The Matrix Map Approach Part One: How to Create the Matrix Map

You may have heard of the Dual Bottom Line: the idea that strategic choices must serve both mission impact and financial viability. But how do you turn this idea into a quantitative decision-making tool?

Blue Avocado columnist Steve Zimmerman summarizes the Matrix Map approach in part one of this two-part article adapted from the book he co-wrote with Jeanne Bell and Jan Masaoka: Nonprofit Sustainability: Making Strategic Choices for Financial Viability.

A Matrix Map plots all of an organization’s activities into a single, compelling image.

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 business line. 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 business lines — all of them

A business line is a programmatic or fundraising activity in your organization that requires effort. Counseling, dance performances, citizenship classes, and forest restoration are all business lines. 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 business line 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:

• Alignment with core mission: How closely does this program align with our core goals? Some programs may be excellent, but not as central to our mission.
• Excellence in execution: Organizations are simply better at delivering some activities than others. A business line 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 does each business line affect?
• Depth: How deep an intervention or contact does each business line provide?
• Building community or constituency: How does this business line contribute to building, for example, the environmental movement or the Hillside Neighborhood (not just our organization)?
• Fills an Important Gap (FIG): If a business line were to go away, would your constituents be able to go across the street to another agency or would they have nowhere to go?

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 business lines, 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 business line

Look at how much a business line 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 [business line] that was used to raise it, such as major donors or direct mail.)

	After school tutoring	Sports league	Summer programming	Community Festival	Job placement servies	Individual donations	Community theater	Admin		Total
Revenue	41,488	60,590	56,473	145,258	*	40,750	15,000			359,559
Direct Expense	51,360	49,500	52,890	79,500	17,860	21,052	22,000	36,251		330,413
Shared Costs	5,802	2,800	7,320	9,750	2,560	2,450	1,132	2,123		33,937
Administration	5,608	5,697	6,782	11,331	2,809	3,305	2,842	(38,374)		*
Total Expenses	62,770	7,997	66,992	100,581	23,229	26,807	25,974	*		364,350
Surplus / (Deficit)	($21,282)	$2,593	($10,519)	$44,677	($23,229)	$13,943	($10,974)			($4,791)

4. Map the results

Once these steps are done, you can map each business line 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:

Our Youth Community Organization  Matrix Map Data
Business Lines	Profitability	Mission Impact	Expenses
After school tutoring	($21,282)	3.85	$62,770
Sports league	$2,593	3.25	$57,997
Summer programming	($10,519)	3	$66,992
Community festival	$44,677	2.6	$100,581
Job placement services	($23,229)	2	$23,229
Individeul donations	$13,943	1.5	$26,807
Community theater	($10,974)	1.8	$25,974
	-4,791		364,350

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.

Also see:

• Part two of this Matrix Map discussion, Strategic imperatives for each business line
• Deconstructing “Sustainability”
• Strategic Planning: Failure and Alternatives

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