By: Steve Zimmerman
The first step in preparing a Matrix Map is to define your organization’s business lines – and while it may not take long to complete, it can either make or break your end result. We define a business line as any activity that takes a significant amount of effort in your organization. Effort could show up in many ways – through staff time and payroll, high volunteer labor or other direct expenses.
Business lines most often reflect an organization’s programmatic and fundraising activities. For example, on the program side a youth development organization might have tutoring, outreach, outdoor activities and sporting activities as its programmatic business lines and individual fundraising, special events and unrestricted foundation gifts as development business lines.
In determining your fundraising business lines organizations typically only use business lines that generate unrestricted revenue. Restricted revenue is allocated directly to the programmatic business line for determining profitability. For example, if an organization has a government contract that pays for a nutrition education program, that revenue will be used to offset the expenses associated with the nutrition education business line and “government contracts” will not be its own business line.
Lastly, sometimes organizations are looking at strategic questions that involve geography or offices. In these cases, it may make more sense to divide your business line by location. For example, we were working with an organization that had offices in Wyoming and Colorado. As they developed their Matrix Map the strategic question was “Can we afford to keep all these offices and, if not, where do we look to trim?” Therefore, the business lines were split by location. You may come up with other configurations for your business lines as well depending on your strategic question. There is no “right” or “wrong” answer for a business line.