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Why does revenue still feel fragile even after a strong year end fundraising push? It's a vulnerable feeling, right? You rallied your board, you energized your team, you pushed out 17 versions of your fundraising emails. And it worked. The money did come in, but somehow things still don't truly feel stable. Today I'm going to unpack why that happens and what to do about it. Welcome to the Nonprofit Mastermind podcast where we name what's really happening inside growing nonprofits and what it actually takes to design a 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. So here's the deal. Year end fundraising can be deceiving. That's because year end fundraising is a performance spike, not a system. It's often a short term win. It looks like momentum because it is. The campaigns, the giving season energy, the sense of urgency that gets created, all of it can generate a real surge in donations, in funding and support and attention. But momentum is not the same thing as stability. Stability is about what happens after the campaign closes. It's the difference between getting a spike of revenue and having a true flywheel that creates predictable, sustainable revenue over time. You may have raised $30,000, $80,000, $200,000 in December, but if you look carefully and some meaningful percentage of that came from a handful of donors, friends of donors, and you don't really have a plan to steward them if it required an enormous manual effort from you or your team, writing emails, following up. That's not stability. It's more like a sugar high. And I have kids. I can tell you what happens after a sugar high. It's a crash. And that crash looks like things like scrambling to replace last year's gifts, right? So you had this spike, your budget went up and now you're like, crap, how are we going to do that again? Reinventing your campaign flywheel from scratch again next quarter with the hopes that it will do the same thing. Even without the giving season energy and end of year urgency, it looks like holding your breath until the next big grant or funder or donor comes through. So if you're feeling some version, any version of that post year end post campaign fragility, here's what might actually be going on. Your fundraising effort was successful, but your revenue model is still more fragile than it should be. Now, if you've been listening to this podcast for a while, you've probably heard me say some version of this. Your problem isn't effort. You're not doing anything wrong. You have a design problem that is almost always true, and it is nowhere more true than with your revenue. This is where I see it pop up all the time. What I mean is most organizations tend to be growing on top of revenue structures that were never actually designed to hold the scale they're reaching for, right? You learn how to, or you figure out how to raise $300,000, and then you figure out how to raise $800,000 and then you figure out how to Raise $1.7 million. And those are all qualitatively different enterprises, right? They require different strategies and different tactics and different ways of thinking about money and finance and donors and partners and brand and all of the things, right? But if you learn how to do it at 800,000 and then you grow to the point where you're 1.9 million. What I see with the organizations that I work with, because I work with the organizations that are really in that early seven figures, 1 to 3 million range, they're growing, they are growing on top of structures that they really perfected for a smaller budget. So what that looks like in practice is heavier reliance on one time campaigns, right? Year end to help them close a gap or mid year or board campaign overdependence on the executive director, or if they have a development team or a development person, that one person just sort of make it rain, right? Bring in the money. It looks like inconsistent donor stewardship. There are certain donors they follow up with where there is a relationship or they have a system in place for a particular type of donor, but it's not consistent and it's not across the board. It looks like a funding model that has spikes and crashes, right? Feast or famine, instead of one that just hums along and that design deficit shows up. Even if money is coming in, right? Because it is a design flaw, it's a crack in the container, not about how much money you're able to put in the container. Deep down, you know if you had to do it again next quarter, right? If I said to you, you just brought in $120,000 in December, do it again in March, deep down, you know that the whole machine might fall apart. You know that the revenue engine isn't really an engine. It's a patched together bike that you are pedaling like a hell to get up the hill. And that's the real reason it's exhausting. That's the real reason revenue feels fragile. It's not because you didn't raise enough. It's not because you're not raising enough. It's not because you're leading wrong. It's because your system for raising and sustaining revenue wasn't built to scale. It wasn't built to be sustainable. Specifically, this is called a capital design deficit. It's one of the three core deficits in my stability stack framework. What do I mean by that? I mean that your organization is relying on heroic efforts, targeted quick wins, campaigns that spike your revenue when what it really needs is infrastructure. You're trying to build financial stability on top of a foundation that wasn't built to hold financial stability. So even when the money comes in, it leaks right back through unclear roles, through inconsistent systems, through improper or insufficient donor stewardship, through strategies that only work when you and your team are in overdrive. You feel fragile after fundraising, not because you didn't raise enough, but because your revenue model isn't designed to hold what you raised. That's what I want you to take away here, right? You feel fragile not because you're failing, but because you're still carrying the weight of an unstable structure on your back. So what does actual stability look like? It looks like a revenue engine. A system that turns momentum into repeatable, predictable, sustainable income. Those are the three words I want you to remember and sort of pressure test, right? Look at your fundraising and ask yourself. Repeatable, predictable, sustainable. Here's what is included in what I call a capital engine. Recurring revenue. Things like long term pledges, monthly donors, very, very powerful and important. Second, systematized stewardship. This is how you don't leak money from donors and funders, right? I, I want to say donor retention rates are like 19, 20, some percent. I mean, it's really, really low. It's really bad. And that is leaving money on the table because it is cheaper than it is more cost efficient to retain donors than to do all of the work. And fundraising pushes to bring in new donors. So you want to be feeding your funnel, right? You want to be bringing more people in. But stewardship is where the magic lives. So systematized stewardship, so donors stay connected and engaged and warm all year round, not just in Q4. Third, really clear donor segments. I cannot emphasize this enough. Too many of the organizations that I work with and that come to me thinking that they don't know how to do individual fundraising or individual fundraising just doesn't work for them or just there's no roi. It just takes so much effort. Often those things are true. Not because or the. The latter two are true, right? It's. There is a low ROI and it does take too much effort and therefore they think it doesn't work. So the reason that it's taking too much effort and they're seeing low ROI is often because of this third piece, right? They are treating fundraising like putting up a billboard and hoping that the right people see it and respond, right? If I say the right thing, if our mission is compelling enough, if our young people are compelling enough, if what we're doing is good and important enough, people will know it and they will be activated. I'm just going to say it here. That is not how fundraising works. It is not how people give. It is not a billboard. There is no magic phrase that you're going to put in front of people via email or social media and they're going to say, oh my gosh, that's amazing. Here's $50,000 fundraising from individuals. It's not that different with foundations, right? People give from a place of shared affinity. They give from their heart and they rationalize with their head. So that means you have to talk to the right people. I want you to think about fundraising not as a billboard, but instead as a note to a friend, right? How would you talk about what you do to a friend that is just as excited about and passionate about your mission and your work as you are? What would you say? How intimate would that communication feel? They'd feel like they are behind the curtain with you, right? Building something with you. That is how you want your donors to feel. That's when they give. So this donor segments piece is absolutely non negotiable. You have to talk to the right people about the right things. You cannot be talking to everybody the same way. So that's the third piece. And then fourth, you need a predictable pipeline. A pipeline does not just mean prospects. It doesn't just mean the 50 foundations you're going to apply to, some of whom are warm and some of whom you found on a list. A predictable pipeline is about prospects plus the processes for cultivating them and moving them to invest. That's a pipeline. So you need all four of these in what I call your capital engine. Recurring revenue, systematized stewardship, clear donor segments and a predictable pipeline. And everything else is built around those, right? This capital engine is just one piece of the larger stability flywheel that we install inside my next level nonprofit and elevate programs. It's how you build a foundation that can actually sustain impact at scale. Right? And this revenue piece is absolutely critical. Now, the most important part of what I'm talking about is that none of this is just about adding more strategies, doing more stuff, learning more stuff. Really, the core takeaway here is that everything I'm talking about is about removing randomness. It's about being intentional, not throwing spaghetti against the wall and hoping it worked and then trying to do it again in a quarter. Stability, all stability. And right now, we're talking about financial stability comes from intentional design. I'm going to say that again. Stability comes from intentional design. You build stability. You design stability by creating the structures that keep you stable. Stability comes from knowing exactly how you're going to generate revenue in March. It's knowing that when you put a dollar in, you will get $3.72 back. When you pull this lever, money comes out and you can do it predictably and reliably and consistently and sustainably. That's an engine, right? It comes from stability comes from having the systems and team to execute without burning out. So if you are nodding along to this, if you're feeling that tension between what you just raised and. And that inner voice that still feels like things are insecure, here's what I want you to do. There are three things. First, do a revenue reality check. Pull up your revenue from the last 12 months. If you're listening to this in real time, it is January. So look at your PNL or your cash flow from the last year, January to December of last year, and ask yourself, where did most of the money come from, what sources? And how much of this is repeatable? Where am I seeing systems as opposed to heroic effort? If we had to do this again, pick one quarter. If we had to do our best quarter again, do we have what we need to do that? Do we have the messaging? Do we have the infrastructure, the people, the processes? Right. Do we have an engine? Second, spot the bottlenecks. Once you've done that reality check, what parts of your fundraising are still too manual? What parts are living inside your head or the head of your development director? One person, maybe your board chair. What would disappear if you stopped pushing and leading? And finally, take this information and start mapping out your own capital engine? That might mean systematizing how you follow up with donors. Honestly, if you're listening to this in January, I would start there. It might mean mapping your Donor journey or putting a rhythm in place for re engaging lapsed funders. I'm going to put a link in the show notes to the slides of a training that I did in December all about building stewardship into your capital engine. So you can grab those slides and if you want actual help, tools, plug and play language, actual systems built out for you. Absolutely. Check out Elevate. You can get that@brookratchybabbage.com Backslash Elevate. We build your capital engine. We give you everything you need to build your capital engine. I would start with stewardship. That also might mean systematizing your pipeline. Do you have a lot of funders and donors and people that you are excited to reach out to? Right front of your pipeline, top of your funnel. How are you systematizing the cultivation and the invitation? That might mean for those of you who have some higher level donors, mapping your donor journeys, putting a rhythm in place for engaging them, for building and deepening their sense of affinity. That might mean putting a rhythm in place for re engaging lab students, donors, right? When you look and you do your revenue reality check and you realize, wait a minute, yeah, we brought in money, but where did the donors that gave in 2024 and 2023 go? And how do we get them back? Right? So that is what you can do to start building this capital engine, whatever it is. I want you to think repeatable, predictable, sustainable, right? Make it shared, make it structural. You don't just need more money and more fuel. If you take nothing else away from this episode, it's that you need a better container. Right? And that will be true irrespective of the size of your organization. You are not doing anything wrong. Right? I'm going to leave you with this. You're not doing anything wrong. This is so normal for growing organizations. You run the campaign, you bring in the gifts, you work your butt off and things can still feel shaky. That is not a reflection of your skill, it's a reflection of your design. And when you realize that you have a design deficit, as you will continue to realize as your organization grows. And it may be a capital deficit, it may be a capacity deficit. Whatever the design deficit is, they're normal. The key is to fix them. Right? The good news about organizational design is that design is fixable. It's buildable, it's within your control. So ask yourself, what would need to change so I don't feel this fragile again this time. In six months, if you are ready to start building your capital engine or you just want support diagnosing where your revenue model is leaking. I would love to help you. You can build on your own with your team and monthly coaching from me with Elevate. Brookrugbabbage.com Elevate and you can also, if you're 1 million and above, apply to work more closely with me and my coaching team to build your entire capital engine inside the next level nonprofit Mastermind. You can apply@brooke richiebabbage.com bitcheck that is it for this week. 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 brookrichebabbage.comStrong to take the 90 second quiz and find out where to start.