Do you know that moment when you have a sense of a concept, but then someone comes along and clarifies it with a spot-on phrase or illustration? You think, “A-ha, if only I had thought of it this way.” Last week, many local nonprofits had that moment while listening to guest speaker Steve Zimmerman, co-author of Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, who shared insights into managing the sustainability of nonprofits.
United Nations’ definition of sustainability: “doing what is required to meet the needs of the present without compromising the ability of future generations to meet their own needs.” In his lecture, Zimmerman proposed that sustainability is an orientation and not a destination, and that every decision nonprofit leaders make should consider the programmatic and financial sustainability of the organization.
In his book, Zimmerman emphasizes the interconnectedness of these two important goals. Financial sustainability is the ability to generate resources to meet the needs of the present without compromising the future, and programmatic sustainability is the ability to develop, mature, and cycle out programs to be responsive to constituencies over time. He explains that an organization can never be permanently sustainable because of future uncertainties; however, nonprofit leaders should always focus on moving their organization in that direction.
Perhaps the greatest “a-ha” moment comes when Zimmerman introduces The Matrix Map, which offers a compelling visual to correlate nonprofit programming and sustainability.
When considering an organization’s business lines, they can be mapped on the matrix to fall in one of four quadrants. Here’s a synopsis of what those quadrants represent:
- Heart – High Mission Impact, Low Profitability
- Star – High Mission Impact, High Profitability
- Money Tree – Low Mission Impact, High Profitability
- Stop Sign – Low Mission Impact, Low Profitability
Sometimes organizations continue an activity because it has always been done or because no decision has been made. “Locating activities in these quadrants will suggest a clear set of decisions that leaders need to make in order to foster the business model’s overall strength” (Bell, Masaoka & Zimmerman, 2010). Boards and staff are challenged to give attention to programs and business lines that are under the radar, and encouraged to introduce and consider alternatives that may move the organization toward greater sustainability.
It is important to identify and address any activity that might fall into the “stop” quadrant. In a best-case scenario, activities in the “stop” category can be carried out by another organization who may have the means to better implement. Organizations should also strive to reach a healthy balance of programs in the other quadrants. Star activities should be invested in and grown and money tree initiatives should be continued while striving to increase their impact. Hearts help focus the mission of the organization, but must be executed in moderation.
Lauren Shephard, Controller at The Community Foundation, noted, “Creating such an easy to understand visual really helped link the financial side of an organization with the programmatic side. The Matrix addresses complex organizational issues in a simplistic way that can convey powerful meaning to board or staff members as they assess short- and long-term strategic objectives.”
To find out more about the Matrix Map or learn about the team behind Nonprofit Sustainability, access their website here: http://www.nonprofitsustainability.org/
Bell, J., Masaoka, J. & Zimmerman, S. (2010). Nonprofit sustainability: making strategic decisions for financial viability. San Francisco, CA: Jossey-Bass.