2023 Reflections With Douglas Nelson, Host, And Alex Wilson, Producer

 

Reflecting on 2023: Where others see weakness, we find strength. In the social profit sector, challenges are opportunities, diversity is power, and authenticity builds lasting impact. Join us for a special year-end episode where our host, Douglas Nelson, and the director of communications, Alex Wilson, take a look back at the remarkable year that was 2023. Together, they reflect on the highs and lows, the trends, and the lessons learned in the social profit sector. Douglas and Alex share their perspectives on whether we’ve emerged stronger at the end of 2023 than we started. They explore the impact of large campaigns, revealing surprising trends and challenges faced by organizations across the sector. They also touch on the “war on talent,” predictions for 2024, and more. Tune in now and discover the year that has been and the years to come for social impact.

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2023 Reflections With Douglas Nelson, Host, And Alex Wilson, Producer

In this episode, I’m joined by Alex Wilson, our Director of Communications here at The Discovery Group and the producer of the show for a very special episode. As we approach the final days of 2023, Alex and I reflect on the past year, what we’ve seen, and what we’ve learned. We talk about the state of our sector, trends, highlights, and most importantly what we’re looking forward to and what you can take into your organization and career as a leader in the social profit sector. Alex, welcome to the show.

Thanks, Doug. Happy holidays.

Happy holidays to you.

As you know, I always look forward to any episodes where I can come on, turn the tables around, and ask you questions to hear your perspective. Thank you for inviting me back. I take it as a great honor and privilege.

I’ll tell you. As a producer, you’re often saying, “We need to do these episodes.” I always approach them with a little bit of nerves and a little reticence. One of the best things about doing this show is to hear the great stories and the wisdom that comes from our guests. I worry a little bit for our readers in an episode where it’s just me talking about what I think. Hopefully, you can carry me across the finish line as we go through with this.

You’ll do good. Let’s start with the big picture. Where do you think our sector is? Are we better off at the end of 2023 than we were at the beginning?

That’s a hard question to answer, Alex. It depends so much on different areas of our sector and different individual organizations. One of the trends we were looking forward to seeing on what was going to happen when we did this last time was we’d seen this great number of large campaigns launched with big numbers and organizations hoping that large campaign goals and big ambitions we’re going to inspire tremendous full entropy.

I thought it was a bit of a controversial take at the time but I was concerned that a number of those big campaigns would struggle to find traction and it certainly has proven to be the case. We’ve seen a year of some tremendous nine figures. We have lots of eight-figure gifts across the country. There are many seven-figure gifts. Donors are there and responding but there’s been a lot of distractions in the world and our sector that may be pulling donations out.

We’ll see donations increase when the numbers are in but it’s been a tough year across the sector. There are two things I do want to highlight that as a social profit sector, we can be particularly proud of. Our sector largely through the great work of Imagine Canada and other leading voices in the sector has taken on advocacy roles with respect to the changes that the Federal government is making that would have an impact on large donors in our sector.

Also, the different treatment of tax for appreciated securities remains an issue but it’s created some instability in the sector. However, it’s been great to see the sector stepping forward and speaking with a unified voice to protect the source of vital revenue for all the organizations in our sector. That’s a lot better. I also think boards are getting better. It could be my perspective on the work that we get to do here at The Discovery Group.

Boards are more diverse. Boards are more frequently valuing the importance of experience in the sector and choosing the most senior leaders in the organization. We heard far less in 2023 than we did in 2022 the dreaded face, “We don’t need somebody who knows the work. We need somebody who’s a good leader.” Also, choosing to hire leaders who’d never worked in the sector. That’s happening less and less. That speaks to the professionalism of the leaders in our sector. The leaders being hired are more diverse. It’s a very long way to go but from what I see, the trend line is going in the right direction. I’m encouraged about what’s going to come in the years ahead.

We don't need somebody who knows the work. We need somebody who's a good leader. Click To Tweet

As you alluded, there were many positive actions seen in our sector. The Canadian government appears to be increasing its support of the sector. Diversity and inclusion initiatives are blooming. We see philanthropists still giving at significant levels despite the economy’s new cycle. Is there one specific development that you think is the brightest point of 2023? Is there something that got you excited?

2023 was a great victory for realistic ambition or audacity in our sector. We had the chance to work with several organizations that were growing either in place or expanding the services they were offering. Also, a couple of organizations that were expanding out of British Columbia across the country or further across the country. What it tells me about the success of those organizations is that organizations that have an effective plan, a theory of change, and measure where they can articulate the impact they’re having with the groups they’re working with and the clients they’re serving can find the resources both in the public sector and in the private sector to do their vitally important work.

The discipline of understanding the impact you’re having in the community and being able to articulate it to funders and essential partners pays off. Our work is done well in our sector. Organizations are seeing the benefit that their services are able to expand to other parts of the province and country. When we do our work well, our plans match our reality, and our ambition is slightly out of our reach, great things can happen. It’s encouraging to see that when organizations do the work, great things happen.

On the flip side of that, there have been negative things that have happened within the sector. As a social profit leader, what are the things that keep you up at night? What do you believe to be the biggest challenges facing the sector and social profit leaders?

From my perspective, I spend a lot of my time working with boards of medium and large social profit organizations. The number one issue facing the long-term sustainability and viability of our sector is continuing to increase the diversity of perspectives around the board tables of social profit organizations. If we want change in our sector and we do want change in our sector, it starts at the level of the board.

 

There are two phrases that weigh us down. Their historical concepts and board governance that I’d love to see us be able to move away and sweep into the dustbin of history. What may be challenging is both of these phrases I’m about to share come from a good place. It’s good people trying to do good things. It doesn’t match the time or the challenge that is facing our social profit sector.

The first job of any board member is to find a replacement that’s even better than they have been. It sounds good on paper but what it replicates is that a lot of the board members end up looking a lot like me and not like the broader community. That idea that board members or boards themselves need to replicate themselves and incrementally improve their performance, ability to donate, or knowledge of the area that the organization serves is helpful.

It’s well-intended and it works aggressively against diversifying board tables, which has implications for diversifying senior leadership positions in our organizations who ultimately are donors are into these organizations. The find your replacement concept and ethos is something that we need to get to move past as a grown-up professional sector committed to reflecting the communities that we serve.

The second dustbin of history target is the phrase, “Nose in, fingers out.” The idea here is that the board should leave management the space to operate but observe and provide oversight for the organization. It’s well-intended. Several CEOs that I speak with and we’ve had on the show in 2023 like that phrase because it gives them something to say back to their board when they’re asking for operational details.

However, in our sector, what we need is not nameless faceless overseers putting their noses over the edge of the terrarium to see what the social profiteers are doing. What we need is a collection of cause-motivated and purpose-oriented champions and ambassadors for our organizations committed to uplifting the organization.

Oversight is a part of the work for sure but simply saying we’re going to keep our fingers out and our nose in assumes a historic view of charity boards as paternalistic overseeing the work of the do-gooders. That simply is not the case. If you look at the most effective organizations in our sector and the most effective clients who we get to work with here at The Discovery Group, their boards are doing the hard work of lifting those organizations. That part of it is inspiring but there’s so much more work to do.

Jumping on to another topic that we heard a lot about in 2023 was the war on talent. It was a common theme that we heard from so many of our clients at The Discovery Group as well as guests on the show. Do you think it’s going to become easier or harder to find qualified staff in 2024? If you were a hiring manager, what would you be doing to attract better talent?

A couple of things are happening there. Organizations are becoming more intricate and complex in their structures requiring more professionals to support them. The degree of scrutiny of our sector and organizations adds to the complicated nature of our org structures. It requires different kinds and new kinds of professionals. The measurement of impact which is so vitally important to funders and to test whether what we’re doing is working is adding to expenses and it’s another specialized skill that successful organizations need to have on the team.

It’s going to continue to get more and more challenging. We are still in the midst of seeing the Boomers leave a lot of the senior positions in our sector. Not just CEOs but across the leadership ranks of the social profit sector. A lot of founders are in that mid-60s or older range and are looking at what leaving the sect looks like. It’s going to it’s going to be harder to find experienced leaders ready to step into those CEO and executive director roles.

We could talk to our colleague Christoph Clodius who very ably leads our executive search practice here at The Discovery Group. Fundraising leaders in terms of salary are doing very well. The market has accelerated by some measures by 30% or 40% in 2022 alone for that senior most fundraising position in medium and large size organizations. That’s going to continue. The upward pressure is going to continue. The big lesson from 2023 is no different than the big lesson in 2022.

Effective organizations build their teams from within. In some cases, all of their leadership strength comes from within the organization. That’s a way to grow your talent and leadership base. That works if your team is diverse and reflects the communities you serve and are committed to the principles of diversity in your organization. It is to build the skills within your team because there’s no supermarket that you can go to and get a lot of these specialized skills. Those stores close like Target did years ago.

Continuing the big lesson from 2023 is no different than the big lesson from 2022. Effective organizations build their teams from within. Click To Tweet

I’m not shopping for employees at Target in 2023.

The shelves are bare but there’s another thing that’s important to point out. Alex, you and I know from folks who get to work with and people who have been on the show that there is such incredible energy coming from a new generation of leaders in our sector, new ideas and structures for how organizations set themselves up, and new ways of connecting to the community and acting with the clients they serve rather than doing things for them or to them.

It is so inspiring for me to see the new ways and waves of ideas that are changing our social profit sector. For anyone who thinks that we’re too slow in moving, there are some areas where certainly that’s true but for the most part, I am constantly inspired by the spirit and energy of the new leadership in our sector. I learned something so much from them when they came to the show. I feel a little hipper often but there are so many reasons for optimism as we’re going through this generational leadership change.

That generation leadership change isn’t just age because we’ve worked with some leaders who certainly could be thinking about the retirement age bracket who are incredibly nimble in thinking, changing the organizations, and investing in the people around them. They are doing incredible world-beating work and showing great leadership. It’s not just about age but the nimbleness of ideas and we’ve got a lot of it in our sector.

The new year is historically a busy time, especially for boards. What should chairs, CEOs, and board members be thinking about and preparing for in December 2023 knowing that January 2024 is on our doorstep?

A lot of our clients have April to March fiscal years and some of them have the January to December. There’s a lot of looking ahead to the new year regardless of the budget cycle. I would encourage people at the beginning of 2024 and as we’re coming to the end of 2023 here to reflect on what their organization is in terms of the org chart and purposes. Also, spend some time thinking about what you want it to be like and feel like. What is it going to look like at the end of 2023?

The strongest organizations that we see in the sector are ones that are deeply connected to purpose. They know why donors give to them. They know the value that they play in the community. They’re very aware of how they operate in situations of ambiguity and how they show up as an organization. For leaders and chairs, the new year’s an opportunity to reflect on how the board is showing up as a champion and as an ambassador for the organization.

For CEOs, how they are showing up for their teams and the example they’re setting for their teams to show up in situations of great ambiguity. The best part about our sector is that we are solving problems that are difficult to solve. If there was an easy solution, the private sector or government would have found a way to fund it or privatize it long ago that we get left with. The hardest problems get saved for our organizations to solve. Also, how we show up to solve those problems goes a long way.

If you’re a leader or a board member thinking about how you can make a difference in the organization you serve, be mindful of how the organization or the board is showing up to do its work. Is it open-minded? Is it focusing on being abundant rather than defined by scarcity? Is it seeking greater diversity in thought and every way?

 

Is the organization clear on what its purpose is and the value it’s delivering to the community? Also, have fun. I love this stuff. This is an elephant for me but reflecting on your purpose maybe isn’t what everybody puts on their Saturday morning list. However, I do think that this is an important time of year and a great opportunity to think about how we show up as leaders in our sector.

This next question is a two-part or fill-in-the-blank, Doug. “I want more of a blank in 2024.”

I want more profiles on new organizations and organizational leadership. Through the show, both in the early part of 2023 and the first part of the season and the fall, we talked to several leaders who are involved and newcomers to Canada. They are working in immigrant services and new Canadians. One of the hallmarks of those organizations that comes through loud and clear is their commitment to how they show up for the people they serve and their commitment to reflecting the community that they serve.

Their committee structures often look different than they do in other more conventional or long-established organizations in our sector. More profiles on what’s working in different organizational and governance structures. Not radical departures necessarily but I am certainly open to that. It’s more organizations fulfilling their organizational purpose, how they govern, and what they govern rather than treating governance as something separate from the work of the place. I want to see more of a highlight on that.

This is the controversial part. What I want to see less of in 2024 is matching campaigns. If you thinking of doing a matching campaign or you’ve been doing matching campaigns, consider if starting a relationship with your new donors or those donors closest to you with a missed truth is how you want to build long-term sustainability in your organization.

For those readers who are saying, “But matching campaigns work,” is that reason enough for starting those relationships or leading with a mistruth? Increasingly, I’m hearing donors being skeptical of 301 or 401. I saw on Giving Tuesday an 801 match. It caused me to open the email out of frustration and anger not out of belief and I did not make a gift. These gifts that are not contingent aren’t truly contingent.

If the community only gives $50,000 and the donor has already given $100,000, that donor is not taking $50,000 off the table. It’s the mistruth but it also creates a false sense of urgency for our donors. Rather than reflecting on the importance of the work that you’re doing and you’re using a buy now technique to do it which puts our donors in a transactional relationship is what makes it hard to build something more meaningful over time. I encourage any leader who is going to do a matching campaign in 2024 to think deeply about whether this is necessary and then please decide not to.

I have a question. Do you think that offering a matching campaign creates the expectation that the donor is only going to give during a matching campaign?

It makes it harder to go back but the last time I gave, I got a two-to-one match. What do you get for me now? If we look to our friends in the South for NPR or National Public Radio, they run matching campaigns that are the subject of a lot of jokes because they’re so loud and ridiculous. The matching campaign opens us up to being mocked as a sector and I don’t think it builds long-lasting relationships with their donors.

Was there a conversation or a lesson that changed the way you think or see things?

Yes, Alex. I one a quotation that I took from one of our episodes from Mike Peters, the CEO of the International Paralympic Committee. He said, “Where many people see weakness, I frequently find strength.” It’s such a powerful way of thinking about not only the work that the Paralympic movement does but it is also emblematic of the work that so many of us in the social profit sector do. There are so many organizations that live up to that quotation. It’s going to be on my whiteboard for certainly through all of 2024 and I hope well beyond.

What a great perspective to look through life. I love the work that we do. Speaking of the work that we do, The Discovery Group has grown significantly over 2023. We have employees based across the country. We have clientele internationally and we continue to expand rapidly. As the Founder and Managing Director of The Discovery Group, I wanted to ask you what is the vision of The Discovery Group and where you think we’re going to be in that vision at the end of 2024.

Alex, I hope we’re still getting to do this great work. I think about the trust that our clients are putting into our organization when they decide to work with us. I am so grateful. We get to see some organizations that are most vulnerable, and often, organizations at their strongest as they’re setting out to do big and great things.

We are growing and I suspect we will be adding and there’ll be more teammates over the course of the year. However, what matters most to me is that we’re still able to do that important fundamental work of planning governance, philanthropic performance, and helping get the right team around the table. I’m so proud of the group that we have. I feel like part of getting to build this organization has been able to hire people who are both smarter and cooler than I am. I feel like I’m elevated by the people that are on the team.

I hope that we are able to share that feeling with the clients we work with and that they feel elevated from the work and the advice that we’re able to provide them. Our sector is growing. The importance of the work that happens in the social profit sector is more vital than it has ever been. I’m so committed on a personal level and professionally to doing everything that I can and that we can here at The Discovery Group to help make organizations exceptional in what they’re trying to achieve. We don’t do this work. We get to do this work. I hope we never forget that.

 

This is the last question, Doug. What are you looking forward to?

We started in 2017 and for some organizations, we’re working on their third strategic plan. We’re going to start working on the third strategic plan with organizations early in 2024. We’ve had some clients we worked with for several years. The return engagements and working with clients that we’ve worked with before are so satisfying to see how those organizations are growing and how their challenges are evolving. Also, what’s ahead of them and how encouraging that is. I’m looking forward to getting to do more of what we’re already doing and doing it with some new people as well as new organizations as we move into 2024.

Thank you, Doug, for everything over 2023. It’s been an honor to sit by your side each week and speak with the most interesting, inspiring, and thoughtful social profit leaders in our country and around the world. You and I have both learned so much from our guests and the work that they lead. Thank you so much again for being my co-pilot. I can’t wait for all the conversations that we’re going to have together in 2024.

It’s a great list of people that we’re going to get to talk to. I’m looking forward to doing some deep exploration of mental health in our first episodes of 2024. I’m looking forward to continuing to build the community around the show. The feedback that we get and the comments that we hear mean a lot. I do this show because I love what I learned. I feel like I have a chance to have a better sense of what’s going on in the sector by talking to leaders who are living it every single day. I do appreciate the work that you do to make me sound good in those conversations. I do appreciate everything you do, Alex.

Thank you so much. Before I let you go, you’re going to cringe on this but I need you to tell our audience where they can learn more about The Discovery Group and the work that we do.

The fastest and easiest way is to follow us on LinkedIn. You see some showcasing of our team and the great work that we do there. Feel free to reach out to me by email, phone, or text. We love this work that we get to do and we look forward to doing it with new and more people in the year ahead.

Happy New Year.

 

Important Links

• Alex Wilson – LinkedIn
• Imagine Canada
• Christoph Clodius – LinkedIn
• Mike Peters – Past episode
• LinkedIn – The Discovery Group