“Balanced scorecard approach to measuring the performance of a non-profit organization: Case study on a Waqf-based Pesantren in Indonesia”

This study explores how the Balanced Scorecard is useful to investigate its application in non-profit organizations, particularly in Waqf-based Pesantrens. The Balanced Scorecard considers four aspects: financial, customer, internal business, and growth and learning. The financial perspective relied on the institution’s annual report, while customer perspectives were collected via a questionnaire distributed among 100 individuals who regularly contribute to the charitable organization. Data used to evaluate learning performance, growth, and internal business came from Pesantren directors and managers through stakeholder interviews. The results demonstrate that, among these aspects, the customer perspective holds the most significance for non-profit organizations such as Waqf-based Pesantren institutions, receiving the highest score of 43. Next comes the financial aspect with a score of 21.86, while growth and learning and internal business share a score of 20 each. This emphasizes the crucial role of prioritizing the needs of customers in the strategic planning of non-profit organizations, specifically in Waqf-based Pesantren institutions. The results contribute insights for these organizations to enhance their strategic management practices by emphasizing the importance of the customer perspective in their decision-making processes.


INTRODUCTION
Pesantrens, historically viewed as traditional and backward educational institutions in Indonesia (Mangunjaya & McKay, 2012), have evolved into significant contributors to the Indonesian economy.These institutions, characterized by progressive and clientelistic relationships led by charismatic figures known as Kyai, play a vital role not only in education but also in societal wealth creation through entrepreneurship, cooperatives, and productive waqf for sustainable development (Huda & Santoso, 2022;Wulandari & Subriadi, 2023).This approach helps balance worldly and afterlife needs (Murdayanti & Puruwita, 2018).Originally, Pesantren focused solely on Islamic education through classical texts (A'ad, 1996; Taufik & Ernawati, 2021), evolving to integrate modern technology and economic activities alongside traditional religious teachings (Huda et al., 2023).Pesantren also play a role in zakat collection and redistribution, contributing to their communities' welfare (Winarsih et al., 2019).
The need for performance measurement in organizations, including non-profit ones like Pesantren, is crucial for evaluating the achievement of set targets.Initially developed for profit organizations, the Balanced Scorecard (BSC) has expanded its application to non-profit entities, including Pesantren.This tool is essential for assessing whether Pesantrens meet their objectives, integrating financial and nonfinancial metrics to provide a comprehensive overview of performance (Kaplan & Norton, 1992).Thus, adopting the BSC in Pesantren allows for a structured evaluation of their contributions to both education and the broader economy, ensuring they meet their developmental goals.

LITERATURE REVIEW
Pesantrens, traditional Islamic educational institutions in Indonesia, play a significant role in local economic development through integrated supply chain strategies, engaging in diverse business ventures such as mini markets, culinary enterprises, boarding services, and agriculture, among others.In the past decade, over 200 research papers have delved into the economic impact of Pesantrens, highlighting their contribution to the economy (As-Salafiyah & Slamet Rusydiana, 2022; Misbahrudin, 2019; Muhardi et al., 2022).Central to Pesantren's economic framework is Waqf, a sustainable charity practice that, despite its underutilization in Indonesia's broader economic development due to traditional perceptions and complex issues, remains crucial (Mukhlis & Sari, 2017; Kusuma & Sulchan, 2021; Huda & Santoso, 2022).The 2004 Waqf Law underscores the social and religious roles of Waqf, supported by Sharia financial mechanisms like the Micro Waqf Bank (BWM), which facilitates capital access for small community businesses, thereby enhancing Pesantren community empowerment (Siregar, 2016;Zarkasyi, 2020;Disemadi & Roisah, 2019;Hasibuan et al., 2021).This empowerment process is further influenced by the leadership and role modeling of Kyai, reflecting Islamic economic principles that balance individualism with societal welfare, offering a contrast to both capitalist and communist ideologies (Soemitra & Rahma, 2022;Marpaung, 2020;Nadzir, 2015).
Moreover, empowerment itself is a process aimed at enhancing the ability of both individuals and groups to make decisions and act independently in overcoming the challenges they face.Achievable through various means, such as providing access to necessary resources, offering training and education, and offering support and motivation, empowerment plays a critical role in societal development (Stiyaningsih & Wicaksono, 2017).Additionally, community economic empowerment seeks to strengthen and add value to the community's economy, enabling people to increase their income and improve their living standards (Yayuli et al., 2021).
Expanding on these efforts, the economics of Pesantren emerge as particularly noteworthy.This field relates to the economic activities conducted by Pesantren, encompassing business development, community empowerment, and entrepreneurship education.Pesantrens occupy a pivotal position in the economic development of communities, making substantial contributions to poverty reduction, especially in rural areas (Rahayu, 2020).This significance stems from Pesantren's resilience as an economic instrument, adept at adapting to various conditions.Their adaptability is evidenced by the yearly increase in the inclusion index within Pesantren's internal and external environments (Subhi Apriantoro & Herviana, 2023), underscoring their strategic role in fostering economic growth and sustainability and illustrating a comprehensive approach to community empowerment and economic Satori et al. (2021) discovered that implementing an agribusiness-based Pesantren by PPAI Al Ittifaq Ciwidey, grounded in agribusiness entrepreneurship, utilizes a budget planning formula based on SWOT analysis.This approach facilitates funding to cover expenses for underprivileged students, teacher salaries, professional development, and infrastructure improvements.Interestingly, the Pesantren have initiated cooperatives, notably in agribusiness, achieving impressive turnovers of 300-400 million per month.Although this study meticulously details the implementation and its impact on the Pesantren and the community through cooperative management, it falls short in quantifying the enhancement of the surrounding community's welfare.Notably, while the core subject aligns with this research, the differentiation lies in quantifying the societal impact.
Transitioning to a broader management perspective, the Balanced Scorecard (BSC) concept, developed initially by Kaplan and Norton in the early 1990s, offers a comprehensive tool for measuring company performance.Kaplan and Norton's (1992) investigation into 12 companies unveiled the necessity for managers to have a tool that encapsulates both financial and non-financial metrics to observe business development more holistically and swiftly (Bhatiasevi & Naglis, 2020).The BSC stands out by evaluating both quantitative and qualitative aspects, enabling the determination of financial and management strategies effectively (Kocakülâh & Austill, 2007;Lea, 2011).
Furthermore, the BSC underlines four critical aspects in strategic plan structuring, expanding beyond mere financial perspectives to include customer perspectives, internal business operations, and learning and growth opportunities (Alles & Gupta, 2002;Lin et al., 2013).This selection of indicators and objectives mirrors the organization's strategic vision and facilitates the evaluation of their implementation.Although primarily utilized in business entities for balancing financial and non-financial components, the BSC's application extends distinctively to non-profit organizations, showcasing its versatility as a performance assessment tool beyond conventional business settings (Tavana et al., 2015).
These discussions illustrate a multifaceted approach to economic empowerment and organizational performance assessment, linking Pesantren's localized economic initiatives with broader management strategies like the BSC.This connection underscores the potential for adopting comprehensive management tools within nonprofit and educational contexts to achieve broader economic and societal impacts.

METHODS
This study utilized a Waqf-based Pesantren called Darul Falah Cimenteng as the object of research.Some considerations of the research object are as follows: (1) This Pesantren represents a type of a Waqf-based Pesantren that exists in Indonesia; (2) Not only as a passive recipient, they also conduct business ventures so that the waqf donations received can be managed to help support the needs of the Pesantren; (3) There is a semi-independent Pesantren model that seeks to reduce costs for its students.
This study adopts a mixed-methods approach, combining both qualitative and quantitative methodologies.The quantitative-qualitative method, as outlined by Doyle et al. (2020), seeks to gather data numerically and conclude with comprehensive descriptions, offering a robust field of certainty.In the quantitative part, data in this study were systematically organized and derived from responses to questionnaires distributed among respondents.The selection of respondents employed a non-probability sampling technique, specifically snowball sampling (Owusu, 2017), targeting 100 respondents associated with home business units within the Pesantren.Additional data concerning the performance perspective was gleaned from annual reports, enriching the research's depth and breadth (Febriandika et al., 2023).
Meanwhile, interviews with institutional managers and supervisors are conducted as part of the qualitative method, as per the methodology suggested by Bowling (2005).The in-depth interview is conducted with Mr. K as a director and Mr. AH as a manager of a charity organization under Pesantren management, which is called by Dafa Peduli.In addition, to support the interview, additional data were extracted from a range of sources, including newspaper reports and websites, formatted descriptively to enrich the analysis (Bowen, 2009; Windiastuti & Athief, 2019).
To ensure the legitimacy and reliability of the gathered information, validity and reliability tests were conducted.An indicator's validity was established through its ability to demonstrate a significant relationship with outcomes, utilizing a Pearson product-moment correlation with a critical significance value of approximately 50% (Šoltés & Gavurová, 2013).Reliability was assessed using Cronbach's alpha statistical test, deeming a variable reliable if it achieved Cronbach's alpha > 0.60 (Ćwiklicki, 2016).
Lastly, the analysis of technical data through the Balanced Scorecard framework was executed in stages, evaluating the institution from four perspectives: financial, customer, internal business processes, and innovation and learning (Suttipun & Arwae, 2020).This comprehensive evaluation aligns with the mixed-methods research design, integrating quantitative and qualitative data to present a holistic view of Pesantren's operational and financial independence.
Table 1 shows the foremost critical execution markers from the four angles of the Adjusted Scorecard.
To determine if a company's approach, execution, or utilization improves trade execution, monetary execution measurements provide data.Financial reports are, therefore, the end product of accounting preparation, which is essential in assessing the implementation of budgetary execution procedures (Makki et al., 2023).This article calculates money-related prospects through two key targets: (1) collection of zakat, infaq, sadaqah, and waqf stores (ZISWAF), and (2) benefit and generation of Pesantren commerce units.Monetary proportions are numbers obtained from combining a component in a money-related report with other components that have a pertinent and vital relationship.This proportion portrays the aggregation year after year by examining the organization's net benefit edge in each year's budgetary articulations.
Overall, the research methodology of this study is in line with that of Febriandika et al. (2023).Equation ( 1) illustrates the growth in accumulation: ZISWAF Collection Growth: Productivity may be a degree of the input-to-output proportion, comparing arranged input utilization with real input utilization.In this way, the higher the effectiveness, the more noteworthy the benefits (Kang & Song, 2020).According to nonprofit groups like Indonesia's Islamic charities, it is customary for Islamic charities to provide 10% of operational costs.In this way, the criteria for conveying zakat reserves disseminated by ZISWAF distributions is considered successful if there is a probability that the esteem comes to nearly 90%.The taking after is a viable way to convey ZISWAF distributions: ( ) ( ) The client point of view may be a viewpoint that permits companies to alter client satisfaction, loyalty, maintenance, and productivity to clients within the target showcase portion (Mukhlis & Sari, 2017).In this inquiry, clients are the parties who pay ZISWAF in any shape.In this manner,

Final Costumer Index value
IKactual IK  = ⋅   (7) In this study, the four fulfillment categories were separated into four bunches: 4 points «exceptionally fulfilled» and 1 point «exceptionally disappointed».Subsequently, the Ek max score is 4 and Ek min is 1.The study included 14 questions, and 100 respondents were utilized in this overview.
Internal business innovation measures all exercises carried out by the company to form items that empower customer satisfaction and/or item advancement (Funna & Suazhari, 2019).Hence, it centers on what the advancement has accomplished concerning its objectives.Formula (8) measures execution from the point of view of internal business innovation.

Internal Business Innovation Innovation realization in t Targeted innovation in one year
The organizational learning and advancement handle comprises three components: individuals, frameworks, and structural models (Bastiar & Bahri, 2019).This framework evaluates an organization's ability to retain employees over extended periods by calculating the ratio of employees who leave the company against the total workforce.Formula (9) measures execution concerning worker maintenance. 100%.

Employees who resign Number of employees
Further skills and knowledge can be seen by representing staff in training, workshops, or seminars held outside the Pesantren.The results show that during the research period, the Pesantren sent three employees to take part in training, exercises, and events.Based on these data, the relationship between human skills and knowledge using the formula could be calculated (formula 10).
100%.(10) The BSC score for the last stage is easily determined using the following formula:

RESULTS
Determining the final value of performance measures and their respective weights, which add up to 100%, was a critical decision made at the Pesantren, informed by interviews with the director of «Dafa Peduli,» a charity organization of Pesantren.Table 2 shows that the customer perspective is assigned the greatest importance, carrying a weighted value of 50%.This emphasizes the Pesantren's regard for Muzakki and Muwaqif as the primary recipients of ZISWAF contributions, underlining the significance of fostering a robust relationship between the Pesantren and these stakeholders.Following this, from a financial standpoint, the Pesantren allocates 30% of its weight to ZISWAF fundraising, dividing this further into 18% for the collection of ZISWAF funds and 12% for the effective distribution of these funds.This balanced approach reflects the Pesantren's dual focus on both the accumulation and dissemination of funds, primarily through the involvement of the student's parents, with the goal of enhancing housing infrastructure and management while also increasing the distribution of benefits annually.
In third place, the learning and growth perspective is allocated a percentage of 10%, emphasizing the vital role of staff contributions in supporting the Pesantren's programs.This perspective focuses on two strategic goals: employee retention and the development of their professional skills and knowledge.Similarly, the internal business perspective is also assigned a weight of 10%, emphasizing innovation through developing existing projects and introducing new ones in response to current social conditions and trends.tions and survey results exceed the minimum limit so that it is declared valid and reliable.Furthermore, the survey results are calculated using formulas (3) to (7) to determine the actual consumer index value.The calculation results are as follows:

Based on
14 100 4 5.600.The study's customer satisfaction index yields a 4,799 customer satisfaction score.Thus, customers are rather happy with Pesantren's services in managing ZISWAF.After that, the final 4799 number is divided by 5600 to get 86 actual value (table 7).After knowing the actual value of the consumer index of 86, the customer perspective BSC score can be calculated as follows: (86/100) x 50 = 43.
Furthermore, examining Tables 8 and 9 highlights the Pesantren's strategic success in innovation, achieving a remarkable 100% in certain areas.This achievement underscores the Pesantren's commitment to innovation and ensuring the security of waqf assets entrusted to them.Despite the challenges in generating income from infaq and sadaqah, the persistent efforts in fund-raising activities reflect a continued enthusiasm to encourage community contributions, emphasizing the future benefits of infaq and sadaqah.
Additionally, the construction of waqf buildings for students' learning signifies the Pesantren's dedication to fulfilling the trust of the wakif, providing valuable facilities for education and sports.This commitment also extends to supporting as-naf who are entitled to a portion of the ZISWAF, as demonstrated by various forms of assistance to the poor and underprivileged, showcasing the Pesantren's concern for the community's welfare and fulfilling its mandate.
Moreover, the Pesantren's contribution to the community is further exemplified by establishing a Qur'an Study Village, emphasizing the right of regional preachers to steadfastly continue religious practices.Scholarship programs for community cadres, who are in various institutions across Indonesia to gain knowledge and later serve the community, underscore the Pesantren's investment in human capital development.

Summary of Innovation Implemented Quantity
Targeted innovation 5 Innovations

Quantity of innovation 5 Innovations
Percentage of innovations implemented 100% Tables 10 and 11, based on interviews with the manager of the charity organization under Pesantren, illustrate the steady operation without any significant changes during the research period.This stability highlights the Pesantren's resilience and continuous commitment to service.The increased competence of Pesantren employees, evidenced by their participation in training, internships, and seminars, reflects a proactive approach to professional development and enhancing the institution's capabilities.
As highlighted in Table 11, the enhancement in employee quality and competency at the Pesantren is evaluated as excellent, achieving a remarkable rate of 100%.Additionally, Table 12 further substantiates this positive outcome, showing that both employee retention and competency improvement have reached a completion rate of 100%, meeting the established target with a significant weight of 10.This indicates a highly effective strategy in human resource management within the Pesantren, emphasizing the value placed on staff development and satisfaction.
Upon aggregating the BSC scores from each perspective, the subsequent step involves documenting the cumulative BSC score, as delineated in Table 13.This table unveils the comprehensive Balanced Scorecard evaluation across the financial, customer, internal business process, and employee growth and development perspectives, culminating in an aggregate score of 84,86 out of 100.Moreover, an analysis of the four perspectives in Table 14 reveals that the customer perspective is the paramount aspect, scoring the highest value.This underscores the Pesantren's capability to foster service excellence and trust among donors, particularly in the stewardship of assets entrusted in the form of ZISWAF.This aspect notably sets Pesantren apart from other studies that prioritize the financial perspective in applying the Balanced Scorecard.
Although the financial perspective still holds significant importance, ranking second, its success is intricately linked to the institution's rapport and the trust placed by customers in the Pesantren's management.The array of beneficial programs offered by Pesantren Darul Falah Cimenteng, which are directly felt by the community, further cements this trust and satisfaction among its stakeholders.

DISCUSSION
The Balanced Scorecard was first introduced by Kaplan and Norton in 1992 to assist companies in measuring performance (Kaplan & Norton, 1992).It has been widely applied in various sectors, such as Islamic banking (Qushtom, 2020), Islamic microfinance (Masyita, 2017), Islamic hospitals (Agustina, 2019), and Islamic philanthropy (Febriandika et al., 2023).However, only one has applied the Balanced Scorecard in Islamic schools (Machmuddah et al., 2017).
Overall, the results of the Balanced Scorecard indicate positive performance of waqf-based Pesantren institutions, which are non-profit organizations.A score of 84.86 out of 100 falls within the good category.This is consistent with the study by Rompho (2020), which found the Balanced Scorecard to be an effective tool for measuring the performance of both profit and non-profit organizations worldwide.In this study, the consumer perspective becomes the most important perspective, followed by financial, internal business, and learning and growth perspectives.
The BSC score for the consumer perspective is the result of the customer satisfaction index within the range of 4,550-5,600, which falls into  Using the Balanced Scorecard (BSC) in the context of waqf-based Pesantren demonstrates several significant advantages in measuring performance and directing strategies.One of the main advantages is the ability of the BSC to integrate various performance perspectives, including financial and non-financial perspectives, which are crucial in a non-profit environment like Pesantren.However, in interpreting BSC results, it is important to remember that the selected performance measures should be relevant to the mission and goals of the Pesantren.
The main challenge in using BSC in this context is measuring non-financial aspects, such as stakeholder satisfaction and social impact, which are often difficult to quantify.This requires a more creative and holistic approach to designing appropriate performance indicators.Additionally, there are challenges in managing stakeholder expectations regarding BSC results and ensuring that the data collected and analyzed truly reflect Pesantren's overall performance.
To address these challenges, Pesantren management must actively engage in the design and implementation process of BSC.This will allow them to identify the most relevant performance indicators for organizational goals and formulate appropriate strategies.Furthermore, this participatory approach can also enhance stakeholders' understanding and support for using BSC as a management tool.
The context of waqf-based Pesantren has unique characteristics that affect the use and interpretation of the Balanced Scorecard (BSC).As educational and social institutions based on religion, Pesantrens have broader goals than just financial achievements.Therefore, in designing BSC for Pesantrens, it is important to consider non-financial aspects such as success in educating students, contributions to community development, and the preservation of religious values.
Additionally, waqf-based Pesantrens often rely on support from the community and donations from external parties to carry out their activities.Therefore, performance indicators related to fundraising and the use of donations such as Zakat, waqf, infaq, and sedekah are crucial in measuring the BSC for waqf-based Pesantrens and for other non-profit organizations based on donations.In the future, efforts to generate income without depending on donations must be made seriously to make Pesantren institutions self-sufficient.

CONCLUSION
This study delved into applying the Balanced Scorecard (BSC) within the unique context of the waqf-based Pesantren, shedding light on its utility in assessing and enhancing the performance of non-profit organizations.The findings underscore the significance of the customer perspective as paramount in strategic planning, emphasizing the importance of meeting the needs and expectations of stakeholders in such institutions.
The positive performance indicated by the BSC scores, particularly in customer satisfaction, financial management, internal business processes, and learning and growth initiatives, reaffirms the efficacy of the BSC framework in gauging performance across diverse sectors, including non-profit entities like Pesantren.The demonstrated effectiveness of Pesantren's internal business innovations and employee development initiatives further underscores the holistic approach required for sustainable organizational growth.However, challenges persist, particularly in measuring non-financial aspects and managing stakeholder expectations.Addressing these challenges necessitates a collaborative approach involving Pesantren management and stakeholders, ensuring alignment between performance indicators and organizational goals and fostering transparency in reporting and analysis.
Moving forward, adopting the BSC in Pesantren and similar non-profit organizations should be accompanied by efforts to diversify income streams and reduce dependence on external donations, thereby enhancing financial sustainability and organizational resilience.In essence, this study contributes to the growing body of knowledge on strategic management practices in non-profit organizations, offering insights into the application of the BSC framework within the unique context of a waqf-based Pesantren.As these institutions continue to play a vital role in community development and education, leveraging tools like the BSC can facilitate informed decision-making and drive continuous improvement, ultimately advancing their mission of service and social impact.

Final
BSC Score Weight W Realization of every perspective R Total targeted each perspective T

Table 3
, the results of donation collection in the form of zakat, infaq and waqaf have increased.2019 was the year with the highest increase of 39%.But then the COVID-19 outbreak occurred, which reduced the collection of zakat.

Table 8 .
Targeted and realization innovation

Table 6 .
Validity and reliability test

Table 9 .
Percentage of Pesantren innovation

Table 10 .
Internal business perspective

Table 11 .
Retention of employees

Table 12 .
BSC score learning and growth

Table 13 .
Total score balanced scorecard

Table 14 .
Balanced scorecard rank

Table 15 .
Standards for evaluating performance