By: Steve Zimmerman
It’s easy to embrace the concept of the Dual Bottom Line, but harder to apply it in a real-world board setting. For example, board members — and many staff — are seldom familiar with all of the programs and activities of the organization. While there may be a strong sense that “all our programs are great,” there may not have been any discussion about which programs are, in fact, those with the greatest or most important impacts. Even people with financial expertise may feel uncertain about how to make decisions that are more nuanced than “stick to the budget and at least break even.”
Board meetings unintentionally support this kind of fragmentation. They take each subject on its own: first the financial report, then the program report, and then the fundraising report. The Matrix Map aims to change that.
The Matrix Map is a visual tool that plots all of the organization’s activities — not just its programs — into a single, compelling image. By illustrating the organization’s business model — through a picture of all activities and the financial and mission impact of each one — it supports genuinely strategic discussions.
Below is an example of a Matrix Map for a community center. Each circle represents a program. You can see that circles higher on the map have higher impact than those lower on the map. You can see the relative size of each activity, and which ones make money, which break even, and which require subsidy from the organization’s unrestricted funds.
The resulting image often provides an “Aha!” moment for board members. After years of hearing about seemingly unrelated programs, they can now understand how they all work together to support the impact and viability of the organization they care about.
How to Make a Matrix Map of Your Organization
To create a Matrix Map there are four steps:
- Identify your “lines of business” or activities
- Assess relative mission impact
- Determine profitability and
- Map the results!
Here is a more thorough explanation of each step:
1. Identify your programs — all of them: A program is a mission-specific or fund development activity in your organization that requires effort. Counseling, dance performances, citizenship classes, and forest restoration are all programs. A fundraising phone-a-thon is a line of business, as is a special event or major donor solicitation.
2. Assess relative mission impact: In many nonprofits, there’s an implicit assumption that all programs are effective and important — and that’s typically true. But everyone also realizes — yet seldom says — that some programs have higher impact than others. We may not discuss impact levels in order not to sound as if we are criticizing a worthwhile program (or its director), but it’s precisely these judgments — about which programs have the highest impact – that the management team and the board should discuss as strategic choices are made.
Each organization will have different criteria for impact — after all, impact is defined by each nonprofit differently. And remember, this is an informed self-assessment, not an evaluation. We suggest a survey or discussion with the management team and the board that asks individuals or the group to rate each program on a scale of 1 to 4 using four criteria. Organizations can identify their own criteria for impact; here are a few we’ve found useful:
- Contribution to intended impact: Relative to other programs, how well does this program contribute to what the overall organization aims to accomplish? Some programs may be excellent, but not as central to our mission.
- Excellence in execution: Is this program something that the organization delivers in an exceptional manner? Organizations are simply better at delivering some activities than others. A program may be important to our mission, but we may not have the right skills or financial resources to implement it with excellence. This is a nice way of separating planning from execution.
- Scale: How many people are touched or influenced by this program?
- Depth: How profound is the level of intervention with this program?
- Community building: Does this program build community around the program or the organization as a whole?
- Significant unmet need: Is there significant competition or are there similar offerings of this program? Is there an adequate supply of services to meet the demand for them in our community?
- Leverage: Does this program benefit from and nurture important relationships and partnerships inside and outside the organization?
Remember, you only need to choose four or five criteria and you don’t need to use any of these suggestions. After you’ve rated all of the program, take an average of the scores each line receives across the criteria and that will be its mission impact score. For example, if tutoring were to receive the following scores:
- Alignment with Impact: 4
- Excellence in Execution: 3
- Fills an Important Gap: 3
- Building Community or Constituency: 2
The mission impact score would be the average: 3.0.
3. Determine the profitability of each program: Look at how much a program is contributing financially (profit) or how much it needs subsidy from the organization’s unrestricted funds (loss). (Unrestricted revenue should be attributed to the fundraising vehicle that was used to raise it, such as major donors or direct mail.)
4. Map the results: Once these steps are done, you can map each activity on a grid. We put impact on the vertical axis (x axis) and profitability on the horizontal axis (y axis).
Here you see the Excel worksheet:
Then using Excel’s chart function, select “Bubble Chart” to create the Matrix Map seen at the beginning of this article.
More than just a picture, though, the Matrix Map can help engage board members in strategic discussions about how to strengthen the organization’s business model – understanding that the implications of their decisions will affect both impact and finances. And staff can see the whole organization at a glance in a way that focuses attention on activities and impact rather than as an organization chart.