKingdom get the most out of life in the 21st century.

The Guide Dogs Mobility Service—Your Essential Questions Answered

What Is the GDMS?

The GDMS is a new service with a single point of access to maximize the mobility of blind andpartially sighted people, helping them to make the most of their remaining vision.

There are currently 200,000 blind and partially sighted people in the United Kingdom who couldbenefit from this service. While it would be impossible and inappropriate to provide them all withguide dogs, we can help them in many other ways.

An older person whose sight has deteriorated with age may want advice on low-tech aids like along cane, while a young professional may be interested in the latest mobile phone technology thatcan help blind people. Our aim is to help them both. The service is designed to respond to people’sneeds making sure they have access to the best possible support and services.

How Will It Work?

The GDMS will establish an easily accessible, “single point of entry” for people in their localcommunities where they will be assessed to find out which services they would most benefit from.

It will be delivered locally, in partnership with local authorities, free to the individual user. As partof their commitment, local authorities will have to safeguard the money they currently allocate tovisual impairment services for the duration of the partnership.

By working with other providers like the Royal National Institute for the Blind and localassociations for the blind, we can coordinate these services under one umbrella, avoid duplication,and ensure that we focus our work where unmet need is greatest.

Where Will the Money Come From?

The new service is being set up with funds from designated reserves, although once up and running,it will be paid for entirely by voluntary income.

When Will It Happen?

Pilot projects are already established across the United Kingdom, and these are being reviewedannually. It will take between three and five years to assess demand for the service and to plan thetraining and development needs of mobility/rehabilitation workers.

How Will Guide Dogs Change to Deliver This Service?

To be effective, we have to bring our services closer to blind and partially sighted people in their owncommunities. We are restructuring our offices so we can provide mobility training from an extendednumber of small service bases across the United Kingdom.

Exhibit 5.1.4 GDMS Overview

SOURCE: GDBA Annual Report, 1999.

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thought about how we might do abetter job for the visually impaired inthe face of competing interests at thelocal authority level.

Our proposition to the localauthorities was, GDBA is a vision-impairment organization whose clientsare telling us that they’re not gettingthe services they need, or that they aregetting good services from you butyou’re strapped for cash and can’t doas much as you would like. Wouldyou like to try a new partnershipwhere together we could extend ourcollective reach?

We proposed that GDBA woulddeliver and fund the mobility compo-nent of a local authority’s portfolio ofservices. In return, the local authoritywould contractually agree to reallocatethe money it would save by not pro-viding mobility services to the visuallyimpaired to communications and inde-pendent living skills for the same pop-ulation. The combined effect would bethat the local authorities, by workingwith us, could improve and expandtheir overall services to the visuallyimpaired without having to find moremoney in a cash-strapped environment.

The idea was that GDBA, working witha local authority, would establish a mobil-ity budget that the authority would agreeto assume for the upcoming year. Througha negotiated process, GDBA and the localauthority would write a contract sayingthat GDBA would provide, or pay for,mobility services for X number of people ata cost of Y during the forthcoming year. In

return, the local authority agreed to use themoney saved by GDBA’s assumption of thecost and delivery of mobility services toprovide people on the waiting lists withother vision-impairment services. Under theterms of the contract, GDBA had the rightto audit the local authorities to ensure thatthey lived up to their end of the bargain.

From Peacock’s perspective, GDBA hadbeen providing below-cost services to thelocal authorities all along, so the impact ofthis program to the organization was inessence not that different from an overallcost perspective. Additionally, by removingthe mobility service component from theirresponsibilities, the local authorities couldprovide better-quality and broader commu-nication and living services to the visuallyimpaired through other visual-impairmentnonprofit organizations that specializedin these particular services. This servedPeacock’s other agenda within GDMS, tobuild the capacity of voluntary sector orga-nizations serving the visually impaired pop-ulation of the country.

GDBA deal makers began approachinglocal authorities with the proposal butlearned quickly that each local authorityoperated differently and that the negotia-tions for contracts would be more difficultthan first assumed. Due to haphazard recordkeeping and variations in how local author-ities conducted their affairs, the developmentof mobility budgets was time-consumingand far from uniform. For example, somelocal authorities used the number of pastrequests for service as the basis for develop-ing a budget, while others used the numberof people on a waiting list for service as abasis for establishing a budget.


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Local authorities were not used to beingapproached in such a proactive fashion bya voluntary organization, and many werewary of an offer that seemed so unorthodox.Additionally, GDBA was still perceived bymany in the sector as a provider of a simpleservice—guide dogs. Recognizing the organi-zation as a significant provider of a broaderrange of mobility services and as a partner tothe local authorities was a challenge.

Funding the GDMS Program

GDBA met with an unexpected economicobstacle, caused in large part by September11 and the subsequent stock market crash.Peacock estimated that GDBA lost £27 mil-lion from its investment portfolio and £3million more in lost fund-raising opportuni-ties due to an outbreak of “foot and mouth”disease in the country. As a result, the £35-million budget the GDBA trustees had allo-cated for the rollout of the GDMS project in1999 was under strain. This considerablyslowed the national rollout of the GDMSpartnership program. However, the pilotprogram, which involved 12 test sites,remained untouched, and even with a dras-tically reduced budget, working with theinterest on the £35 million, GDMS was ontrack to sign an additional 43 partnershipsby the end of 2002. Peacock noted: “Withthe initial £35-million budget, we weregoing to fundamentally change the deliveryof services for visually impaired people in theUnited Kingdom. This was going to beGuide Dogs’ gift to the nation. In threeyears, we could have rolled it out to everylocal authority in the country.”

GDBA spent about £600,000 on theGDMS program in 2001, and it anticipatedspending £1.3 million in 2002. GDMS waswritten into the GDBA core budget for2003 at a guaranteed £2 million per yearfor the next three years.

Wider Implications forthe GDMS Program

Peacock called the GDMS program the“most creative thing” she had done to dateand wanted to explore further uses forher model. She wanted local authorities tothink more creatively about the connec-tions among the government, the voluntarysector, and the private sector. Peacockreflected on the implications of GDMS:

This could have a real impact in ashort time frame. If we can develop amodel of how service provision canbe enhanced through new, cross-sec-tor alliances that more effectively useprivate, public, and voluntary sectormoney, there’s a win for everyone.It’s really about working smarterand thinking laterally. There arealways two maxims in the back ofmy mind—“less is more,” and“together everyone achieves more[TEAM].”

This also shows how the cultureand reputation of GDBA are chang-ing—we’ve repositioned ourselves tobe taken much more seriously by gov-ernment and other agencies. This, inturn, allows us to fund-raise in newways, because now different aspects of


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our work appeal to different segmentsof the public.

The U.K. Treasury, which was responsi-ble for the national funding frameworkfor welfare services in the United Kingdom,recently had committed £125 million overthe next three years to build infrastructureand capacity for the delivery of public ser-vices by the country’s voluntary sector. TheTreasury had also introduced investmenttax credits to encourage private investment.GDBA’s management hoped that the GDMSprogram helped change people’s mindsabout how the voluntary sector operated.

VISUAL-IMPAIRMENT SECTORIN THE UNITED KINGDOM

GDBA was a “monopoly supplier” ofguide dogs in the United Kingdom, but inthe growing area of other mobility ser-vices, the organization coexisted alongsideorganizations such as the Royal NationalInstitute for the Blind (RNIB), the largestnational charity in the visual-impairmentsector, and numerous large local associa-tions for the blind. These organizations didnot provide guide dogs but did offer arange of other rehabilitation services suchas mobility services (long-cane orienta-tion, electronic aids, etc.), independentliving skills (cooking, cleaning, and shop-ping), and communications skills (lan-guages such as Braille and Moon).

Each of these nonprofit organiza-tions served many of the same clientbases as GDBA and had unique fundingmodels as well as distinct management and

service-delivery approaches. Whatevertheir similarities and differences, all of theorganizations were struggling to becomesustainable. The question beginning to beasked by some in the sector was whetherthere were ways in which like-mindedorganizations might reduce redundancies,leverage their individual core competencies,and work collaboratively to enhance theservices offered to the visual-impairmentcommunity as a whole. There was littleprecedent for nonprofits that competed inthe same pool of funding and served thesame constituencies to work together in ameaningful way.

Visual-ImpairmentUmbrella Organizations

In the mid-1990s, there were two umbrellaorganizations that represented the interestsof the visually impaired population. Onewas the Visual Handicap Group (VHG),which was composed of the “of and for theblind” voluntary organizations. Membersincluded GDBA, RNIB, AFBP, and numer-ous local associations for the blind. Thegoal of this umbrella organization was tofoster collaboration among participants.Peacock described the organization itself asa “talking shop,” where issues were dis-cussed but nothing ever happened. Theother umbrella organization was the UnitedKingdom Council for the Prevention ofVisual Impairment (UKCPVI), whichfocused more on prevention of eye prob-lems and diseases and was composed of theprofessional bodies from the eye care andeye health professions.


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As one member observed: “The twoumbrella groups, VHG and UKCPVI,didn’t have a real dialogue between them.So you had the volunteer organizations[VHG] on one side, and the professionals[UKCPVI] on the other. There was talk ofcollaboration, but no one really seemed tohave the appetite to do it.”

Eventually, the Nuffield Trust was per-suaded by Peacock, Remington, and otherinterested parties to hold a major seminar.As a result of the meeting, the separateumbrella groups decided that they couldaccomplish more together than they couldapart. The groups combined in the late1990s to form Vision 2020 UK.

Vision 2020 UK and the Future

Remington and Peacock were amongthe key drivers in the initiative to estab-lish the emergent umbrella organization,Vision 2020 UK. They both became boardmembers, and Remington served as theboard’s chairman.

Vision 2020 UK was registered as anational organization and was an affiliate ofVision 2020, an international organization.Participants included RNIB, AFBP, the RoyalLondon Society for the Blind (RLSB), and theNational Association of Local Societies forthe Visually Impaired (NALSVI).

Neither Remington nor Peacock sawthe organization as a direct-service provider,but rather as an entity that would haveas its primary purpose the development ofa unified advocacy agenda that wouldbe embraced and promoted by all ofits members. Additionally, the umbrella

organization would ideally facilitate thebuilding of common infrastructures for non-profit organizations that served the visuallyimpaired. The objective was for the umbrellaorganization to achieve tangible benefits forits members by sharing common costs andattaining economies of scale. For example,one outcome could be that organizations inthe sector could share “back-office” supportservices, such as payroll systems and pur-chasing systems. The thinking was that thesenew efficiencies would free up additionalresources in the sector to flow directly toprograms and services for the visuallyimpaired population.

In 2001, working members of theumbrella organization agreed on a busi-ness plan for Vision 2020 UK. (See Exhibit5.1.5 for Vision 2020 UK working partymembers.) Highlights of the plan includedthe following:

Purpose

The purpose of the proposed NationalAgenda for action on visual impair-ment is to provide an agreed set ofnational aims that will enable organi-zations and individuals to determinetheir own future strategies in theknowledge that they are assisting withidentified need. The agenda is intendedto be relevant to visually impairedpeople and to all those working withthem, as eye health professionals, edu-cators, employers, in social services orin voluntary organizations.

A National Agenda will not onlyprovide a framework in which orga-nizations can determine their own


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• Ian Attrill, NALSVI

• Robin Birch, Age Concern (Chairman of the Low Vision Implementation Working Group)

• Ron Bramley, Gift of Thomas Pocklington

• Kathy Cash, NFB

• Gareth Davies, NLBD

• Professor Alistair Fielder, Royal College of Ophthalmologists

• Allen Forster, International Agency for the Prevention of Blindness

• Connell Gebbie, NFB

• Fazilet Hadi, RNIB

• Margaret Hallendorf, Royal College of Ophthalmologists

• Deane Houston, Blind Centre, Northern Ireland

• Robin Hill, Macular Disease Society

• Professor Gordon Johnson, International Centre for Eye Health

• Robert Leader, St. Dunstan’s

• Allan Murray, Scottish National Federation for the Welfare of the Blind

• Geraldine Peacock, GDBA

• Paul Quin, UKCPVI

• John Canavan, Department of Health

• Stephen Remington, Action for Blind People

• Mary Robertson, Association of Directors of Social Services

• Tim Smith, Royal College of General Practitioners

• Vanessa Webb, Wales Council for the Blind

• Dr. Michael Wolffe, College of Optometrists

• Sue Wright, Opsis

• Mike Brace, Development Director

• Margaret Alexander, Secretary

Exhibit 5.1.5 Vision 2020 UK Working Party Members, 2002

SOURCE: Vision 2020 UK documents.

strategies, but also be a powerful toolfor influencing government and forarticulating the key issues to thepublic. Such an Agenda could provide

a framework for detailed objectives ofa U.K. Forum (if one is created) andcould be reviewed and revised by theForum over time.

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Background

A national agenda would provide allthose concerned about visual-impairmentissues with the following:

• A shared set of priorities to which theycan refer in determining their ownstrategies

• New opportunities for partnershipand collaborative projects

• A means of identifying gaps in, orduplication of, provision

• Its not being designed to remove theautonomy of any organization, torestrict its right to act alone or out-side the priorities of the agenda, orto eliminate the benefits of positivecompetition between organizations

The items on a national agenda mustmeet the following criteria:

• Be achievable in the sense thatthere must be the serious prospect ofprogress

• Be nationally relevant• Satisfy identified need• Make sense externally and be

expressed in jargon-free language• Be empowering, not prescriptive,

and allow individual organizationsto pursue their own strategies withinthe greater context of the agenda

• Encourage cooperation betweenorganizations to help with informa-tion exchange, good practice shar-ing, and project partnerships

Agreement on the national agendawould imply the need to map current pro-vision, to assess its quality, and to agreeon priorities for action. This would thenenable statutory, voluntary, and privateorganizations to assess how best to deployavailable resources. (See Exhibit 5.1.6 forthe balance of the Vision 2020 UK pro-posal for a national agenda for action onvisual impairment.)

Although it was intended for Vision2020 UK to remain lean, staffing was nec-essary. A development director, MikeBrace, was hired to move the agenda for-ward. Brace described his progress:

I have established a quarterly newslet-ter directed at both members andother interested parties to let themknow what I and we are doing intheir name. The net result of a year’swork is that member organizationsare now coming to me with ideas thatthey wish me to explore. They wantto know if others share their ideasand are willing to form partnershipsto move forward. I am also initiatingprojects or facilitating interest groupsto get discussions under way or takeproposals forward that members areunwilling to have any other singlemember take the lead on. When con-sulted by government bodies, I haveendeavored to discuss the issues withmembers in advance to gain theirview. Often the members’ views areuniform enough that I can then rep-resent them as the voice of Vision2020 UK.


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Raising Awareness

There is a universal need to improve the understanding among the general public and decision mak-ers of the needs of visually impaired people and of their actual and potential contribution to society.

The distinct needs of, and opportunities for, visually impaired people are often overlooked. Forexample:

• The waiting times for cataract operations are longer than for any other treatment, and yetthis is one of the top ten most cost-effective health interventions.

• Generic social workers are unable to give priority to visually impaired people.• The employment situation is far worse for blind and partially sighted people than for any

other group of disabled people, but policy is being developed generically.• Many other excellent causes have gained a higher profile with the public, and visual impair-

ment has become a lower priority for donors.

Rights and Responsibilities

The rights of visually impaired people must be promoted by common consent and, where necessary,supported by law. These include the right:

• To live free from discrimination• To exercise choice and control over their lives• To receive information in accessible formats• To be able to safely navigate the external environment• To have equal access to education and employment• To enjoy the opportunities and services they need to lead fulfilled lives• To be supported and encouraged to take part in democratic, economic, and community life and

to be empowered to play a full part in determining service priorities and choices affecting them

People who do not have a visual impairment should be encouraged to learn to understand thevaried needs, the achievements, and the potential of those who do.

Visually impaired people have the same rights and responsibilities as everyone else. There is acurrent tendency, however, to treat all people with disabilities as a generic group. This leads to themarginalization of visually impaired people with fewer opportunities and poorer services. This trendmust be corrected.

Improved Prevention, Cure, and Amelioration of Visual Impairment

The ideal must be the eradication of all visual impairment, so we should continue to encourage andfund research, both medical and nonmedical. Until we attain that ideal, we must reduce the personal,social, and economic impact of visual impairment by:

• The vigorous application of current medical knowledge uniformly across the country• Promoting the importance of early diagnosis by regular sight tests and public education• Providing effective support and services to people who are visually impaired• Providing effective low vision services that are consistent across the country• Providing a range of services that ensure that visually impaired people, in all aspects of their

lives and wherever they live, enjoy opportunities equal to those of other members of society


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The eradication of all sight problems is unattainable for now, so we need to ensure the best pos-sible and most timely diagnosis, treatment, amelioration, and support for all visually impairedpeople in all parts of the country. Examples include promoting the benefits of cataract extraction,identifying the most efficient and cost-effective means of improving the consistency and quality ofeye care, and the reduction in waiting lists. We need also to address the needs of groups that areparticularly at risk—elderly people, people with multiple disabilities, and children with other sen-sory impairment.

We must provide services that not only help to compensate physically for loss of sight but thatalso ensure that the disadvantages of visual impairment are relieved through the provision of spe-cially designed and adapted services and facilities in all aspects of life.

Improving Quality of Services and Opportunities

We must seek continually to improve the quality of all the services and opportunities for visuallyimpaired people and promote the use of standards where the results are measured primarily byclient satisfaction.

This might be achieved by measuring and monitoring outcomes.Standards based on the statistical measurement of inputs and outputs have some use but are no

substitute for measures of the actual achievements of visually impaired people.A large number of high-quality services and opportunities are available for visually impaired

people around the country. But not only is the provision uneven in quantity and geographical spread(see Extending Reach, below), the quality varies widely even where services are nominally available.The aim of this agenda item is to help those providing services and opportunities to improve theirown standards by sharing the experiences of others and, above all, by working with visually impairedpeople to measure their achievements against their aspirations and to offer them choices and oppor-tunities to enable them to achieve more.

Extending Reach

This includes increasing the numbers of people served and increasing the geographical spread ofservices and opportunities and improving access to them.

Just as quality varies around the country, so does the availability of the services and opportuni-ties that are essential to ensure the prevention, cure, and amelioration of visual impairment. Issuesof particular concern include the following:

• The provision of health and social services and the contributions of local and national volun-tary organizations are so variable and diverse, that it is hard to make judgments on where isthe greatest need for action.

• People from ethnic minorities seem to be poorly served.• People with dual sensory loss or with multiple disabilities need specialist attention that they

often do not receive.

Exhibit 5.1.6 Vision 2020 UK Proposal for a National Agenda for Action on VisualImpairment


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Peacock and Remington were pleasedthat Vision 2020 UK was established, hadarticulated a common agenda, and wasbeginning to move forward. They werealso encouraged that participating agencieswere standing on equal footing, regardlessof their respective sizes, and that the largerparticipants had assumed funding theorganization’s basic costs for the first threeyears of its operation. (See Exhibit 5.1.7for Vision 2020 UK provisional members.)Nevertheless, both were also well awarethat this was only a first step and that overtime, they would have to charge member-ship fees to remain sustainable. They also

knew that in order to grow, the umbrellaorganization would likely have to considervarious strategic alliances and mergeroptions. The challenges for making Vision2020 UK effective did not stop there.Could all of the member organizationsreally speak with a unified voice to all thevaried stakeholders interested in the visual-impairment sector? What would it take tomove from words in a document to exe-cuting the plan and achieving meaningfulcost-saving efficiencies among members?How would they justify that this approachwould be the best utilization of scarcehuman and monetary resources and was


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• Action for Blind People • National Federation of the Blind• Albinism Fellowship • National League of the Blind and• Association of Blind Asians Disabled• Association of Directors of Social • National Library for the Blind

Services • Nystagmus Network• Blind Centre for Northern Ireland • Opsis• British Computer Association of the Blind • Partially Sighted Society• British Orthoptic Society • Retino Blastoma Society• British RP Society • Royal National Institute for the Blind• Calibre • Royal College of General Practitioners• Christian Blind Mission • Royal College of Ophthalmologists• Circle of Guide Dog Owners • Scottish National Federation for • College of Optometrists the Welfare of the Blind• Fight for Sight • Share the Vision• Guide Dogs for the Blind Association • Sightsavers• HSBP Henshaw’s • Society of Blind Lawyers• Impact Foundation • SPECS• International Glaucoma Association • St. Dunstan’s• International Centre for Eye Health • TNAUK• Iris Fund • Thomas Pocklington Trust• LOOK • Torch Trust• Macular Disease Society • VIEW• National Association of Local Societies • Vision Aid Overseas

for Visually Impaired People (NALSVI) • Wales Council for the Blind

Exhibit 5.1.7 Vision 2020 UK Provisional Members, 2002


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the most effective mechanism for servingthe United Kingdom’s visually impaired?From GDBA’s board’s perspective, wasthis the best use of Peacock’s time?

Peacock strongly believed that if thenonprofit sector was going to succeed inserving the needs of the visually impairedpopulation over the next five years, thisnewly constituted network would have tobe made to work. Peacock pondered how

to make that happen and what her andGDBA’s role should be in that effort.

NOTES

1. £ = pound sterling; £1 = $1.65 as ofNovember 27, 2002.

2. This is a term for a nominal amount of con-sideration, equaling roughly one British pound.


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230

In April 2002, Darell Hammond, CEOand cofounder of KaBOOM!, looked

back over the past seven years since he haddecided to found a nonprofit organizationwith the mission of ensuring that every child,through the participation of their communi-ties, had healthy play opportunities.

He had grown the organization from a$25,000 start-up in 1995 into a lean, highlyinnovative, national nonprofit with a $5-million annual budget and 17 full-time staffmembers who led efforts from offices inWashington, D.C., San Francisco, Chicago,Atlanta, and Burlington, Vermont. Usingits signature “community-build” playgroundprocess, KaBOOM! had involved more than

65,000 volunteers in the hands-on construc-tion of 338 playgrounds, primarily in urbanand low-income communities (see Exhibits5.2.1 and 5.2.2).

KaBOOM! had generated more than$14.5 million in contributed revenue forcommunity playgrounds, largely throughbusiness/social sector partnerships withThe Home Depot, CNA Insurance, Ben& Jerry’s Homemade, Target Corporation,Kimberly-Clark Corporation, Motorola,Computer Associates, Snapple, Sprint, andmore than 40 other corporate partners.

Hammond was proud of the successKaBOOM! had achieved and felt thatthe organization had now reached the

Case Study 5.2KaBOOM!

James Austin

KaBOOM! attempts to do what we know is so important and that is to provide spacesand playgrounds in neighborhoods around the U.S., particularly very tough difficultneighborhoods where they haven’t had a playground for many years because ofviolence and gangs, drugs and some of the other challenges they face.

—Hillary Rodham Clinton1

AUTHORS’ NOTE: Copyright © Harvard Business School Publishing, case number 9-3303-025.Used with permission.

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critical juncture where it was ready to turn aneffective, tested program model into a sys-temic solution. But to do this implied a sig-nificant shift in strategic focus. Rather thanjust continuing to directly build playgroundswith its corporate partners, KaBOOM!would increase its emphasis on indirectbuilds by providing training and grant pro-grams to help communities independentlyreplicate the community-build playgroundmodel. Additionally, KaBOOM! wouldbecome a knowledge leader and advocate forchildren’s right to play.

The KaBOOM! staff and board of direc-tors were considering the opportunitiesand challenges of broadening their strategicdirection. Competition had increased fromseveral nonprofit organizations and for-profit companies that offered similar ser-vices for building community playgrounds.How would the new strategic directionaffect the position of KaBOOM! in this

landscape? How would the new strategyimpact relationships with current fundingpartners? What type of new partners shouldKaBOOM! pursue to support the new strat-egy? Would support for the proposedprogram strategies hinge on new types ofbusiness/social sector partnerships? Whatwould be the organizational implications ifsuch a broadened strategy were pursued?

CHILDREN’S RIGHT TO PLAY

Benefits of Children’s Play

Playing has a very important role inthe development and learning of children,building imagination and promotingsocial skills among other things. As KarenDeBord and Nick Amann, two researchersfrom North Carolina State University,reasoned:

231Case Study 5.2: KaBOOM!

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Year 1997 1998 1999 2000 2001 2002 (p)

Total income 1,812 3,785 2,540 2,900 6,356 n/aTotal expense 1,300 2,416 3,157 3,383 4,681 n/a

Net income 512 1,369 (617) (483) 1,675 n/a

Net assets 519 1,987 1,370 873 2,548 n/a

Playgrounds 38 40 51 29 83 97Active funding partners 3 8 7 4 21 26Retention of funding partners 66% 63% 71% 100% 81% n/a

Exhibit 5.2.1 Financial Performance and Program Results of KaBOOM!

SOURCE: Guide Star.com, and KaBOOM! internal documents.

(p) = preliminary.n/a = not available.

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Current Partners Past Partners

• AARP • Akin Gump Law Firm• Aid Association for • Black Entertainment Television

Lutherans/Lutheran Brotherhood • British Airways/Patterson • American Academy of Dermatology Communications• American Academy of Orthopaedic • Cafritz Foundation

Surgeons • Chicago Park District• Armstrong Foundation • Chicago Tribune Foundation• BASF • CoStar Realty Information, Inc.• Ben & Jerry’s Homemade, Inc. • Epstein, Becker & Green• Chicago Housing Authority • Erik Jonsson Community School• CNA Foundation • First Steps to School Readiness of• Computer Associates International, South Carolina

Inc. • First Union Corporation• Deloitte Consulting • Fred C. Rummel Foundation• Discover Financial Services • Freddie Mac Foundation• Motorola • Illinois Attorney General’s Office• NASCAR (for the dissolved Dixmoor Park • National Society of Collegiate District)

Scholars • John Nuveen & Co.• Odwalla • Jewel/Osco, an Albertson’s Co.• Oregon Association of Orthopaedic • Kankakee Valley Park District—

Surgeons • Orthopaedic Associations of• Snapple Kankakee• Sprint Foundation • Kimberly-Clark Corporation• Target Corporation • Nike/Reuse-A-Shoe Program• The Boston Consulting Group • Novus Services• The David and Lucile Packard • Primordial/Zoob®

Foundation • Prudential Foundation• The Home Depot • Redwood City School District• The Washington Redskins • Retired Peace Corps Volunteers• ZS Associates • RREEF Funds and RREEF Funds

–DallasMajor Individual Donors • San Francisco Promise• Aly, Stacey, & Bruce Bloom • SOME (So Others Might Eat)• Mr. Webb Sowden • The Cheesecake Factory• students of American University • The John Buck Company• Mr. Doug Finlay Timberland• Ms. Nancy Rosenzweig & Friends • USAA A Charitable Trust

Foundation • Village of Sun River Terrace• Family & Friends of Daniel Soloma • Walgreen’s• Radian Guaranty/Radian MI • WTTG-TV/Fox

• Yahoo! Employees Foundation

Exhibit 5.2.2 List of KaBOOM! Partnerships

SOURCE: KaBOOM! internal documents.

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Play is to a child what work is to anadult: It is what they do. It is throughplay that children learn about theirworld and the things in it. Play allowschildren the chance to explore theirenvironment, to learn how it works andhow they relate to it. A child can expressfeelings and emotions through varioustypes of play activities (play, art, stories,etc.) far earlier than they can expressthem in words. For older children, playmay be the outlet through which theyconvey emotions that they are eitherunwilling to share verbally or do nothave the sufficient vocabulary toexpress. Through play, children can beanyone, at anyplace, at anytime.2

Furthermore, through physical playactivity, children are able to stay in shapeand reduce the incidence of obesity-relateddiseases like diabetes, sleep apnea, or gall-bladder disease. A study by the NationalCenter for Chronic Disease Prevention andHealth Promotion said, “The proportionof discharges (of children) with obesity-associated diseases has increased dramati-cally in the past 20 years. This increase hasled to a significant growth in economiccosts:”3 In the past 20 years, hospital costsfor diseases related to childhood obesityincreased 260% in real terms, from $35million 1979 to $127 million in 1999 (inconstant 2001 dollars).

Current Status of Playgrounds

Children are playing less and in less thanideal places, such as alleys, streets, and decay-ing buildings. Darell stated, “If children areour future, why are we allowing them to play

in garbage-strewn lots, abandoned cars,bushes riddled with crack vials and needles,and boarded-up buildings? It is unacceptablefor children to grow up without a safe placeto play.”4

Not only is there a shortage of play-grounds, but four out of every five areconsidered unsafe (see Exhibit 5.2.3).5

Playground accidents are a leading cause ofinjuries to children. According to the U.S.Consumer Product Safety Commission, everythree minutes, a child in the United Statessustains a serious injury from a playgroundaccident.6 That means that every year, morethan 200,000 children suffered playground-equipment injuries that required emergencyroom treatment, with many requiring opera-tive intervention.7 The playground injury ratehas more than doubled in the last 20 years.8

Darell asserted, “Community residents needto know that they are not powerless againstthe statistics which say that neighborhoodplaygrounds are full of safety hazards.”9

DARELL HAMMOND

A charismatic 30-year-old social entrepre-neur, Hammond’s accomplishments wereachieved in the face of several challenges. Hehad no formal training in community devel-opment or nonprofit administration, but hehad many innate talents. Additionally, hewas challenged by dyslexia, but he had tena-ciously applied himself to understand thebusiness of his mission, taking a small start-up investment and turning it into a multi-million-dollar social enterprise. He did notcomplete college, but he had attracted starsfor his staff, recruiting them from for-profit,government, and nonprofit sectors—manyalumni from top universities.


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Hammond believed that he shared manyqualities with children—including curiosity,boundless energy, and a willingness to pickhimself and those around him up and tokeep going during challenging times. Thesetraits were helpful to the organization inits first two years, which were rocky andmarked with a high staff turnover and, hequickly admits, memorable missteps of hisown. Over time, he believed that he hadevolved into a mature operational andpeople manager, running an organizationwith high donor and staff retention rates,plus award-winning program innovations.3

The seeds of his lifelong commitment tothis cause come from his experience grow-ing up with his seven brothers and sisters ina children’s home in Mooseheart, Illinois,which was funded by the local and nationalMoose Lodge community of 1.7 millionmen and women. The experience shapedboth his perspective on the power of volun-teer service and his commitment to givechildren opportunities to play. He hadbecome a passionate advocate who “eats,sleeps, and breathes” play. He developedan encyclopedic knowledge of everythingthat touched the cause—from community


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• 80% of the playgrounds lacked adequate protective surfacing, which was the most critical safetyfactor on playgrounds because approximately 75% of all injuries were caused by falls.

• 48% of playgrounds had climbers and 36% had slides where the height of the play equipment isgreater than six feet high, which was higher than necessary for play value, and only served toincrease the risk of injury.

• 47% of all playgrounds had peeling, chipped, or cracking paint on equipment surfaces.

• 38% of playgrounds had small gaps, open S-hooks, and other protrusions, which posed clothingentanglement hazards, in particular, drawstrings on clothing.

• 38% of playgrounds had unacceptable dangerous equipment, such as chain or cable walks,animal swings, and individual climbing ropes or exercise rings.

• 34% of playgrounds had improperly sized openings in the play equipment that posed a headentrapment hazard that might lead to strangulation.

• 31% of slides and climbing equipment did not have an adequate fall zone under and around theplay equipment. Other equipment and obstacles in the fall zone posed hazards where a childmight fall.

• 27% of playgrounds with swings had some swings that were either too close together or too closeto swing supports, which increased the risk that a child could be hit by a moving swing.

• 13% of playgrounds with swings had swing seats that were made of wood, metal, or other rigidmaterial, which increased the severity of injury if impact occurred.

Exhibit 5.2.3 Public Playground Safety Statistics

SOURCE: Adapted from U.S. Public Interest Research Group, The Consumer Federation of America. “PlayingIt Safe: June 2000. A Fifth Nationwide Safety Survey of Public Playgrounds,” viewed at <http://www.pirg.org/reports/consumer/playground2000/playgroundreport2000.PDF> (April 2, 2002).

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engagement in child’s play, to playgroundequipment design, to ADA guidelines, toemerging community development theory,to pending legislation, to the intricacies ofbusiness challenges facing myriad prospec-tive corporate partners.

Hammond credited a number of men-tors for helping him shape his leadershipphilosophy, most notably Marian WrightEdelman, founder of the Children’s DefenseFund; Suzanne Apple, vice president ofcommunity affairs for The Home Depot;Billy Shore, founder of Share Our Strength;Michael Brown, cofounder and presidentof City Year; and Dr. John Kretzmann,codirector of the Assets Based CommunityDevelopment Institute at NorthwesternUniversity, each of whom had helped himunderstand the challenging work of buildinga citizenry in a community of people whohave the skills, know-how, and resourcesto create a stronger neighborhood anddemocracy.

KABOOM!

History

In 1995, armed only with this vision,$25,000, and a lot of motivation, Hammondand KaBOOM! cofounder Dawn Hutchisonbegan to seek partners to support theirendeavor. In 1996, Hammond met SuzanneApple, vice president of community affairs atThe Home Depot, when they spoke on apanel at a housing conference. A few monthslater, Hammond was able to get the supportfrom The Home Depot and from communitymembers, who raised $9,000 for the project.Together, members of The Home Depot andcommunity volunteers joined their efforts to

create the first-ever KaBOOM! playgroundin Washington, D.C.

The KaBOOM! vision, from the outset,was “to help develop a country in which allchildren have within their communities accessto equitable, fun, and healthy play opportuni-ties, with the participation and support oftheir families and peers.” The communitycomponent of this vision was key, as the orga-nization believed that disconnection amongneighbors eroded civic life and undermineda community’s ability to respond to and pre-vent serious social problems. KaBOOM!aimed to provide an antidote for this discon-nection: a catalytic cause that would inspirehands-on, collaborative civic engagement.Every KaBOOM! playground project, there-fore, was driven by the families and childrenwho would use the playground, and fundingpartners were coached to “do with, don’tdo unto” so that at the end of a playgroundpartnership, the partners would have built astrong community through the process ofbuilding a playground.

During 1997, KaBOOM! started itsLET US PLAY campaign to fulfill a commit-ment to General Colin Powell’s “America’sPromise: The Alliance for Youth” launchedat the president’s Summit for America’sFuture. Through the campaign, KaBOOM!committed itself “to build, renovate, or pro-vide technical assistance to develop 1,000community-build playgrounds by the end ofthe year 2000.”10 The goal was to enrichmore communities with playgrounds,enable more children to play safely together,and encourage more neighbors to meet,work, and solve their problems together. Bythe end of the year, KaBOOM! had raised$1.8 million and created 38 playgroundswith Kimberly-Clark and CNA as new cor-porate partners.


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In 1998, KaBOOM! found itself withmore resources than it could administer.Revenue doubled to $3.8 million througheight corporate partnerships that supported40 builds, registering a net income of $1.3million for the year. However, because ofthe unprecedented growth and the lack ofsystems in place to manage that growth,some partners complained that it was hard towork with KaBOOM! When there was aproblem, Hammond said he “would jumpon a plane and solve the problem; but thatwas the problem.” Apple said, “KaBOOM!was building the plane while they were flyingit, and they had to slow down to speed up.”

As a result of these problems, several part-ners decided to reduce or terminate theirinvolvement with KaBOOM! In 1999,KaBOOM! revenues fell by one-third to $2.5million through seven partnerships (seeExhibit 5.2.1). However, KaBOOM! decidedto increase the number of playground buildsto 51, which generated a deficit for the yearof $617,000. The appearance of a deficitwas also created by the fact that accountingstandards required KaBOOM! to bookrevenue received in advance for multiyearprograms in the year that the grants werereceived.

Faced with key partners indicating thattheir support to KaBOOM! would endunless things changed, Hammond started tosurround himself with people with opera-tional experience that could help KaBOOM!improve its operations. He invited PeteD’Amelio, senior vice president of opera-tions of The Cheesecake Factory, to becomea board member and hired a more seasonedmanagement team. Since then, KaBOOM!has dedicated considerable energy to impro-ving its product consistency and management

of the partnerships. As a result of theseefforts, KaBOOM! revenue, partnerships,and builds grew consistently. By year-end2001, KaBOOM! reported total income of$6.3 million, 83 playgrounds built, and 21partnerships.

Organization

To carry out its mission, KaBOOM!employed 17 full-time staff with an organi-zation structure driven by work process(see Exhibits 5.2.4, 5.2.5, and 5.2.6).Project management staff (“PlaygroundDream Builders”) were responsible forcoordinating and executing KaBOOM!playground-build projects and leadingcommunity partnership development. “TheAdministrators of Play” provided adminis-trative support to KaBOOM! operations.Marketing and development staff (“ThePep Squad”) were responsible for market-ing, development of revenue-generatingpartnerships, account services, and publicrelations. From the perspective of externalpartners, the KaBOOM! structure mirroredthat of a small marketing agency, as staffwere also organized into project-specificaccount teams with billable hours andaccount management systems.

Hammond explained that “humanresources are absolutely, no doubt, one ofour biggest challenges going forward . . .retaining, training, and recruiting newpeople are critical activities for us achievingour new plan.” As a result, by 2001,KaBOOM! had implemented an approachaimed at having “the right people in theright place, at the right time, and withthe right training.” This involved paying


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competitive salaries and implementing anincentive system that rewarded employeeswhen corporate goals were met orexceeded. The incentive system for 2001was structured so that all employees wouldreceive a bonus of up to $3,000 if certainmetrics for success were accomplished bythe entire team.

Operations

To ensure that every child has healthyplay opportunities, KaBOOM! historicallyhad focused on its core strategy of commu-nity builds financed through corporate part-nerships. With sustainable partnerships withmajor corporations, the organization remainedfocused on this program with a steady growthrate. However, KaBOOM! was now on thebrink of implementing its three-part programstrategy (lead, educate, and advocate) in abolder, more assertive fashion—maintainingthe pace of its community-build playgroundprojects, maintaining its educational pro-grams such as the Playground Institute, andmaintaining its position on the child’s rightto play, but “turning up the volume” on thelatter two areas to extend its impact (seeExhibit 5.2.7).

Leading

Broad-based community participation,grassroots volunteerism, and a self-help spiritwere the hallmarks of a KaBOOM! commu-nity-build playground process. KaBOOM!typically worked with volunteer leaders toplan and design a playground over a 27-weekperiod, applying best practices from theirwork on an eight-step project plan to

research, conceive, plan, design, coordinate,build, celebrate, and maintain a communityplayground. This documented process, the“KaBOOM! Roadmap,” helped communi-ties and funding partners leverage their exist-ing assets, get creative in their approach toevent organizing, access templated projectmaterials, and ensure a safe, fun playgroundproject. (See Exhibits 5.2.8 and 5.2.9.)

The playground Build Days were high-energy events that involved from 50 to 500volunteers who built the playground fromthe ground up in a single day. They werebarn-raising events, with an urban twist. Theday began with an empty site and ended witha new and safe playground for children. Bycapitalizing on the talents and resources thatare already in a community, KaBOOM! andits funding and community partners soughtto build and revitalize a community throughthe process of building a playground.

For each project, KaBOOM! providedtraining, materials, and support to corporateand community leaders in their projects.

• The community partner (typically ayouth-serving nonprofit organizationsuch as a YMCA or Boys & Girls Club)provided land and worked withKaBOOM! to organize communitymembers to help design, plan, fund-raise, and actually build the playground.

• The funding partner (typically acorporation) leveraged a financialinvestment in the project with itsteam’s expertise and building labor.

• KaBOOM! provided full-service pro-ject management for the duration ofthe project—from the creation andfacilitation of planning committees, toplayground design and procurement,


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KaBOOM! Board of Directors

Suzanne Apple Dawn HutchinsonThe Home Depot Cofounder KaBOOM!

Michael Brown Erin PattonCity Year Edelman Public Relations Worldwide

Pete D’Amelio Rey RamseyThe Cheesecake Factory One Economy Corporation

Tony Diefell Nancy RosenzweigHarvard Business School Zip Car

Helen Doria John SarveyChicago Park District National Corps/City Year

Peter Farmsworth David WoffordNational Basketball Association Wofford Consulting, Inc.

Ken Grouf Christopher ZorichYahoo! The Christopher Zorich Foundation

Darell HammondKaBOOM!

KaBOOM! Advisory Board

Bob Boulter Vanessa KirshJubilee Enterprise of Greater Washington New Profit Inc.

Fred Druck Dale MillerPlayground Environments Playworld Systems

Marian Wright Edelman Jean ShappetChildren’s Defense Fund Playground Design and Safety Consultant

Bob GoodwinPoints of Light Foundation

Exhibit 5.2.5 KaBOOM! Board of Directors and Advisory Board (April 2002)


to insurance considerations, to super-vision of the construction process,and more.

KaBOOM! also managed SPRUCE©,a national, multimarket playground-improvement program that had helped

rehabilitate 1,500 playgrounds. KaBOOM!planned to pilot an Urban SkateparkProgram, which would use the community-build process to facilitate skateboardpark construction projects, each of whichwould include design events with teenagers,construction days, and pre- and postbuild

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KaBOOM! Playground Dream Builders

Melanie Barnes, Project Manager A native of Omaha, Nebraska, Melanie says that as a child onthe playground, she was a game leader—a natural role for the second oldest kid in a family of sevenchildren. All grown up, she’s still a leader, an alumnae of the AmeriCorps*NCCC program, and anationally certified playground inspector. The mantra she keeps at the top of her mind while at work?“It’s for the kids,” she says often. And that it is, for Melanie’s work at KaBOOM! centers on managingcommunity-build playground projects on behalf of and with several funding and community partners.She began volunteering with KaBOOM! in 1997 and became a Boomer in 2000.

Kate Becker, National Director of Project Management Proud of her Ohio roots, Kate has lived inthe District of Columbia for eight years. Her first memory on a playground as a child is being pushedhigher and higher by her sister who would then run underneath the swing leaving Kate tickled into afit of giggles. Kate’s involvement with KaBOOM! goes back five years, first as a volunteer and thenby coordinating the 18- to 24-year-olds she managed to come out and serve on KaBOOM! projects.From the aspect of being the director of the AmeriCorps*NCCC Capital Region Campus, Kate wasalways impressed with the level of organization and the immediate impacts that KaBOOM! has in acommunity and is thrilled to be a part of it.

Dan Casey, Senior Project Manager A native of Chicago, Dan says that as a child on the play-ground, he was a behind-the-scenes kid who enjoyed playing hide-and-seek and other games ofmystery (and mischief). A mathematics whiz with a degree from the University of Illinois, his quietdemeanor hides the fact that he lives on the edge and has been known to risk just about anythingfor a good laugh or sports bet. At KaBOOM!, Dan manages community-build playground projects onbehalf of and with several funding and community partners and is a nationally certified playgroundinspector. He became a Boomer in 1999.

Adam Klarfeld, Project Manager A native of Kansas City—both in Missouri and Kansas!—Adam saysthat as a child on the playground, he was the kid to beat, the one who wanted to win at racing, climb-ing, nearly everything! At KaBOOM!, that competitive nature means he aims to create the best play-grounds we build. A graduate of the University of Pennsylvania, Adam says that four years in Phillytoughened him up a bit, preparing him for the hard-nosed world of consulting for trucking and telecom-munications industry clients at Mercer Management Consulting. After time in suits and meetings, Adamhas changed gears and opted for a career in T-shirts and construction meetings with KaBOOM!

Jennie Connor, Home Depot Project Management & Account Services A native of Tennessee,Jennie Connor likes to flip out . . . and over and under. You see, as a child on the playground, Jenniewas the girl who could do flips for hours and was most partial to the monkey bars. Today, she managesKaBOOM! community-build playground projects and plays a critical coordinating and account servicesrole for all KaBOOM!–Home Depot partnership programs. A graduate of Furman University in SouthCarolina, Jennie parlayed her studies in communications into a position at The Home Depot prior to herwork with KaBOOM! Having logged more than two years in coordinating community relations for TheHome Depot, and two nonstop months on the road traveling and working with all KaBOOM! offices,Jennie is well prepared for her new role. A Boomer since Fall 2001, she works from the Atlanta StoreSupport Center and is working toward her national certification in playground inspection.

Suzy Lovercheck, Project Manager A native of Palo Alto, California, Suzie says that as a child onthe playground, she was a tomboy, always wanting to challenge the boys in soccer, handball, and foot-ball, as well as keep up with the girls playing jump rope and tether ball. She is willing to try almost any-thing once, especially when it comes to food! Suzie graduated from the University of California-Davis

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in 1999 and went on to complete two years with AmeriCorps*NCCC, where she challenged herselfalongside her teammates in both work and play. At KaBOOM!, Suzie is focusing on the Child CarePlayground Safety Initiative, a program funded by the David and Lucile Packard Foundation for north-ern California child-care centers. She became a Boomer in February 2002.

Kristina Saleh, Project Manager Embracing dual homelands of San Lorenzo, California, andPhillipsburg, Montana, Kristina says that as a child on the playground, she was a possum . . . hang-ing and dangling from every possible item. Kristina cites as her favorite mantra this quote fromRobert Frost: “The world is full of willing people, some willing to work, the rest willing to let them.”This graduate of Knox College helped lead public relations for Project Vote Smart during the 2000election. Now she’s leading a litany of efforts to boost play opportunities for children by managingcommunity-build playground project on behalf of and with our funding and community partners. Shebecame a Boomer in 2001.

KaBOOM! Administrators of Play

Darell Hammond, Founder & Chief Executive of Play A native of Chicago, Darell says that as achild on the playground, he was a rock thrower and climber, as well as a Boy Scout with a knackfor community service, outdoor fun, and old-fashioned leadership. Today, he leads a troupe ofBoomers in throwing rocks (at unsafe playgrounds) and climbing (to reach more people about ourmission). It’s proof that childhood fun can lay the groundwork for great things! Darell is married, apopular speaker at conferences and universities, and a nationally certified playground inspector.At KaBOOM!, he is responsible for all operations for and growth of the nation’s leading nonprofitorganization of its kind. Darell founded KaBOOM! in 1995 with board officer Dawn Hutchison.Darell is a board member of The Independent Sector, a consortium of the nation’s leading nonprofitorganizations.

Susan Elliot, Special Assistant to the CEO A native of North Andover, Massachusetts, Susan saysthat as a child, she was a high-flyer on the playground, fond of the wooden swings that she and hergrandmother—who ran the community center—visited regularly. Those wooden swings have beenreplaced with modern designs, but the desire to fly high, move fast, and catch the wind remains inSusan, who bikes, skis, and snowboards with her sons Nathan and Conner with a passion. A newtalent at KaBOOM!, Susan will provide support to the KaBOOM! board of directors and the seniormanagement team. She became a Boomer in 2001.

Joyce E. Joyce, National Director, Administrative Services A native of Elkton, Maryland, Joycesays that as a child on the playground, she was swinger who aimed high and showed no fear, alwaysasking to be pushed higher and faster. An only child for whom the playground was the perfect socialactivity, Joyce’s favorite saying comes from a childhood icon, Winnie the Pooh: “Things are alwaysso much more grand and wonderful when your friends are there to share them.” Last year, life gotgrander with new husband Butch, new stepson Daniel, and new last name Joyce, making her theonly double-named Boomer! At KaBOOM!, Joyce manages administrative and financial operationsfor the four KaBOOM! offices, making her extremely popular among staff on paydays. She becamea Boomer in 1999.

Gayle Todd, Administrative Assistant A native of Amherst, New York, Gayle was the child usuallyfound playing games on the playground—hopscotch and jump rope games were only set aside for adon’t-try-this-at-home game called “ghostrider.” After earning a degree from the State University ofNew York at Oswego, she traveled for a few years and ended up in Vermont working for KaBOOM!funding partner Ben & Jerry’s Homemade, Inc. Gayle now keeps KaBOOM!’s national headquartersin good running order as the office’s administrative assistant. She became a Boomer in 2001.


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Farrell Winkler, Administrative Assistant A native of Palos Heights, Illinois, Farrell says that as achild on the playground, she was a tomboy. Today, she believes that life is too short to worry aboutthe wrinkles in your jeans. A recent graduate of DePaul University, Farrell is an aspiring mysterywriter who loves children and hanging out with her niece, in particular. At KaBOOM!, Farrell providesmarketing support to the KaBOOM! team and handles administrative responsibilities for its Chicagooffice. She became a Boomer in 2001.

KaBOOM! Pep Squad

Sarah Gores, Community Development Coordinator A native of St. Paul, Minnesota, Sarah saysthat as a child on the playground, she was a tree climber and a builder of forts in lilac bushes. Today,she puts her knowledge gained on the job and through her playground safety certification to work bybuilding playgrounds and butterfly gardens and more. She is the only Boomer with a cat and a motor-cycle, and the one entrusted to spread the word about our work to community organizations. AtKaBOOM!, Sarah manages outreach and service to community groups that are interested in theKaBOOM! model of community-build playgrounds. She became a Boomer in 2000.

Amy Kaufman, Account Services Manager A native of Chicago, Amy says that as a child, sheused the playground to let her imagination soar. This creative spirit carries over into her life, espe-cially into her work at KaBOOM! Amy is an avid traveler who loves visiting the world beyond her ownneighborhood. The exploration and discovery of traveling help her to connect with people from allwalks of life. At KaBOOM!, Amy puts that energy to work, as she will help to systematize accountservices and communicate with funding partners to discuss the progress of their programs. Shebecame a Boomer in January 2002.

Tom Mitchell, National Director, Account Services & Project Management A native of Coronado,California, Tom says that as a child on the playground, he was a swinger who loved to climb fast andhigh, feeling the air rushing into his face on the upsweeps. His childhood memories are vivid withplayground time spent with his dad (the man who took him high in swings!) and grandfather (whoendured Tom’s constant requests to go to the playground). All that time flying high might explainTom’s favorite mantra: “If it doesn’t kill you, it only makes you stronger.” He flexes his muscles forKaBOOM! by managing our relationships with funding partners and donors and helping to encour-age new funding partners to support KaBOOM! playgrounds. He became a Boomer in 1999.

Kimberley Evans Rudd, National Director, Marketing & Development A native of Chicago, Kimsays that as a child on the playground, she was a screamer—the kid who screamed loud and proudgoing down the gigantic slide at Belle Island in Detroit, where she grew up. Now her favorite peopleto play with are her husband David and their five-year-old twins, who make their own fair share ofscreams and squeals. Her favorite mantra was something her grandmother said daily to encouragefamily participation in chores: “Many hands make light work.” At KaBOOM!, many hands help withKim’s work in leading KaBOOM! marketing efforts, promoting community playgrounds, child’s play,and the other great reasons for supporting KaBOOM! She became a Boomer in 1998.

Carrie Suhr, Director of Corporate Development & Strategy A native of Baltimore, Maryland,Carrie says that as a child on the playground, she was a lightning-fast slide racer and an architect ofsandbox cities! Never one to be intimidated by the speed of slides or the challenges of sand, Carrie’sfavorite motto has become “Ain’t nothing to it but to do it.” Now, she’s doing “it” at KaBOOM!, man-aging efforts to begin new marketing partnerships with corporations that result in increased fundingand support for community playgrounds. Carrie became a Boomer in 2001.

Exhibit 5.2.6 KaBOOM!’s Staff (April 2002)


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events with athletes to promote the mainte-nance and programming of the skateboardpark.

Education

KaBOOM! helped communitiesindependently replicate its community-build playground process through a freeGetting Started Kit publication, five Tool Kit

manuals, an annual Playground Institutetraining conference, a playground challengegrant program, its Web site, and demonstra-tion playground builds. (See Exhibit 5.2.10.)

The annual Playground Institute pro-vided community and nonprofit leaderswith an overview of basic organizingskills such as fund-raising, publicity, andvolunteer recruitment, along with an oppor-tunity to learn how to build community

Exhibit 5.2.7 KaBOOM! Core Strategies


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• June 14, 2001First meeting of Playground Planning Committee.

• July 2–3, 2001Members of Planning Committee worked with K-4th graders in summer school at Francis ScottKey to design their dream playground.

• July 10, 2001Design Day and Kick-off Community Meeting at Francis Scott Key.

• August 3, 2001Goal: To complete playground design and order equipment.

• August–September 2001Recruit volunteers, raise funds, organize and plan Build Day.

• October 2001Site preparation and removal of unsafe play structure by SF Unified School District.

• October 2001Build Day, installation of new play structure by 200 community volunteers.

• OngoingMaintenance of play structure, continued improvement of play yard, community-strengtheningevents.

Exhibit 5.2.8 Timeline of Sunset Neighborhood Community Playground Build



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Exhibit 5.2.9 Building the Playground


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Welcome! By responding to this Getting Started Kit Questionnaire, you are creating a profile aboutyour project. When you send the profile to KaBOOM!, we will review and track your organization’s pro-ject in an effort to provide support, information, and other resources (including possible funding) foryour project.To complete the questionnaire and get your profile in our “playground pool,” please do thefollowing:

Answer the questions below, on your letterhead.

Take photographs of your site (print or digital).

Obtain a letter of support from your executive director, CEO, or board officer.

Sketch an overhead layout of your site, showing the playground area and site measurements inrelation to any buildings, streets, trees, parking lots, and other major structures.

Put it all in an envelope and mail to:

KaBOOM! Playground Profile333 S. Wabash, Suite 16 SouthChicago, IL 60604–4107

Or, submit online to [email protected] you have any questions regarding your Playground Profile, please call 202–659–0215, ext. 225.

Questions

1. Describe your group, its mission, history, and background. If your group is part of a local or nationalorganization, please describe your branch of the organization (such as “one of 12 schools in theDistrict “or “the fourth largest chapter and the only one serving the Fox River Valley “).

2. Describe your organization’s relationship to the community in which the build is located.

3. Describe your organization’s experience with volunteer programs.

4. Describe the children you serve: their ages, ethnic backgrounds, and any special needs ortalents they may have.

5. Describe the impact a new playground will have on those children and on your community.

6. Describe how you think the KaBOOM! community-build process compliments the vision andplan for your new playground.

7. If your site is selected for a project, how much and what kinds of involvement and support doyou expect to have from people in your organization and/or community?

8. Do you currently have a playground on the site, or is this the first playground that will exist on thissite?

a. If there is a playground, please describe it: the existing equipment and its approximateage, the dimensions of the site, and the surface below the equipment (wood chips, grass,concrete, asphalt, dirt, sand, etc.)

b. If there is no existing playground, please describe your future playground site and itsdimensions. Do you currently own or lease this property? What is on the property now?(grass, dirt, abandoned car, sprinkler system, trees, etc.) What was there before? (aban-doned building, vacant lot, gas station, etc.)

9. Tell us about your project’s budget? What percentage of your budget do you expect to raise fromfund-raising activities, foundation grants, corporate gifts/sponsorships, individual donors, contri-butions from your lead organization (such as a national office, a school district office, or a citydepartment); your totals should equal 100%. If you already have begun to raise funds, how muchhave you raised?

10. Please include the names, daytime phone numbers, and e-mail addresses of two people we cancontact with questions and for status updates on the progress of your playground project.

Exhibit 5.2.10 “Getting Started Kit” Questionnaire


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playgrounds, receive free resource publica-tions, and even qualify for thousands ofdollars in grant monies.

More than 1,300 community leadershad participated in the PlaygroundInstitutes, and 28 trained communities hadreceived grant support from KaBOOM!,The Home Depot, the American Academyof Dermatology, and Playworld Systems.For Playground Institute graduates,KaBOOM! had provided training andguidance throughout the process of build-ing the playground, ensuring that thedesign met safety standards, communityrequirements, and budget guidelines. It alsohad ensured maximum purchasing powerfor the playground equipment, materials,and safety surfacing, and sometimes it hadeven supervised the installation of the newplayground by the corporate and commu-nity volunteers.

Looking into the future, KaBOOM!’sproposed new strategy would modify theinstitute’s curriculum and launch a nationaltraining series that would increase theorganization’s “surface area” by offeringdaylong regional trainings that would letlocal leaders access the expertise of theKaBOOM! staff and learn to replicate itscommunity-build playground model.KaBOOM! would continue to providechallenge grants and would add value inmanaging grants by working with therecipients in all aspects of the build.

In spring 2002, KaBOOM! also wasdeveloping an interactive Web-based pro-ject planning tool that it was consideringmarketing as a free service for publicuse. The tool, which would also be used inconjunction with all KaBOOM! programs,offered playground planners a robust plat-form for community organizing, project

management, as well as dynamic templatesfor proposals, recruitment materials, and afree playground project Web site.

Advocacy and Awareness

When KaBOOM! advocated, it spokeout for the value and benefits of play; itpromoted awareness of what makes a safe,developmentally appropriate playgroundwith high play value; and it provided com-mentary on the legislation behind play-ground safety and playground spending.KaBOOM! had cosponsored media eventsand published and distributed brochureswith the U.S. Consumer Product SafetyCommission. It had raised awareness aboutequity in play on more than 1.2 million pintpackages of the new Ben & Jerry’s icecream flavor, and via its funding partners,media relations, and national broadcastand print advertising.

Under the proposed strategy shift,KaBOOM! would promote the creation ofa legislative initiative that would call uponstates, local governments, and schools todevelop and maintain safe playgroundsthat were designed to provide greateraccess to all children, with special focus onunderprivileged and underserved children.In spring 2002, it was launching a new ser-vice on its Web site, powered by CapWiz,that would allow supporters to writeelected officials and media in support of“healthy play opportunities.”

To increase awareness about the play-ground deficit, KaBOOM!, together withThe Home Depot and Peter D. HartResearch Associates, was planning to mea-sure the perceived U.S. playground deficit infall 2002. This study would provide infor-mation on the quantity, quality, and safety

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of the available playgrounds and alsoexplore the perceptions of the health impactof playgrounds. Finally, KaBOOM! and aresearch team at the University of SouthernCalifornia’s Institute for Prevention Researchhad proposed a five-year study to the Centersfor Disease Control and Prevention thatwould measure the efficacy of playgroundsas environmental interventions to increasechildren’s physical activity and decreasetheir body mass; if funded, the study wouldbegin in 2003.

Competitors

One unintended consequence of successfor KaBOOM! had been increased competi-tion in playground builds. A group offor-profit companies and nonprofit organiza-tions offered similar products, threateningthe KaBOOM! position. This competitionincreased when KaBOOM! documented itscommunity-build process in Tool Kit publica-tions that were sold to the public through theKaBOOM! Web site: <www.kaboom.org>.These publications included: (a) KaBOOM!Playground Owner’s Manual, (b) The GettingStarted Kit, (c) Community-Build PlaygroundManual, (d) Community Fundraising IdeaKit, and (e) A to Z Community Assets &Resources Handbook. Some of its main com-petitors were the following:

•• Learning Structures Founded in1972, Learning Structures had built morethan 600 playgrounds and had offered ser-vices tailored to support each step of thecommunity-build process: planning, design,construction supervision, and budget man-agement.12 KaBOOM! had led their firstthree projects in partnership with Learning

Structures. The company targeted commu-nity customers, providing them with similarservices to those of KaBOOM!

•• Leathers & Associates This for-profitcompany had 30 years of experience design-ing and building playgrounds with commu-nity volunteers. They focused on servinghigher-income communities and were“considered the Lincoln Navigators of theswing-set-and-monkey-bar crowd.”12 Theyhad built over 1,600 playgrounds, whichwere financed mostly by the communities.

•• Jack Morton This for-profit com-pany, and other event management com-panies like it, helped firms improveperformance, increase sales, and buildbrands by creating events, environments,and interactive experiences that motivateand transform employees and customers.13

Although they did not build playgrounds,they had a strong database of current andprospective customers and competed withKaBOOM! by offering companies motiva-tional events similar to the playgroundbuilds for their corporate events.

•• Landscape Structures Founded in1971, Landscape Structures provided play-ground equipment for parks, schools, andchildcare centers. This company was a lead-ing playground equipment company thatemployed 425 people, had a national net-work of independent sales organizations,and was one of the largest makers of play-ground equipment, with sales of almost $96million in 2001. KaBOOM! had built its3rdthrough 120th playgrounds in partnershipwith the company. This respected for-profitcompany now offered to help customersmanage volunteer installation processes toboost equipment sales.


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•• Boundless Playgrounds This nonprofitorganization was created in 1997 andsought to increase public awareness of theneed for playgrounds where children of allabilities could laugh, play, and growtogether. In addition, they provided directservices to people, groups, and companieswho want to design and develop these play-grounds. The goal was to ultimately havefully integrated, universally accessible play-grounds in reach of every child in the UnitedStates. Boundless Playgrounds provided helpin the following areas: coaching and supportin project management, universal play envi-ronment design, community partnerships,volunteer recruitment, community relations,and promotion and fund-raising.14 Up toyear-end 2001, they had completed 30 play-grounds and had 50 more in active develop-ment. Furthermore, in August 2001, theycompleted their first corporate-sponsoredplayground in Providence, Rhode Island,with the support of Hasbro, a company thatdesigns, manufactures, and markets toys.

Business Model

KaBOOM! had gotten attention in thenonprofit sector as an organization whosebusiness model let it fund programs andoperations without relying on traditionalsources of charitable contributions. Necessityhad been the mother of invention forKaBOOM! in its start-up phase: Philan-thropic foundations had hesitatedto commit grant support to a youngorganization, and program officers hadshared that they considered play a luxury,not a critical grantmaking issue priority. Inresponse, KaBOOM! studied the nonprofitorganizations it most admired—Habitat forHumanity, Children’s Miracle Network,

Share Our Strength, and Make-A-WishFoundation—and began building a transac-tional business/social sector partnershipmodel that revolved around the sale of amarketable product, rather than the receiptof a charitable gift.

Excited to pursue a more efficient,market-driven approach to the way non-profits raise funds and run programs,Darell would challenge staff, board, andpartners by asking, “If all we were doingwas moving money from a fixed universe ofcharitable funds, and redistributing it tocommunities, what really—at the end ofthe day—is our added value?” So, ratherthan applying for funding from founda-tion and government grantmakers, theKaBOOM! team generated more than90% of the organization’s operating bud-get from earned income, project fees, licens-ing agreements, product sales, andcause-related marketing partnerships struc-tured with corporate partners.

Of the total income that KaBOOM!earned during 2001, 71% came from cor-porations, 16% from communities, 12%from foundations, and 1% from othersources. The majority of the revenue wasraised through a fee-for-service model.That is, KaBOOM! sold playgroundproject packages that included KaBOOM!management fees, expenses, and equipmentcosts. Sponsorship of a typical playgroundproject ranged in total cost from $40,000to $55,000 per build.

KaBOOM! also generated revenueby offering companies license to partici-pate in KaBOOM! programs and to usethe KaBOOM! trademark, logo, andinformation in connection with productpackaging, advertising, retail program andpromotional contests, and other consumer

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marketing activities in exchange for licens-ing fees, royalties, and promotional supportfor the KaBOOM! mission. These cause-related marketing partnerships generated2% of KaBOOM! total revenues. Oneexample of a deal of this type was the intro-duction by Ben & Jerry’s Homemade ofa new ice cream flavor called KaBerryKaBOOM! in April 2001 (see Exhibit5.2.11). In spring 2002, KaBOOM! wasnegotiating a similar licensing agreementwith Snapple Beverages, Inc.

In addition to corporate funding,KaBOOM! asked communities to helppay a fraction of the costs of building theplaygrounds. Usually, communities paidbetween $5,000 and $15,000, dependingon their capacity to pay, the size of the pro-ject, time available for fund-raising, andthe financial gap needed to complete theplayground.

The third most important source ofrevenue for KaBOOM! was foundationgrants. However, most of these resources

were in turn given by KaBOOM! to com-munities that participated in the annualPlayground Institute organized byKaBOOM! These communities wanted tobuild playgrounds but were not part of thedirect build efforts by KaBOOM! The sizeof the cash support ranged from $5,000 to$15,000 per community.

Individual donations represented lessthan 1% of KaBOOM! income, and itreceived no government funding.

The cost structure of KaBOOM! wasabout two-thirds variable, varying directlyand proportionally with the number ofplaygrounds built. About 15% of the costswere semivariable, and about 20% werefixed. Some of the costs generated byKaBOOM! operations were actually paidby its corporate partners; for example,KaBOOM! office space in Chicago andAtlanta was provided free of charge byCNA Insurance and The Home Depot,which also provided tools and materialswithout cost to KaBOOM!


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Exhibit 5.2.11 Ben & Jerry’s KaBerry KaBOOM!


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Partnerships

KaBOOM! followed a three-step devel-opment cycle that moved individual rela-tionships with potential funding partnersfrom initial contact, to contractual partner-ships, to renewal. These steps included: (1)encouraging a prospective partner to see aplayground build in action; (2) piloting apartnership with a single playground pro-ject; and (3) customizing an approach tofuture build partnerships that maximizedemployee and community relations winsfor the funding partner.

Hammond explained, “Strategy numberone is to bring a potential partner to abuild. It is important that they see it, expe-rience it, and understand its power tostrengthen employee and community rela-tions.”15 As Hammond explained, “It is afunnel effect. A lot of the partners do notinitially invest in the full mission up front.They see KaBOOM! as an avenue toachieve a specific goal,” such as gaininggoodwill or motivating employees at theend of a corporate retreat. KaBOOM! thenworked to expand their investment in thecause. With the exception of a smallnumber of funding partners who made aonetime commitment (such as a family thatbuilt a playground in memory of their son),nearly every funding partner in KaBOOM!history had come back to sponsor morethan one playground project (see Exhibit5.2.12). Additionally, from one year to thenext, an average of 76% of KaBOOM!funding partners renewed their support forKaBOOM! (see Exhibit 5.2.1).

Hammond described the role of partner-ships to the KaBOOM! model: “When cor-porations pour more than money into a

community, putting their people, values,and creativity there, too, it can be powerfulfor everyone involved. Communities learnnew strategies for their development, andemployees feel better about where theywork and what the company stands for. It’sreally a sort of infectious pride that spreadsto everyone who touches that playground.”

Internally, KaBOOM! had five cate-gories for its resource-generating partners:

• Team Build Partners sponsored play-ground projects exclusively. These partnerstypically had short planning horizons andthe ability to allocate $50,000 at a timefrom marketing, human resources, or com-munity affairs budgets. While these part-ners were very important as a source ofresources and potential long-term partner-ships, the relationship was market based.Darell stated, “Companies outsource theseevents to KaBOOM! and KaBOOM!receives a fee for its services.” This groupprimarily included companies such asMotorola, which had sponsored six builds,and associations such as the AmericanAcademy for Orthopedic Surgeons, whichbuilt three accessible playgrounds in con-junction with its annual conference andplanned to continue working withKaBOOM! for the remainder of the decadeas part of a commemorative period educat-ing the public on bone and joint injuries.

• Media Partners helped build awarenessof the KaBOOM! cause through media cov-erage. This group included companies suchas Cumulus Media, which had provided$400,000 of radio coverage in 35 markets.

• Marketing Partners helped build theKaBOOM! brand through cause-related

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Case Studymarketing initiatives. This group includedcompanies such as Odwalla, Walgreen’s,Target Corporation, Fairytale Brownies,Radian Guaranty, and others.

• Donors provided unrestricted cashcontributions. This group included compa-nies like Ryobi, as well as individuals andsmall foundations.

• Long-Term Partners in Play werefunding partners who had made substantiallong-term commitments to the KaBOOM!cause, sponsoring builds as well as educa-tion and advocacy initiatives. In addition tomonetary contributions and volunteers,these companies provided in-kind donationsof their core products, strategic advice,introduction to new partners, brand-build-ing marketing programs, and operationalsupport. For KaBOOM!, these were the

most vibrant, creative, productive, sustain-able partnerships—the model for whatthe team hoped they could cultivate withother partners. The Home Depot, CNAInsurance, Target Corporation, Ben &Jerry’s Homemade, and The David andLucile Packard Foundation had all investedin KaBOOM! at this level.

THE HOME DEPOT PERSPECTIVE

Bernie Marcus and Arthur Blank, twoexecutives laid off from a regional hard-ware chain in Atlanta, Georgia, foundedThe Home Depot in 1978. As of 2002, itwas the world’s largest home improvementretailer with net sales in 2001 of $53.6 bil-lion and almost 1,400 stores that caterto do-it-yourselfers, as well as home

0

2

4

6

8

10

12

14

1 2 3 to 4

Number of Playgrounds Sponsored

5 or more

Exhibit 5.2.12 Distribution of Funding Partners by Number of Playgrounds Sponsored


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improvement, construction, and buildingmaintenance professionals.

To fulfill its need of being socially respon-sible, The Home Depot created in 1992Team Depot, an organized volunteer forcecomprised of its associates.16 Through them,the company participated in social serviceactivities that included affordable housing,at-risk youth, the environment, and disasterrecovery. Jonathan Roseman, who headedcommunity affairs at The Home Depot,explained that KaBOOM! was a great orga-nization to partner with because its businessmodel was “easy to execute, meets a com-munity need, and employees from TheHome Depot love it.”

Since the first playground build in 1996,the partnership between The Home Depotand KaBOOM! had grown continuously. Byyear-end 2002, the partners were on courseto complete their 100th playgroundtogether. In keeping with the way that TheHome Depot supported each of its fournational nonprofit partners, the companysupported the KaBOOM! playground causenot only with cash but also with high-quality building materials and the sweat,strength, and talents of their associates. Theyprovided high-level counseling and supportthrough the participation of Suzanne Apple,vice president of community affairs of TheHome Depot until January 2002, and amember of the KaBOOM! board of direc-tors since 1997; they gave pro bono officespace for KaBOOM! in Atlanta; they wereworking to develop special partnerships forKaBOOM! with its vendors and with enter-tainment and sports promotional partners,such as NASCAR; they created two televi-sion commercials about community-build

playgrounds (which aired in 1999 and2000); and in the beginning, they had evenassisted by filing the incorporation papersfor KaBOOM!

The Home Depot measured throughrandom satisfaction surveys thatKaBOOM! consistently scored very highon improving employee satisfaction.“Supporting the building or restoration ofcommunity playgrounds represents veryaccurately what The Home Depot is allabout,” commented Jonathan Roseman.Through these activities the companyshowed that it was about meeting commu-nity needs, bringing people together,empowering them, and helping realize theirdreams. KaBOOM! had consistently deliv-ered events that attracted media coveragefrom Time, Newsweek, CNN, NBC’s TheToday Show, the Washington Post, theNew York Times, and many others.

When The Home Depot had a leadershipchange with Robert Nardelli becoming theCEO, both organizations sought to keep thepartnership strong through the transition bylooking for ways to improve the partnershipand to create custom-made solutions totheir respective needs. For example, in July2001, The Home Depot and KaBOOM!designed a project that would help celebratethe first Home Depot store opening in theDistrict of Columbia, while addressing aserious playground deficit in the Anacostianeighborhood where this store’s customersand employees lived and worked. TheHome Depot committed activation feesfrom its NASCAR sponsorship to under-write a racing-themed playground that wasbuilt by hundreds of community and TeamDepot volunteers. NASCAR legend Tony

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Stewart and team owner Joe Gibbs joinedHome Depot CEO Robert Nardelli on theplayground site, mixing cement, raising rac-ing flags, and helping to secure media cov-erage on CNN Headline News, in USAToday, the Washington Post, and more.Members of Congress and local elected offi-cials also took part in a “board-cutting”dedication ceremony. For The HomeDepot, the project advanced governmentrelations, delivered substantial media cover-age, leveraged their sports sponsorship, andgave them the opportunity to make a high-impact community improvement workingside by side with its new neighbors. ForKaBOOM!, the high-profile project pro-vided a strong platform for raising aware-ness of the cause through major media, toroll out customized playgrounds, and, mostimportantly, to help a community clear outdumpsters, trash, and concrete, and to cre-ate a safe, fun place for more than 500children to play.

In 2001, The Home Depot andKaBOOM!, along with Outback Steakhouseand Cumulus Media, piloted ProjectPlayground, a national playground-improve-ment program designed to replicate the winsof The Home Depot–KaBOOM! partnershipin mid-sized markets. In 2002, The HomeDepot was so pleased with the results of thepartnership that it decided to extend the reachof the partnership by introducing 75 of itsvendors to KaBOOM! through a playgroundbuild. Jonathan Roseman explained that TheHome Depot welcomed more companiespartnering with KaBOOM! because thatwas the best way to have an impact on thecurrent playground deficit in the United Statesand improve the safety of children’s play.

The CNA Perspective

CNA was a leading global insuranceorganization founded in 1897 to providebusinesses and individuals with a broadrange of insurance products and insurance-related services. The company had morethan 16,500 employees, and in 2001, itgenerated $13.2 billion in revenues, makingit the fourth largest U.S. commercial linesinsurer.

CNA managed its philanthropic activi-ties through the CNA Foundation, whichwas a nonprofit organization with net assetsof more than $25 million and annual givingof around $2 million to support mainly pro-grams that focused on the needs of children.Of these resources, almost one-fifth werechanneled to KaBOOM! in 2000.17

Then CNA chairman and CEO DennisChookaszian said, “The CNA commitmentreflects our dedication to giving somethingback to our communities, giving ourchildren a safe today and a better tomorrowthrough KaBOOM! community-buildingplaygrounds.”18 Through this partnership,CNA had supported 55 playgrounds buildssince 1997.

The way CNA partnered withKaBOOM! was a good example of howmost of the long-term partnerships develop.According to Karen Harrigan, CNAFoundation program officer, they con-tacted KaBOOM! in 1997 because theywere looking for a community-based teambuilding project for the celebration theywere holding in honor of the company’scentennial.

Although the company executives,who represented offices nationwide, were

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initially not particularly enthusiastic aboutgoing anywhere at 6:00 A.M., 700 CNAemployees arrived at the selected site: theBryn Mawr School in Chicago’s SouthShore neighborhood. With so many volun-teers, the employees built two playgrounds,painted fences, painted a map of the UnitedStates on the ground, and even ripped upmoldy carpeting inside the school.

At the end of the day, the feelingwas “so positive and energizing,” saidHarrigan, “that the officers all wanted aproject for their cities.” Having tappedinto the resources of a nationwide execu-tive workforce, KaBOOM! had created ahuge network of CNA resources, volun-teers, and organizers who pledged to build25 playgrounds nationwide and 25 morein Chicago, where CNA was headquar-tered. According to Harrigan, KaBOOM!provided CNA with “a solid, reliablemechanism for employees who havebeen asking for ways to volunteer; decen-tralization of their philanthropic efforts;excellent team-building opportunities;extension of client, business partner, andvendor relationships; and enormous mediaopportunities.”

For KaBOOM!, support from CNAhas provided direct benefit to its mission—more playgrounds exist because of CNA’sinvolvement—as well as more capabilitiesfor the organization. CNA provided theoffice space and furnishings for theKaBOOM! Chicago operation. It also hadunderwritten the production of its educa-tional brochure for community leaders, theGetting Started Kit, and its brochureto encourage corporate “team-building”projects, and had sent dozens of CNA

employees to the annual KaBOOM!Playground Institute, a training conferenceon community-build playgrounds.

Target Corporation

A mass merchandiser with nearly 1,000stores and 214,000 employees, TargetCorporation had grown a four-yearpartnership with KaBOOM! In 1999,Target invited KaBOOM! to participatein their “A Million Hearts” cause-relatedmarketing campaign. During the week ofValentine’s Day, KaBOOM! rallied support-ers across the country to cast ballots in sup-port of community playgrounds in Targetstores, resulting in a donation to KaBOOM!of nearly $137,000. Target Corporation builttheir first 17 playgrounds with KaBOOM!later that year, in a one-week, cross-countryblitz involving thousands of employee volun-teers—from their Minneapolis headquartersto their local sales floors.

In 2000 and 2001, Target and KaBOOM!rolled out the third phase of the partnership:Operation Playground. This nationwidemarathon day of service was designed to cre-ate safe, clean parks and playgrounds forkids. About 25,000 volunteers from Targetstores, Mervyn’s, and Marshall Field’s storesrebuilt or improved more than 1,400 play-grounds in 80 cities and towns.

Ben & Jerry’s Homemade, Inc.

A Unilever subsidiary that manufac-tures ice cream, Ben & Jerry’s gives 7.5%of its pretax earnings to philanthropiccauses. Since 1998, Ben & Jerry’s had

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built nine playgrounds with KaBOOM!—both in conjunction with its retail part-ners (Jewel-Osco, Kroger, QFC, and7-Eleven) and its franchise operators. Ben& Jerry’s also launched an ice cream fla-vor in 2001 called KaBerry KaBOOM!,which was sold in pints nationally andcarried in its Scoop Shops. Proceeds fromthe KaBerry KaBOOM! ice cream bene-fited specific playgrounds, as well asgeneral operations.

The David and Lucile Packard Foundation

With assets of approximately $6.2 bil-lion as of December 31, 2001, and totalgrant awards of $454 million in 2001, thefoundation had been a KaBOOM! partnersince 2001. The foundation had awardedfunding to KaBOOM! for its coordinationof a major educational program, the ChildCare Playground Safety Initiative, whichwould work with more than 1,000 child-care centers in northern California towardthe construction of 169 new playgroundsby December 2003.

THE FUTURE

Hammond and the KaBOOM! boardneeded to weigh carefully the proposedstrategic shift toward replication via com-munity playground builds and toward anaggressive advocacy role. They recognizedthat part of marketing its new partnershipopportunities would require defining newvalue propositions for funding partners.

Promoting community builds and advocacywere far different undertakings from thedirect playground builds. Even the plannedskateboard parks could be seen as different.How could KaBOOM! best package spon-sorships of these new initiatives so that theywould have comparable appeal and busi-ness results for current and future fundingpartners? How would KaBOOM! measurethe impact of its newer initiatives towardensuring that they support, rather thandilute, its mission? Should the organizationseek government funding? If KaBOOM!hoped to reach large numbers of consumerswith its advocacy and community-buildprograms, how could it afford the expenseof mass communication? Furthermore,how might the organization’s new directionaffect its position among for-profit andnonprofit entrants into the community-build playground field? Finally, how woulda staff team structured and trained primar-ily to sell and lead top-notch communityplayground projects best prepare to fund-raise for and implement education andadvocacy initiatives?

NOTES

a. Darell’s work on behalf of KaBOOM!had been featured in several books, includingBuilt from Scratch, by Bernie Marcus and ArthurBlank, and Common Interest, Common Good,

by Shirley Sagawa and Eli Segal. He was work-ing on his first book about his life’s experiences,from traveling with Hillary Rodham Clinton toexamine playgrounds in Northern Ireland tomaking it onto Crain’s list of 40 top business

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leaders under age 40. In 2001, KaBOOM!received the Chairman’s Commendation from theU.S. Consumer Product Safety Commission, onlythe sixth such award presented since 1996, for itswork in playground safety. In 2000, the Peter F.Drucker Foundation honored the organization’sannual training conference, the KaBOOM!Playground Institute, with a special innovationaward. In 1999, Darell was one of five nationalwinners of the “Making a Difference” Award byDiet Coke and was profiled in People magazineand the Wall Street Journal.

1. Hillary Rodham Clinton, Belfast,Northern Ireland, September 3, 1998. (2002,March 6). Viewed at: <http://clinton5.nara.gov/textonly/WH/EOP/First_Lady/html/generalspeeches/1998/19980903.html>.

2. DeBord, K., & Amann, N. (2002,March 18). Benefits of play in children: Age

specific interventions. Viewed at: http://www.ces.ncsu.edu/depts/fcs/humandev/disas4.html.

3. Wang, G., & Dietz, W. (2002).Economic burden of obesity in youths aged 6 to17 years: 1979–1999. Pediatrics, 109(e81).Viewed at: <http://www.pediatrics.org>.

4. Mayors to build west side playgroundin Chicago for the U.S. conference of mayors.(1998, April 23). PR Newswire.

5. A fifth national survey of playgrounds.

U.S. Public Interest Research Group. (2002,March 16). The Consumer Federation of

America. Viewed at: <http://www.pirg.org/reports/consumer/playground2000/playgroundreport2000.PDF>.

6. US scary playgrounds. (2000, October18). Associated Press Newswires.

7. Waltzman, M. L., et al. (1999).Monkeybar injuries: Complications of play.Pediatrics, 103(e58). Viewed at: <http://www.pediatrics.org>.

8. A fifth national survey of playgrounds.

9. Wanna know why playgrounds are so

important? (2002, April 30). KaBOOM!Viewed at: <http://www.kaboom.org/display_item.asp?item_id=32>.

11. KaBOOM! (2002, February 25).Viewed at: <http://www.kaboom.org/ about.asp>.

12. Learning Structures. (2002, April 29).Viewed at: <http://www.learningstructures .com>.

13. Leathers & Associates. (2002, April29). Viewed at: <http://www.leathersassociates.com/index.html>.

14. Jack Morton. (2002, April 29).Viewed at: <http://www.jackmorton.com>.

15. Boundless Playgrounds. (2002, May20). Viewed at: <http://www.boundlessplaygrounds.org/home/home.html>.

16. Darell Hammond, as quoted by TheUrban Parks Institute. (2002, April 21). Viewedat:<http://pps.org/topics/funding/fundstrat/kaboom>.

17. Company overview. The HomeDepot. (2002, April 30). Viewed at: <http://www.homedepot.com>.

18. Form 990-PF, 2000, CNAFoundation. (2002, April 30). Viewed at:<http://www.guidestar.com>.

19. Dennis Chookaszian, quoted byKaBOOM! (2002, April 29). Viewed at: <http://www.kaboom.org/display_item.asp?item_id=17>.

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