One month, four events, five key takeaways.
Observations from Segal, ACL Festival, Opportunity Collaboration & SOCAP
We aim to be a learning organization. And as relative newcomers to the social sector, we put a lot of emphasis on continually getting out into the field for inspiration and collaboration. So our minds are racing after spending most of October at four distinctive convenings around the world.
We first attended the Segal Family Foundation annual meeting in Nairobi – an intimate community gathering of donors and doers focused on sub-Saharan Africa. Then we activated our nonprofit client Ubuntu Life at Austin City Limits Music Festival in Texas – a public-facing channel to exercise the brand partnerships side of our model. The next week, we attended Opportunity Collaboration in Mexico – a four-day “unconference” aimed at tackling poverty and injustice. And we wrapped the month at SOCAP in San Francisco – the event one publication dubbed the “Lollapalooza of impact investing” or “Burning Man meets Wall Street.”
As different as these four events were, we detected a number of common trends and themes. Here are our top five takeaways.
Social innovation and local leadership are on the rise in Africa.
A Nigerian panelist at SOCAP put it plainly: “Africa is sexy right now.” With all due respect to the continent’s myriad challenges, it’s refreshing to see growing optimism about this unique land and its resourceful people. And by all accounts, there’s more momentum and focus than ever before on the social innovation and local leadership from Africa for Africa – as it should be.
Segal Family Foundation hosted a pre-conference showcase for their African Visionary Fellowship program – an effort to build the capacity of and funding for local leaders. The Segal team had wisely diagnosed that western-led organizations in the portfolio traditionally grew twice as fast as those led by Africans, so they launched AVF as an affirmative action play aimed at disrupting this paradigm. And we couldn’t be more impressed with the talents and traction of their first two cohorts of changemakers.
For the first time, the Africa@SOCAP Lounge gave attendees from the continent a home for collaborating amidst the masses. While there existed a bit of “otherness” in this setup, it was at least an attempt at inclusiveness and we were encouraged to see a number of African panels and speakers. Meanwhile at OC, there were round tables about investing in African changemakers, reviewing the African narrative, and discussing the inherent strengths of the continent. There was hearty debate and dialogue, and one session ended with the crowdsourced creation of an African changemaker and entrepreneur WhatsApp group – a positive step toward developing a collective voice and support network.
While emerging markets now account for 83% of the global population, they still only receive 11% of private equity investments, according to Lateral Capital – a mission-driven private investment firm with offices in Lagos, Nairobi, and Johannesburg. But we saw across conferences that more impact investors and foundations are building teams and programs in Africa. This proximity is helping find, nurture, and invest in local leaders. Like Mercy Corps Social Ventures, with its first local team member now on board, based in Kampala.
We noticed that more and more changemakers are combining western + local leadership on a single executive team. There was even a panel on the subject at Segal – “It Takes Two: Fueling Growth Through Shared Leadership.” Organizations blazing the path in joint leadership include Moringa Connect in Ghana and Building Tomorrow in Uganda, along with our clients Ubuntu Life and Lwala in Kenya.
Workforce development and human capital are the hot topic.
As we noted in the October Mighty Five, the importance of investing in workforce development has caught the attention of global leaders like the Gates Foundation. In its second Goalkeepers Report, the Gates assert that human capital (including education, health, and infrastructure) in sub-Saharan Africa is the single biggest determinant of progress toward the UN Sustainable Development Goals. This theme was evident throughout the month’s events, mostly at SOCAP.
In a session called “Africa’s Youth Explosion and What it Means for Employment & Opportunity,” panelists discussed solutions for this sobering fact: more people will join the workforce in Africa over the next 10 years than in the rest of the world combined. Early leaders in the space include tech bootcamp Moringa School in Nairobi and Kampala, which pointed out a $16B annual spend on education in Africa. And while it takes university grads an average of 4-5 years to find jobs in Kenya, Moringa alum land them in about 28 days. Rival code school Andela has raised $81MM over five rounds of investment (including backing by the Chan Zuckerberg Initiative) and is now the top employer in Lagos with 650 developers on site. Then look no further than recruitment and hiring tech companies like Nairobi-based Shortlist as evidence that workforce development is becoming a market in and of itself in East Africa.
The topic is becoming critical in developed countries as well, with another session at SOCAP called “Workforce Development in Emerging Markets and the U.S.” In America, tech platform LaborX has become “the LinkedIn for the linked out,” helping marginalized candidates from nontraditional training programs land gigs at prestigious companies like Facebook and Amazon. And just this Monday, Salesforce Ventures announced a partnership with Lumina Foundation and Robin Hood to invest $15MM in for-profit education and workforce development companies with the potential to alleviate or eliminate poverty.
There’s a place for business in social change.
Despite tidal waves like BlackRock’s announcement in January and conferences such as SOCAP focusing for years now on money and meaning, there still exists a pervasive tension between sectors on how, when, and why for-profit business should be involved in social change.
But we saw first hand this month the power of cross-sector partnership with Ubuntu Life and the Austin City Limits Music Festival. For this small but growing changemaker, having a (free!) activation amidst 80,000 fans was a huge boon for a nonprofit business focused on conscious consumers. Big brands paid in the hundreds of thousands to be a sponsor at ACL, which shows the value corporations place on engaging consumers where they play. To Dan Pallotta’s point in his rousing TED Talk, maybe we in the social sector could and should learn a thing from business.
The Segal annual meeting held a fascinating session called “The Business of Doing Good” with our friends at Unreasonable East Africa along with accelerators Anza in Tanzania, Ongoza in Kenya, and the African Entrepreneur Collective working with refugees in Rwanda. We couldn’t help being inspired by their collective impact in job creation and equality. But we also couldn’t help noticing some unfairly pointed assertions from one traditional NGO in the audience about these accelerators and whether or not building for-profit enterprises had a direct enough impact on poverty or were the right solution for solving complex social problems.
While no single sector or solution is enough, the power of big business is unquestionable in this realization. The most profitable company in America is Apple, headquartered just a few miles from the SOCAP venue and cranking out $229B a year in revenue. The entire economy of Uganda – where we live and work – is barely $26B in GDP. Yes, a country that’s home to 40 million people in East Africa is nearly 10 times smaller financially than a single company in the States with just 123,000 employees. So it’s tough to argue that social sector efforts will go in vain without the sheer scale and level of expertise in big business playing its role too.
Scale still dominates the conversation, but shouldn’t (yet).
One big theme all three conferences shared? Everyone everywhere is looking to scale. NGOs and social enterprises often believe that more funding automatically means more success and growth, so they seek grants, equity, debt – you name it – in an effort to expand. Similarly, changemakers often think government partnerships are the end-all to scale. There were sessions at both Segal and SOCAP on the topic – “Cutting Through the Red Tape: Partnering with Government for Expanded Impact” and “Government Partnerships: Holy Grail or Impact Mirage?”, respectively.
But both scale conversations – funding and government partnerships – focus attention outside the organization on factors largely out of a changemaker’s control. So NGOs and social enterprises are by and large still not actually scaling. Get this: between 1970 and 2007, more than 200,000 nonprofits were started in the U.S. and only 144 hit $50MM in revenue (a relatively modest size when aiming to eradicate massive humanitarian issues, especially considering there are 18,000 for-profit businesses at $100MM or more).
So why aren’t more changemakers growing? In our belief, there are two big (missing) puzzle pieces. First, most organizations simply aren’t healthy (and some don’t even know it), which we’ve written about extensively here. Second, a majority of changemakers don’t have strong positioning, which Kathleen led a workshop around at Opportunity Collaboration based on her popular blog post.
With org health and positioning in place (first and foremost), changemakers are then ready for increased funding and government partnerships. And as we saw at SOCAP and Segal, there are organizations scaling and forming government partnerships successfully, like Sanergy in Kenya and WSUP which works with water and sanitation in six global cities. In our view, these organizations were able to succeed with steady funding streams and government relationships because they were a healthy business to start with, and had solid positioning to boot. But without those two critical building blocks for scale, organizations are putting the cart before the horse and thousands of changemakers slog along well below that $50MM mark.
Data and stories both matter, and work together to break through the noise.
A conference and event circuit like this month’s tour brings to light many of the 10 million NGOs and social enterprises doing commendable work. It also reinforced how many changemakers sound the same. And how few use the power of both data and stories to break through the noise.
Impact data is certainly important in order to demonstrate success. But if you’re a funder or donor or media outlet looking in from the outside, changemakers are often hard to tell apart when we all tout the same types of numbers. Joseph Stalin reportedly said that the death of one person is a tragedy; the death of one million is a statistic. Morbid, but sadly true. Similarly, Mother Teresa famously said, "If I look at the mass I will never act. If I look at the one, I will." This concept of psychic numbing is one that changemakers should consider when raising awareness for their cause – data without human connection can often fall on deaf ears.
Stories matter for brand engagement. Nowhere was this fact more evident in October than at Austin City Limits. The “ACL Cares” area at the festival was littered with nonprofits – even big international NGOs like Oxfam and ONE Campaign – attempting to reach consumers using booths and signup sheets. But most attendees walked on by. With Ubuntu Life on the other hand, our client brought in members of their team from Kenya – most notably the Maasai maker mums who hand-beaded products on site as they interacted with consumers. This activation space away from the typical nonprofit noise gave the maker mums the chance to forge real connections with supporters, tell their story directly, and explain their work.
Even in routine settings like a conference floor, it’s painful to hear and see an organization working tirelessly in a community to help its beneficiaries, but struggle to articulate what they do, much less what makes them unique. The first entrepreneur I met at SOCAP launched into a pitch about their last-mile blockchain microfinance data aggregation solution and after two minutes I still had no idea what they did (if he would have said AI, I would have looked for hidden cameras). Meanwhile, at the Mulago Foundation happy hour, Managing Director Kevin Starr told attendees to inform him if grantees in the room couldn’t articulate their mission in eight words or less. They all could, and well. What a stark contrast.
One of the best examples of storytelling we saw this month was the 2018 Rising Star Award winner at the Segal annual gala. Willie Mpasuka is the founder of Rays of Hope in Malawi, and by the time he left the stage to accept his award there wasn’t a dry eye in the room. He explained his work tangibly, showcased the impact data clearly, but more importantly told a powerful personal story of turmoil then triumph. And his meeting calendar was booked back-to-back the next day. See more of his tireless efforts below.