Has Your Growth Plateaued? Here’s How to Fix It - Nonprofit Mastermind Podcast

Summary

Nonprofit Mastermind Podcast: "Has Your Growth Plateaued? Here’s How to Fix It"

Host: Brooke Richie-Babbage
Release Date: October 1, 2024

Overview

In the episode titled "Has Your Growth Plateaued? Here’s How to Fix It," Brooke Richie-Babbage delves into a prevalent challenge faced by nonprofit organizations: stagnation in growth and impact. Drawing from her extensive 25-year experience as a social justice lawyer, two-time nonprofit founder, and growth strategist, Brooke offers actionable insights and strategies to help nonprofits break free from plateaus and achieve sustainable growth.

Identifying the Plateau

Brooke opens the discussion by empathizing with nonprofit leaders who feel stuck despite having the foundational elements in place. She states:

“[00:00] Brooke Richie Babbage: Raise your hand if you've looked at your budget, team or the impact of your programs and just felt stuck. Like the pieces are there, but somehow you're not growing, you've just plateaued.”

This introduction sets the stage for exploring the underlying causes of stagnation and how to overcome them.

Common Signs of a Growth Plateau

Brooke outlines several indicators that a nonprofit might be experiencing a growth plateau:

Stagnant Budget and Impact: Despite efforts in fundraising, hiring, and capacity building, the organization's budget and impact remain largely unchanged over one or two years.
Incremental Growth: Organizations may achieve minimal growth (e.g., 5-10% annually) but struggle to scale significantly.
Internal Frustrations:
- Feeling Overwhelmed: Leaders feel that expanding operations will disproportionately increase the workload.
- Donor Disconnect: Difficulty in connecting with potential donors who, on paper, should be interested but require more effort to engage.
- Board Engagement: Board members may not effectively contribute to fundraising due to a lack of understanding or alignment with the organization's goals.
- Funding Limitations: Reliance on restricted program funding that hinders the ability to invest in growth.

Brooke emphasizes that these symptoms often stem from a lack of strategic alignment within the organization.

The Root Cause: Lack of Strategic Alignment

Brooke identifies the primary obstacle to growth as a lack of strategic alignment among the organization's core pillars: strategic direction, financial roadmap, and revenue model. She explains:

“[00:00] ...the lack of strategic alignment that they need to drive growth and avoid burnout. That is almost always the first thing that we find and that we work on.”

Without these elements working cohesively, growth remains sluggish or incremental, making it difficult to achieve substantial impact.

Strategic Alignment: The Three Pillars

Brooke breaks down strategic alignment into three essential components, each of which must not only be robust on its own but also interconnect seamlessly with the others.

Strategic Direction
- Definition: Outlines the organization’s impact goals and the strategies to achieve them.
- Implementation: Documented in an annual plan that derives from a long-term strategic plan.
- Quote:
  
  “[00:00] ...your strategic direction, your planned impact, your budget and your fundraising plan are actually talking to one another and how that can be the fuel you need to get to that next level.”
Financial Roadmap
- Definition: Details the true cost of achieving the impact goals.
- Implementation: Utilizes a true cost budget rather than a "what we can do" budget, ensuring financial plans align with strategic objectives.
- Analogy:
  
  “[00:00] ...storybook that you might read to a child. On one page is a picture, right? And on another page are words and they are reflecting the exact same story.”
Revenue Model
- Definition: Outlines how the organization will generate the necessary resources to support its impact goals.
- Implementation: Identifies potential supporters, cultivation strategies, storytelling methods, and fundraising approaches.
- Quote:
  
  “[00:00] ...your fundraising ask right in the fundraising plan, who you're talking to, what you're asking for is intimately tied to the impact plan, the work plan, right?”

Benefits of Achieving Strategic Alignment

Aligning these three pillars leads to numerous advantages:

Seamless Growth: Organizations can scale more smoothly without feeling overwhelmed.
Enhanced Fundraising: Clear alignment makes fundraising more targeted and effective, as donors can easily understand and support the organization's vision.
Board Engagement: Board members gain a better understanding of their role in fundraising and the direct link between their efforts and the organization's impact.
Resource Optimization: Leaders can make informed decisions about hiring, budgeting, and program development based on a well-aligned strategic framework.
Synergistic Operations: Internal planning becomes more intentional, fostering a cohesive approach to achieving the organization's goals.

Case Study: Overcoming Expansion Fears

Brooke shares a real-life example of a nonprofit leader hesitant to expand into new communities. The leader feared that scaling would exponentially increase the workload and stress. Through strategic alignment, Brooke helped her realize that growth doesn't have to be linear or overwhelming. Instead, implementing the right systems allows for sustainable expansion without proportionate increases in workload.

“[00:00] ...if you listen to this podcast, you've heard me say this probably a dozen times. They're not just $700,000 organizations with more money that the way that they do things. And what I'm going to talk about today here, strategic alignment, they're the depth of their strategic alignment changes.”

Steps to Achieve Strategic Alignment

Brooke outlines a step-by-step process to align the three pillars:

Develop an Annual Plan: Clearly articulate impact goals and strategies based on the long-term strategic plan.
Create a True Cost Budget: Ensure the budget reflects the actual costs required to achieve the annual plan’s goals.
Design a Revenue Model: Develop a comprehensive fundraising strategy that aligns with the impact goals and budget needs.

She emphasizes that all three documents must tell a unified story of impact, cost, and resource acquisition.

Resources and Tools

Brooke offers additional support through her Aligned Anchors bundle, which includes:

Workshops: Step-by-step guides to create alignment.
Worksheets and Templates: For the annual plan, true cost budget, and fundraising calendar.
Real-Life Examples: Demonstrating effective alignment.

Listeners are encouraged to visit her website for more information:

“You can get it@brooke ritchiebabbage.com aligned anchors now too often teams bust out incredible, ambitious and detailed work plans...”

Conclusion

Brooke Richie-Babbage concludes by reiterating the importance of strategic alignment in overcoming growth plateaus. By ensuring that strategic direction, financial roadmap, and revenue model are cohesively integrated, nonprofits can achieve sustainable growth and enhanced impact without burnout. She invites listeners to explore her resources and continue the conversation through her newsletter and additional podcast episodes.

“[00:00] ...alignment between these three documents will make internal planning feel more intentional and smooth, will give your board the content and the context they need to help with network expansion and fundraising, and will position you for clearer, bolder fundraising.”

Additional Resources

Aligned Anchors Bundle: brookerichiebabbage.com/aligned-anchors
Newsletter: Leadership Forward 321 (Sign up by texting “impact” to 66866)
Contact: brookerichiebabbage.com

By addressing the critical issue of strategic misalignment, this episode provides invaluable guidance for nonprofit leaders striving to break through growth barriers and amplify their organizational impact.

Transcript

Brooke Richie Babbage (0:00)

Raise your hand if you've looked at your budget, team or the impact of your programs and just felt stuck. Like the pieces are there, but somehow you're not growing, you've just plateaued. That's what I'm going to talk about this week. How to push past that plateau. I'm going to talk about how making sure that your core strategic pillars, your planned impact, your budget and your fundraising plan are actually talking to one another and how that can be the fuel you need to get to that next level of budget and impact. Welcome to the Nonprofit Mastermind podcast. I'm Brooke Richie Babbage. I've been in the social impact game for 25 years as a social justice lawyer turned two time nonprofit founder and leader turned growth strategist and coach for leaders around the country. I grew my nonprofit from me and an intern in a tiny closet to a high impact seven figure organization. And along the way I learned so, so much about how to build an organization that has real impact and how to do it without burning out. In this podcast I share the nuts and bolts of all of it so you can do that too. We dive into the mindset, strategies and tactics of how to scale a high impact organization and how to do it in a way that's truly sustainable. Getting stuck or feeling like you've plateaued? This is one of the most common problems growing organizations face just before they really take off. They're doing all of the things busting their butts on fundraising, hiring, building the capacity of their team, working with their board. But they somehow have been at or near the same budget and level of impact for the last year, or even two. When organizations join my next level nonprofit program and we actually pull back the curtain on what's keeping them stuck, here's what we find. The lack of strategic alignment that they need to drive growth and avoid burnout. That is almost always the first thing that we find and that we work on. The core strategic pillars are there, but they are talking to one another. They aren't feeding into and off of one another. They're not helping to perpetuate and fuel growth. So growth either gets stuck or to the extent that it's sort of, it's incremental growth by 5%, 10% year after year. It's so hard. It feels so hard. This looks like a few different things and some of these may feel familiar to those of you listening. You look and your budget is like bouncing around the same level. And secretly, or maybe not so secretly, I definitely had this thought when I was Running my organization, sometimes you're thinking, it just can't be this hard all the time. Like there, this isn't sustainable, right? To do this. And maybe you grow, like I said, by 3% or 5% or even 10% each year. But I'm working with organizations that look and grow by 20, 25, 30% and not growth for the sake of growth, right? Not 20 or 30%, because, hey, that's exciting. But we're talking about growth and impact. We're talking about growth in reach, and we're talking about growth that is fueling itself. Right. One of the organizations that I work with was talking about wanting to expand into new communities in her city, Right. And they had gone really deep in one community. And that was really going well and it was very exciting. But she felt this block is too strong of a word, but there was sort of this friction around wanting to expand her programming. There was a need. There were people in, in those communities, community leaders asking to bring the programs. But when she and I peeled back the onion of, like, why she wasn't taking the steps, sort of full steam ahead in that direction, even though she said she wanted to, like, what kept getting in the way, what we realized was that if she was really honest with herself, she felt like if it's this hard to be in one community, and I'm talking about expanding to three, it's going to be three times as hard. Or, you know, I'm. I'm adding three more of these. And that feeling is scary. Nobody wants to do that. It's too much work. So what I had to help her understand was, no, actually it's not linear, right? That what happens is organizations grow and grow their impact and grow their budget. And particularly as they're nearing seven figures and they get to 2 million and 3 million, they are not. And if you listen to this podcast, you've heard me say this probably a dozen times. They're not just $700,000 organizations with more money that the way that they do things. And what I'm going to talk about today here, strategic alignment, they're the depth of their strategic alignment changes. So it actually can get. There is less friction when you start instituting the kinds of systems that you need to grow, right? So she wasn't just gonna add more, three times more work. She was gonna work in a different way. Right. Another way that this sort of stuckness shows up is this feeling that you can't quite connect with your donors or funders, the ones that you think you should be able to Connect with. Right. And I used to have this experience where I would be talking to someone and I'm like, you are our people. Like you would just love, like everything on paper suggests that you should love what we do and you are going to be a great donor. And lo and behold, it just took so much more work to get them to see my vision and to see the work. And I couldn't quite figure out why we weren't connecting. Here's another one that shows up all the time. Frustration that the board isn't helping to fundraise. And what we find is that the board doesn't really have the information they need to, to identify the right people, to inspire people, to activate donors in their network. They don't really see the relationship between the money that they're asking for and the work that's happening. Right. Another way this shows up, there's this sort of feast or famine, there's this vicious cycle of limiting and limited program funding. This is a big one, particularly for organizations as they pass seven figures for the first time. It's not every organization that's passing seven figures, but it's really, really common that a lot of how you get to 500k, 600k, even 900k is program funding that will not grow you to $1.52 million. It's just too restrictive. And so this sort of inability to figure out how to get money, to invest in growth, to hire, et cetera, is really difficult for people. The key is deeper strategic alignment. Right. And that's what I want to talk about today. There are three main elements and you need to strategic alignment and you need all three to be both good and to be working in concert. It doesn't work to not have one of these elements that I'm going to talk about. And it doesn't work to have them and have them be in silos. So at its core, here are the three parts of your organization that you need to have that need to be talking to each other. The first is your strategic direction. This is about your impact goals and the strategies that you're going to use to get there. This is usually captured in your annual plan or it should be captured in an annual plan that articulates goals and strategies. And that annual plan should be rooted in your long term strategic plan. Right. And should reference and be sort of baked into the priorities or grow out of the priorities articulated in your long term plan. So take note of these elements in the documents that I'm mentioning and just make sure that you have them in place because this is level one of this process, right? You want to make sure you have an annual plan that I identifies and articulates impact goals and strategies. So that's pillar one, your strategic direction. Pillar two is your financial roadmap. How much does the achievement of these goals and having the impact that you plan actually cost? This should be reflected in your true cost budget, to be distinguished from what I call a what we can do this for budget, which reflects what you raised last year and maybe a little bit of stretch. That is not the kind of budget that is going to actually help you grow in a sustainable way. You need a true cost budget that is an actual reflection, a true reflection of what is in your annual plan. Think about a storybook that you might read to a child. On one page is a picture, right? And on another page are words and they are reflecting the exact same story. That's what you need your annual plan and your budget to do. They need to be just words versus numbers telling the exact same story. And then the third or element that you have to have working in concert is your revenue model. How will you actually bring in the resources that you need in order to have the impact you want to have? This model is about who you will approach as potential supporters, which should be in part driven by the outcomes in your work plan, right? Who will be excited by the work that you're doing. This is also about how you're going to cultivate and build community with those people, the stories that you're going to tell them to inspire them, the impact that you're going to share to build trust. And it's about how you will ask for money. That's your revenue model. The alignment here is that all three of these, your strategic direction, your financial roadmap and your revenue model have to tell the same story. And at its core, it's a story of impact. Everything starts with, what are we going to do? This is what we are going to do in the next year. This is the impact we're going to have. These are the outcomes that we are going to accomplish in the coming year. This is how much it cost and this is how we're going to get there. That's the story. And those three documents, your annual plan, your true cost budget, and your fundraising strategies, your fundraising plan, have to tell that story of impacts, the outcomes, the cost of the impact, and the roadmap to the impact. Now, I've done a great step by step walkthrough of how to actually create alignment between these pillars. It's Inside my Aligned Anchors bundle, there's a great workshop that you and your team can go through. There are worksheets and templates for each of these pillars, including the annual plan, the true cost budget, and your fundraising calendar. And then their models of what alignment actually looks like and some real life examples. You can get it@brooke ritchiebabbage.com aligned anchors now too often teams bust out incredible, ambitious and detailed work plans. Then somewhere else, some other constellation of people, the ED and the board, maybe the leadership team, craft a budget that, like I said, is usually just an iteration on last year's budget and doesn't accurately reflect what's in the work plan. Often the budget process and the work planning process happen in the wrong order, right? We approve the budget and then we do the team's work plan. I've talked to a lot of organizations where that is the case. They don't think about it as being in the wrong order, that is the wrong order. And often you have organizations where the work planning and the budgeting are happening at the same time, but by different groups of people, right? Then you have yet another person or group of people who are tasked with coming up with a fundraising plan. And that fundraising plan doesn't necessarily strategically leverage what's in the work plan to tell the story of why you're raising the money you're raising to give board members an understanding of the impact that they're going to have, right? And because the budget isn't accurate, it's not actually designed to bring in what the organization actually needs. Ultimately, the less synergy there is between your planned impact and your budget and your fundraising strategies, the harder it will be to make the kind of stable and strategic decisions you need to grow, who to hire, who should be on your board, which direction to move in, and the harder it will be to get people to invest in your vision that makes it harder to raise money. Conversely, when all of your strategies, your impact, your finance and your revenue are aligned, they build on one another. And you start to see that not only are you bringing money in more smoothly, you're growing more smoothly. You have a deep understanding of the resources, including the team and the IT and the skills that you need to have the impact you want to have so that you can make smart, intentional decisions about those resources, right? About securing those resources. And you can have meaningful conversations with your board about what actually goes into the work that is planned, what it costs and why you are asking them to raise money and why that number and why these people, right? When you have this kind of strategic alignment. You have the depth of understanding and the language you need to share with potential donors so that every they can see the story behind your asks, right? The why behind your asks and what you are building towards, what you're asking them to invest in, you are future casting with them. Because the fundraising ask right in the fundraising plan, who you're talking to, what you're asking for is intimately tied to the impact plan, the work plan, right? You've done that. Creation of synergy behind the scenes. Another benefit is that board members actually understand the relationship between the work and the cost, right? How? If they buy into the planned work and believe that that's what the organization should be doing in the coming year when you ask them to help you raise money, it's not just about numbers on a page or in an email. Those asks are intimately and directly tied to the impact that the board has said they care about. Again, like the pictures on the opposite side of the words in the storybook that they like, right? That they signed on to help support. You have the fuel you need to make more targeted, bolder multi year asks for more than just restricted program funding because you can talk about the priorities that you are working towards and what those priorities cost. So to recap, there are three organizational pillars that you need to have talking to one another if you want to grow without burning out your annual plan, your true cost budget, and your strategic revenue plan or fundraising plan. Alignment between these three documents will make internal planning feel more intentional and smooth, will give your board the content and the context they need to help with network expansion and fundraising, and will position you for clearer, bolder fundraising. You can get help implementing all of this inside my aligned anchor bundle. Berkwitchiebabbage.com backslash aligned anchors. I also have two or three other podcasts where I go deep into each of these pillars and we will include them in the show notes. That's all for this week and I'll see you back here next week for more masterminds. Thanks so much for joining me this week. If you enjoy this podcast, I would love for you to leave a rating and a review. I read every single one and they really do matter. I also share extra tidbits and resources building on what we talk about here in my newsletter, Leadership Forward 321. You can sign up by texting the word impact to 66866 and finally, definitely check out the links and resources that I mentioned this episode@brookerichybabbage.com podcast see you next week.