Dual bottom line analysis

This tool explores all the organisation’s activities (not just services or campaigns) to assess the extent to which each contributes to the ‘dual bottom line’ - (value and surplus). It allows you to compare the relative merits of each.

The dual bottom line analysis will help make sure you have:

1. a relevant and impactful set of activities
2. sufficient funds to meet the needs and activities of the organisation over the medium to longer term.

It also helps you to understand all your organisation’s work and who you do this work for.

This tool recognises the reality that many organisations face. Income generation activities often compensate for services or campaigns that make a loss but have an impact. However, it’s important to have a set of activities which, taken together, are financially sustainable.

This tool helps you to explore your whole set of activities to see how they exist in relation to each other. It also helps you to consider the extent to which each activity contributes to the impact you seek to have and the income you need to make to afford your activities and invest in the future.

This tool is useful when you want to take a fresh look at all of the activities of your organisation.

This could be because you want to start something new and need to understand what you can stop doing to make time and free up funds for a new activity. Or because you need to cut back your activities because your income is falling.

1. List all your organisation’s activities. Examples may include:

• services
• campaigns
• income generation approaches
• research projects
• programmes of policy development
• communications tools or initiatives.

2. Plot these activities on the matrix below according to the extent to which each has value and generates income. You could draw a ‘bubble’ that represents each one’s relative size.

Decide how you want to define ‘value’ when using this tool. There are many ways in which an activity can create value. For example you could consider:

• How closely the activity fits with your mission
• User value - provides direct value to our service users in response to a clear and understood need
• Social value - creates value for society and contributes to achieving our wider vision
• The quality of the work
• The scale of impact - how many people it creates a positive change for
• The depth of impact - how significant the positive change created is
• What other organisations are doing - is it filling an important gap, or is it duplicating what others are doing?

When thinking about surplus or loss, consider:

• a surplus (revenue minus costs)
• the direct income and costs attached to the activity
• a sensible way of allocating your ‘core’ or ‘overhead’ costs - do some activities draw more on these than others?
• the indirect income that the activity makes possible.

Some activities are hard to quantify in terms of impact and surplus, but the conversation and improved understanding often make it worthwhile trying.

If your income and expenditure are low and most activities are carried out by volunteers, you can instead consider the time you spend on different activities.

3. Look at how you’ve plotted activities and challenge each one as you develop your strategy. Think about whether you should

• stop
• continue
• change
• reduce.