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You've probably said some version of this at some point, maybe even recently. Once we stabilize the funding, we'll invest in our systems. Now this sounds like good stewardship, but I've watched this exact belief keep organizations stuck in a loop that never resolves because the funding doesn't stabilize. And the absence of infrastructure is one of the main reasons it doesn't. This is the cruelest catch 22 in the sector, and today I want to take it apart. Welcome to the Nonprofit Mastermind podcast where we name what's really happening inside growing nonprofits and what it actually takes to design a high impact nonprofit the right way. I'm Brooke Richie Babbage, longtime nonprofit strategist and coach. Each week I unpack the systems strategies and specific mindset shifts that help growing nonprofits get smart and intentional about growing their impact without burning out along the way. This show is about moving beyond grit to design. It's about building organizations that have the systems, structures and leadership capacity to truly hold the weight of their mission. Welcome. The logic behind this is coherent on its face. When you're running lean, every dollar has a job and systems, you can't see it. But I'm doing air quotes. Systems can feel abstract. Money spent on something that isn't directly serving clients, isn't building programs, isn't keeping the lights on right. It does not feel like rubber in the road. It feels fuzzy, like a nice to have the impulse to protect the mission facing work makes sense. I am not dismissing it, but this is the way it usually gets framed. We'll deal with infrastructure. Once we're through this tight stretch, we'll build systems. Once we're a little more stable, we'll invest in infrastructure. Once we we have the funding to meet all of our program needs. The problem with all of these is that the tight stretch, the instability, it's baked into the structure of a 1 million, 2 million, $3 million organization. It's not a season you pass through. It's an operating condition. That dance between capacity and funding, between growth and stability, is an ongoing dance. There is no natural endpoint at which resources suddenly appear and the capacity problem solves itself. There's also something subtler happening, kind of implicit belief that infrastructure is something you graduate into, that it's a reward you unlock. Once you've proven you're a real organization, right? Once you get to a level of stability, then you can build the systems that help you scale. This is a phrase I just heard somebody say. Underlying this is this idea that you have to earn it, that is not how this works. And it's part of what makes this belief so sticky and so damaging because we don't say it out loud. It's just something we absorb from the sector we carry in our minds as leaders. The belief sequences it backwards. Stability first, then infrastructure. But the causality actually runs in the other direction. Infrastructure creates the conditions for stability. It's not what you buy with stability after the fact. Here's the brutal part. The conditions that make infrastructure feel unaffordable are exactly the conditions infrastructure would fix. You're not waiting for a window to open. You're waiting for a door to unlock from the inside while standing on the outside holding the key. Think through what funding instability actually looks like in practice. Right? Unpredictable grant renewals, inconsistent reporting because the data isn't clean, lack of glean data, major donors who don't increase gifts or give their gifts right at the last minute, board members who aren't being activated because they don't know where to plug in. These show up as revenue problems, as money you can't count on. Right? And when we talk about funding stability, I talk about this a lot in my coaching and in my work. I talk about a revenue engine or capital flywheel. What you want is revenue that is consistent and reliable and predictable, right? So these things that I just highlighted, the unpredictable renewals and the inconsistent reporting and the major donors you can't count on and the board members who aren't activated, they show up as revenue problems, but they are not revenue problems. They're systems problems that have been living inside a money story. And when you don't have things like a grants calendar with real deadline tracking, you scramble or miss cycles entirely, you are writing reports at the last minute or someone's writing reports and they're bad, right? That happens a lot. When there's no cultivation rhythm, a genuine rhythm that is baked into the DNA of how you do your fundraising for major donors, for mid level donors that is different from major donors, from minor donors, that is Automated relationships go cold between asks. When your financial reporting is inconsistent or owned by one person and that person is scrambling so they can't be strategic about it, the program officer who wants to go to bat for you for your renewal doesn't have really good content to take to their team. Right. When your data doesn't tell the story you want it to tell, when you have the data or you don't have the data and you have this story over here and they aren't connected, you don't have the content to take to your program officers, to your major donors, to invite people in. The instability isn't happening despite the lack of systems. It's happening because of it. And there's something almost poetic about this loop, about this trap, and not in a good way. You're waiting for stability to build infrastructure. And infrastructure is what creates stability. So you wait. And the conditions that made you wait in the first place don't change, they just accumulate. So I named funders and I want to speak a little more directly for a moment to the funder psychology piece because it doesn't get talked about enough here. One of the keys to sustainable revenue or to a revenue engine is general operating support. That is multi year overtime, right? And that can come from funders, that can come from major donors, that can come from monthly giving, right? There are lots of different ways up that mountain. But I want to talk for a moment about funder psychology, major donor psychology, because they're not just evaluating your mission. And one of the tough things that I have seen, leaders that were leading a six figure organization that grew to a seven figure organization or an early stage seven figure organization that is now 1.5, that is now 3 million, right? Or trying to get 3 million, they're used to having conversations about their mission. And often they think of fundraising, effective fundraising, as being really inspiring. Right? Funders, major donors, aren't just looking at your mission. Your mission matters. That is the root of affinity. And people give from a place of affinity, shared affinity. But that's not what activates the gift. That's definitely not what activates multi year general operating supports at the level that you need to be thinking about. What they're evaluating is organizational capacity and strength and resilience. And this is usually without naming it as such. What they're looking for is can this organization execute over time? Will they be around and still doing the work we're investing in five years from now? Right. This does not mean you have to show up in every meeting. And I'm going to say this really clearly. You do not have to show up in every meeting knowing exactly everything you're doing. You are allowed to be vulnerable. You are allowed to say we are figuring this out. But they need to see that you understand the importance of infrastructure. Right? Infrastructure is where the stability comes from. When you under invest in infrastructure, the chances that you will be doing good work five years from now are drastically reduced. And they know that. And they see that when a CEO seems overwhelmed by data in a meeting, vague on their data, can't speak clearly to Their model, their theory of change. When there's this low grade sense of crisis just beneath the surface, it does not make major donors, funders, think stability. Again, you are allowed to be honest. You should be honest in a strategic and intentional way about the realities of running an organization. I talk to the folks that I work with all the time about moving out of this idea of having to show up with everything tied neatly in a bow, but having a real grown up conversation about funding insecurity or cliffs that are coming or the fact that as is the case for everybody, finances are really weird, right? And they have been for the last 15 months. Having that honest conversation is different than not being able to speak clearly to your model or not having a vision for the team you're building or the systems that are in place to hold you all together. Grant officers don't go to bat for renewal if you can't speak clearly to this. And nobody is going to tell you that directly. Usually what they're going to say is that the grant didn't align this cycle, or if they're a donor, that their giving priorities have shifted. But the read they're making is the same. And I have been a funder, I've worked with funders for years and we talk about it. I've heard them name this directly. Organizational stability, organizational resilience, organizational competence. Right? This is what they're looking for and it's a real factor in the room. So before I get to the reframe, I want to address something else because I hear this objection every time I talk about this. Brooke, I hear you, but I literally don't have the capacity to build systems right now. And that's real. I get it. I'm not talking about a $500,000 systems overhaul. I'm not talking about hiring an operations director and setting up a new database or CRM or a new ops team for a $1.8 million organization. The version of this that actually moves the needle looks like three documented processes and one clear accountability structure to move them forward. Maybe it's your grant reporting workflow, maybe it's your donor stewardship and acknowledgement cadence or your monthly financial close, right? Setting up SOPs, setting up processes, naming decision rights, defining accountability structures, who owns what, lack of ambiguity. It's that simple, right? A board that operates from a dashboard rather than a collection of past meeting notes is going to move better. That's the floor, right? And that investment isn't enormous. It's just intentional. And the ongoing cost of not having it is actually enormous. So here's the belief I want you to walk away with today. Infrastructure is not overhead. Infrastructure is the thing that makes everything else repeatable. And repeatable means you can do it again and again, even when you're tired. Repeatable holds itself when a staff member leaves. When a funder changes a timeline, you can step away from a process and still have it run. You can grow through it without it collapsing under you. The organizations that I work with that break out of this loop aren't the ones who finally had enough money to invest in systems. Many of the organizations that I work with, working with me, investing in systems is the first major investment in infrastructure they've made. These are not organizations that have $10 million to spare. They are the ones who made the decision that systems were a precondition, not a prize. That decision came first. The resources to support it followed, usually because the systems that the organization built made them more compelling, made them more confident when talking to funders. Which is the thing we just talked about, right? Waiting for stability to build systems is waiting for the tide to go out before you build the seawall. The seawall is what makes the tide survivable. You can't sequence it the other way. It doesn't work if this is resonating. If you've heard something here that sounds like where your organization is right now, take four minutes and fill out the fit. Check brookricchiebabbage.com fitcheck you'll get an invitation for a clarity call and we can talk. I hope this was helpful. I will see you back here next week for more Mastermind. Thanks for listening. If this episode resonated, leave a review. I read them and they do matter. And make sure you're subscribed so that you never miss a deep dive into building your resilient nonprofit. And finally, if you're ready to move from grit to good design, head to brooke richiebabbabbage.com strong to take the 90 second quiz and find out where to start.

Summary4 min read

Nonprofit Mastermind Podcast

Episode: The Answer To Your Funding Instability May Be Hiding In Plain Sight
Host: Brooke Richie-Babbage
Date: July 28, 2026

Episode Overview

In this episode, host Brooke Richie-Babbage addresses a prevalent but rarely challenged belief in the nonprofit sector: that you must achieve financial stability before investing in organizational infrastructure or systems. Brooke outlines the "catch 22" that keeps organizations stuck in cycles of instability, arguing that, in reality, infrastructure is the precondition for financial stability—not its reward. Through anecdotes, sector insights, and actionable advice, she reframes approaches to capacity-building and reveals how strong systems can unlock sustainable funding and long-term impact.

Key Discussion Points & Insights

The Nonprofit "Catch 22": Stability vs. Infrastructure

Many leaders believe, “Once we stabilize the funding, we’ll invest in our systems.”
- This feels logical, but "the funding doesn’t stabilize, and the absence of infrastructure is one of the main reasons it doesn’t." (00:24)
Infrastructure is often seen as a luxury, something to be purchased after achieving stability, but this sequencing is backwards.

“The causality actually runs in the other direction. Infrastructure creates the conditions for stability. It’s not what you buy with stability after the fact.” (03:34)

Common Signs of Funding Instability (and Their Real Causes)

Unpredictable grant renewals
Inconsistent or last-minute reporting due to lack of clean data
Major donors who “don’t increase gifts or give at the last minute”
Board members disengaged because they aren’t sure where to plug in
(05:28–06:22)
Brooke points out that "these show up as revenue problems, but they are not revenue problems. They're systems problems that have been living inside a money story.” (06:38)

Practical Examples of System Gaps

No grants calendar or real deadline tracking → missed funding cycles
No genuine donor cultivation rhythm → relationships go cold
Financial reporting owned by one person who is overwhelmed → limited strategy
Lack of data that aligns with organizational stories and outcomes
(06:50–08:12)

Infrastructure and Funder Psychology

Funders are not just evaluating your mission; they look for:
- Organizational capacity, strength, and resilience
- Evidence the organization “can execute over time” (09:35)
Presenting as overwhelmed, vague on data, or lacking clarity about systems signals instability to funders—even if unintentional.

“What they’re evaluating is: can this organization execute over time? Will they be around and still doing the work we’re investing in five years from now?” (09:54)
Funders rarely voice these concerns directly, instead citing "shifting priorities" or "lack of alignment."
(13:43)

Addressing the “But We Can’t Afford It” Objection

Brooke acknowledges leaders’ real constraints:

“Brooke, I hear you, but I literally don’t have the capacity to build systems right now. And that's real. I get it.” (14:19)
Infrastructure investment doesn’t require a massive overhaul:
- “Three documented processes and one clear accountability structure to move them forward.”
- Examples: grant reporting workflow, donor stewardship cadence, monthly financial close process (15:10–15:55)
Key is intentionality, not scale: Start simply and build clarity (“who owns what, lack of ambiguity—it's that simple”).

The Core Reframe: Infrastructure Is not Overhead

Infrastructure makes work repeatable and sustainable—even through staff transitions or shifts in funding.

“Infrastructure is not overhead. Infrastructure is the thing that makes everything else repeatable. And repeatable means you can do it again and again, even when you’re tired.” (16:59)
The organizations that break out of instability are the ones who treat infrastructure as a precondition for growth, not as something you buy after you’ve grown.

Notable Quotes & Memorable Moments

“The conditions that make infrastructure feel unaffordable are exactly the conditions infrastructure would fix. You’re not waiting for a window to open, you’re waiting for a door to unlock from the inside while standing on the outside holding the key.” — Brooke Richie-Babbage (04:13)
“The instability isn’t happening despite the lack of systems. It’s happening because of it. And there’s something almost poetic about this loop, about this trap, and not in a good way.” (08:25)
“When you under invest in infrastructure, the chances that you will be doing good work five years from now are drastically reduced. And funders know that. And they see that.” (11:38)
“Waiting for stability to build systems is waiting for the tide to go out before you build the seawall. The seawall is what makes the tide survivable.” (18:38)

Actionable Takeaways

Do not defer infrastructure investment until you are “stable.”
Small steps matter: begin with a handful of documented systems and clear accountability.
Equip yourself to speak clearly and confidently about your organizational capacity—not just your mission.
Recognize that building infrastructure can actually unlock greater funder trust and financial stability.

Timestamps for Important Segments

00:24 — Introduction to the funding-infrastructure “catch 22”
03:34 — Why the sector’s belief system is backwards
05:28–08:12 — How systems gaps create “revenue problems”
09:35–11:38 — The true criteria funders use to award renewable and general operating support
14:19–15:55 — Starting small: What foundational infrastructure looks like in practice
16:59–18:38 — The key reframe: Infrastructure as the prerequisite to stability

Closing Message

Brooke concludes with a persuasive call to action for nonprofit leaders: drop the narrative that infrastructure is a luxury, and instead, treat it as your organization’s lifeline to sustainable impact and resource growth.

For nonprofit leaders seeking to break free from funding instability, this episode offers a powerful mindset shift—and the practical first steps to make it real.

Loading summary

Transcript1 lines

[00:00]
A
You've probably said some version of this at some point, maybe even recently. Once we stabilize the funding, we'll invest in our systems. Now this sounds like good stewardship, but I've watched this exact belief keep organizations stuck in a loop that never resolves because the funding doesn't stabilize. And the absence of infrastructure is one of the main reasons it doesn't. This is the cruelest catch 22 in the sector, and today I want to take it apart. Welcome to the Nonprofit Mastermind podcast where we name what's really happening inside growing nonprofits and what it actually takes to design a high impact nonprofit the right way. I'm Brooke Richie Babbage, longtime nonprofit strategist and coach. Each week I unpack the systems strategies and specific mindset shifts that help growing nonprofits get smart and intentional about growing their impact without burning out along the way. This show is about moving beyond grit to design. It's about building organizations that have the systems, structures and leadership capacity to truly hold the weight of their mission. Welcome. The logic behind this is coherent on its face. When you're running lean, every dollar has a job and systems, you can't see it. But I'm doing air quotes. Systems can feel abstract. Money spent on something that isn't directly serving clients, isn't building programs, isn't keeping the lights on right. It does not feel like rubber in the road. It feels fuzzy, like a nice to have the impulse to protect the mission facing work makes sense. I am not dismissing it, but this is the way it usually gets framed. We'll deal with infrastructure. Once we're through this tight stretch, we'll build systems. Once we're a little more stable, we'll invest in infrastructure. Once we we have the funding to meet all of our program needs. The problem with all of these is that the tight stretch, the instability, it's baked into the structure of a 1 million, 2 million, $3 million organization. It's not a season you pass through. It's an operating condition. That dance between capacity and funding, between growth and stability, is an ongoing dance. There is no natural endpoint at which resources suddenly appear and the capacity problem solves itself. There's also something subtler happening, kind of implicit belief that infrastructure is something you graduate into, that it's a reward you unlock. Once you've proven you're a real organization, right? Once you get to a level of stability, then you can build the systems that help you scale. This is a phrase I just heard somebody say. Underlying this is this idea that you have to earn it, that is not how this works. And it's part of what makes this belief so sticky and so damaging because we don't say it out loud. It's just something we absorb from the sector we carry in our minds as leaders. The belief sequences it backwards. Stability first, then infrastructure. But the causality actually runs in the other direction. Infrastructure creates the conditions for stability. It's not what you buy with stability after the fact. Here's the brutal part. The conditions that make infrastructure feel unaffordable are exactly the conditions infrastructure would fix. You're not waiting for a window to open. You're waiting for a door to unlock from the inside while standing on the outside holding the key. Think through what funding instability actually looks like in practice. Right? Unpredictable grant renewals, inconsistent reporting because the data isn't clean, lack of glean data, major donors who don't increase gifts or give their gifts right at the last minute, board members who aren't being activated because they don't know where to plug in. These show up as revenue problems, as money you can't count on. Right? And when we talk about funding stability, I talk about this a lot in my coaching and in my work. I talk about a revenue engine or capital flywheel. What you want is revenue that is consistent and reliable and predictable, right? So these things that I just highlighted, the unpredictable renewals and the inconsistent reporting and the major donors you can't count on and the board members who aren't activated, they show up as revenue problems, but they are not revenue problems. They're systems problems that have been living inside a money story. And when you don't have things like a grants calendar with real deadline tracking, you scramble or miss cycles entirely, you are writing reports at the last minute or someone's writing reports and they're bad, right? That happens a lot. When there's no cultivation rhythm, a genuine rhythm that is baked into the DNA of how you do your fundraising for major donors, for mid level donors that is different from major donors, from minor donors, that is Automated relationships go cold between asks. When your financial reporting is inconsistent or owned by one person and that person is scrambling so they can't be strategic about it, the program officer who wants to go to bat for you for your renewal doesn't have really good content to take to their team. Right. When your data doesn't tell the story you want it to tell, when you have the data or you don't have the data and you have this story over here and they aren't connected, you don't have the content to take to your program officers, to your major donors, to invite people in. The instability isn't happening despite the lack of systems. It's happening because of it. And there's something almost poetic about this loop, about this trap, and not in a good way. You're waiting for stability to build infrastructure. And infrastructure is what creates stability. So you wait. And the conditions that made you wait in the first place don't change, they just accumulate. So I named funders and I want to speak a little more directly for a moment to the funder psychology piece because it doesn't get talked about enough here. One of the keys to sustainable revenue or to a revenue engine is general operating support. That is multi year overtime, right? And that can come from funders, that can come from major donors, that can come from monthly giving, right? There are lots of different ways up that mountain. But I want to talk for a moment about funder psychology, major donor psychology, because they're not just evaluating your mission. And one of the tough things that I have seen, leaders that were leading a six figure organization that grew to a seven figure organization or an early stage seven figure organization that is now 1.5, that is now 3 million, right? Or trying to get 3 million, they're used to having conversations about their mission. And often they think of fundraising, effective fundraising, as being really inspiring. Right? Funders, major donors, aren't just looking at your mission. Your mission matters. That is the root of affinity. And people give from a place of affinity, shared affinity. But that's not what activates the gift. That's definitely not what activates multi year general operating supports at the level that you need to be thinking about. What they're evaluating is organizational capacity and strength and resilience. And this is usually without naming it as such. What they're looking for is can this organization execute over time? Will they be around and still doing the work we're investing in five years from now? Right. This does not mean you have to show up in every meeting. And I'm going to say this really clearly. You do not have to show up in every meeting knowing exactly everything you're doing. You are allowed to be vulnerable. You are allowed to say we are figuring this out. But they need to see that you understand the importance of infrastructure. Right? Infrastructure is where the stability comes from. When you under invest in infrastructure, the chances that you will be doing good work five years from now are drastically reduced. And they know that. And they see that when a CEO seems overwhelmed by data in a meeting, vague on their data, can't speak clearly to Their model, their theory of change. When there's this low grade sense of crisis just beneath the surface, it does not make major donors, funders, think stability. Again, you are allowed to be honest. You should be honest in a strategic and intentional way about the realities of running an organization. I talk to the folks that I work with all the time about moving out of this idea of having to show up with everything tied neatly in a bow, but having a real grown up conversation about funding insecurity or cliffs that are coming or the fact that as is the case for everybody, finances are really weird, right? And they have been for the last 15 months. Having that honest conversation is different than not being able to speak clearly to your model or not having a vision for the team you're building or the systems that are in place to hold you all together. Grant officers don't go to bat for renewal if you can't speak clearly to this. And nobody is going to tell you that directly. Usually what they're going to say is that the grant didn't align this cycle, or if they're a donor, that their giving priorities have shifted. But the read they're making is the same. And I have been a funder, I've worked with funders for years and we talk about it. I've heard them name this directly. Organizational stability, organizational resilience, organizational competence. Right? This is what they're looking for and it's a real factor in the room. So before I get to the reframe, I want to address something else because I hear this objection every time I talk about this. Brooke, I hear you, but I literally don't have the capacity to build systems right now. And that's real. I get it. I'm not talking about a $500,000 systems overhaul. I'm not talking about hiring an operations director and setting up a new database or CRM or a new ops team for a $1.8 million organization. The version of this that actually moves the needle looks like three documented processes and one clear accountability structure to move them forward. Maybe it's your grant reporting workflow, maybe it's your donor stewardship and acknowledgement cadence or your monthly financial close, right? Setting up SOPs, setting up processes, naming decision rights, defining accountability structures, who owns what, lack of ambiguity. It's that simple, right? A board that operates from a dashboard rather than a collection of past meeting notes is going to move better. That's the floor, right? And that investment isn't enormous. It's just intentional. And the ongoing cost of not having it is actually enormous. So here's the belief I want you to walk away with today. Infrastructure is not overhead. Infrastructure is the thing that makes everything else repeatable. And repeatable means you can do it again and again, even when you're tired. Repeatable holds itself when a staff member leaves. When a funder changes a timeline, you can step away from a process and still have it run. You can grow through it without it collapsing under you. The organizations that I work with that break out of this loop aren't the ones who finally had enough money to invest in systems. Many of the organizations that I work with, working with me, investing in systems is the first major investment in infrastructure they've made. These are not organizations that have $10 million to spare. They are the ones who made the decision that systems were a precondition, not a prize. That decision came first. The resources to support it followed, usually because the systems that the organization built made them more compelling, made them more confident when talking to funders. Which is the thing we just talked about, right? Waiting for stability to build systems is waiting for the tide to go out before you build the seawall. The seawall is what makes the tide survivable. You can't sequence it the other way. It doesn't work if this is resonating. If you've heard something here that sounds like where your organization is right now, take four minutes and fill out the fit. Check brookricchiebabbage.com fitcheck you'll get an invitation for a clarity call and we can talk. I hope this was helpful. I will see you back here next week for more Mastermind. Thanks for listening. If this episode resonated, leave a review. I read them and they do matter. And make sure you're subscribed so that you never miss a deep dive into building your resilient nonprofit. And finally, if you're ready to move from grit to good design, head to brooke richiebabbabbage.com strong to take the 90 second quiz and find out where to start.