For many nonprofit executives, cutting programs when times are tough for an organization is an unthinkable solution. Programs can seem intimately tied to your identity, but when it comes maximizing impact, cutting a certain program may be the best alternative for long-term organizational sustainability. Even when a program is bringing in substantial revenue, the true costs can drain resources from other areas of the organization. Holy Family Institute of Pittsburgh faced this issue and turned to the matrix map to help facilitate a major transition to balance their programs. Glenn Wilson, Chief Strategy and Innovation Officer and COO, found Spectrum Nonprofit Services at a conference recently and shared his organization’s story.
For 115 years, children and families have benefited from the work of Holy Family Institute (HFI). Offering more than 18 wrap-around and educational programs, HFI provides help, healing, hope and support to children and families in western Pennsylvania. Their programs are aligned to help lift people out of, and break the cycle of poverty.
To enable this innovative and impactful work, Glenn Wilson, Chief Strategy and Innovation Officer and COO, keeps his eye on what tools, techniques, and processes are available to support the organization’s delivery methods. Glenn is an avid reader, and came across the matrix map when he picked up Nonprofit Sustainability: Making Strategic Choices for Financial Viability, co-authored by Spectrum principal Steve Zimmerman. He decided to implement the matrix map process to look at budgets and numbers from a different perspective.
“The map allowed me to take a really nice picture and view of the organization. What it really did for me was provide insight into what we should be paying attention to and what I should do next.”
It was because of the matrix map that Glenn was the first to see an inevitable decision point for one of the Holy Family Institute’s residential programs. While most of HFI’s service area lies within Greater Pittsburgh, their St. Mary’s Villa facility was located 15 miles NW of Philadelphia. Founded in 1900 as an orphanage, this facility was eventually turned into a residential care and special education campus for HFI. Even though St. Mary’s was bringing in $9 million in annual revenue, which was roughly a third of HFI’s total budget, it was slowly costing the organization valuable resources due to indirect costs.
When Glenn looked at his map a clear strategic imperative emerged. Like other programs, this facility had some valuable impact in the community, but it required substantial resources in HR, fundraising, and marketing from the organization. HFI needed to look at the facility in the context of the entire organization:
“We would never have been able to move forward on programs that impact our communities far greater because [St. Mary’s] was in Philadelphia, had we tried to retain our program; it would have dragged all of our other programs down.”
The next challenge was getting HFI’s stakeholders to also see the writing on the wall. To do this, Glenn presented the matrix map. The team could quickly see that St. Mary’s Villa and its programs landed in the lower left quadrant, signaling it was losing money and delivering a lower impact relative to other programs. Upon further discussion around the map’s outcomes and St. Mary’s programs, they understood the strategic imperative – the campus would have to either be closed completely or given to another organization.
The executive team decided that while the St. Mary’s programs weren’t working for Holy Family, it might work in another model better situated to manage the property. They eventually found a partner in a Philadelphia-based management group, the Public Health Management Corporation (PHMC). PHMC is a nonprofit public health institute with more resources located in proximity to the Villa who agreed to take on the program. Since the transfer, Holy Family Institute has opened a new academy in Pittsburgh and has built partnerships in the metro-region around workforce development for their youth.
“Had we not closed that program back then, we would never have been where we are today.”
Using the matrix map, Glenn saw his entire organization as being strung along a large fishing net, with services spread along the lines of impact and finance. The net covers each quadrant of the matrix map, and when one program is pulled, every other program in the organization is affected as well. Glenn’s fishing net demonstrates for him how interconnected their programs are, and the implications of decisions that may not be apparent without a visual aid.
For many, it is easy to embrace the concept of the dual bottom line, but harder to apply it in a real-world setting.
Glenn’s experience in engaging in the hard question of the sustainability and impact of a program bringing in almost of a third of the organization’s revenue, and his exploration of what needed to happen next wasn’t an easy process. But, with his strategic vision and understanding of the dual bottom line, Holy Family Institute freed up more resources it could devote to maintaining its relevance, financial stability and deep-rooted impact in the community.
“Giving up that facility was absolutely the best decision we ever made. When people ask me if we’re crazy, I answer: ‘We are strategic’. Sometimes you’ve got to let go of things to move forward on others.”
Glenn continues to use the matrix map today as an analysis and trending tool. He keeps an eye on how each of the programs pulls along the fishing net to continuously assess the relevance of programs in the community.
Details on this process can also be found at www.nonprofitsustainability.org.