Four insights from SXSW 2018.
Changemakers, brands & philanthropists among the 420,000 that descended on Austin
South by Southwest is a true cross-sector cacophony. The annual Austin event hosts 71,000 official conference attendees from 95 countries across interactive, music, and film. But a few hundred thousand other brands, entrepreneurs, social innovators, and media crash Central Texas each spring to capitalize on the one-of-a-kind mixture of minds and missions.
This year’s edition was my sixth SXSW. I’d previously spent years running marketing programs for B2C and B2B brands big and small in numerous industries. And had attended in the past wearing various hats. As I reflect on SXSW 2018 – this year through a much different lens – I saw shifts in the landscape and four key insights emerged.
1. NONPROFIT & FOR-PROFIT LINES CONTINUE TO BLUR
Between the social enterprise movement and emergence of for-profit brands embedding social impact into their work, much of the private sector is inching away from shareholder value at any/all costs. At the same time, more nonprofit innovators are realizing that a pure charity model – relying solely on donations – is a tough way to achieve sustainability and social change.
Ubuntu is a 501(c)(3) based in Austin, working to build stronger communities in Kenya. They operate a water business, own a cafe for tourists, and roast coffee to raise money for their mission. But most notably, they’re building a fashion line called Ubuntu Made – featured globally in Whole Foods – that employs more than 40 full-time sewers and 100 full-time beaders. And this isn’t just merchandise they sell on the side. They aim to become the first global fashion brand to come out of Africa. To achieve such a grand vision, they lead with good fashion first and follow closely with social impact.
Similarly, Ride Austin is a wildly popular rideshare app going head-to-head with Uber. When the Silicon Valley giant arrogantly and abruptly pulled out of town due to ordinance disputes, the community rallied a few million dollars and built a platform of its own. With more than 2 million trips in their first year – and a set of unique features like female driver mode – you might not otherwise know (or care) that Ride Austin is a nonprofit. With $250,000 worth of proceeds going back to the community so far to support a number of local charities, sure, it’s a feel good to the consumer. But first and foremost, it’s an excellent product that offers the same benefits as the for-profit alternatives. The social impact is but a cherry on top.
On the other side of the coin, Gridmates is an Austin-based privately-held company that relies on a donation model to aid some of the 40 million people at risk of energy poverty in the U.S. On the surface, Gridmates seems like a nonprofit. But it’s not. With a tagline of "donate energy and improve people’s lives", this for-profit startup is tackling the seventh UN Global Goal: affordable and clean energy. And proving along the way that tax-status isn’t a prerequisite to social innovation.
2. WE NEED TO FACILITATE MORE CROSS-SECTOR DIALOGUE
One of the highlights of SXSW was a "VIP" dinner we felt privileged to attend. Held each year literally underground downtown in a subterranean private dining room, it was a gathering of fascinating thought leaders from across the country and across sectors.
Attendees included entrepreneurs, civic leaders, charities, and folks from the State Department, PayPal, the mayor’s office, and Comcast’s startup accelerator in Atlanta. The full-table conversation ranged from technology to politics. And it struck me deeply just how powerful it is to gather bright minds from all walks of life to dive intimately and immediately into difficult subjects.
American cultural anthropologist Margaret Mead said it best:
We know that complex social problems require cross-sector collaboration. So it seems obvious that the first step in forming these alliances is to simply foster more diverse conversations. Sometimes even with no pre-set agenda, like this dinner. Intimate, spontaneous "mind melds" have led to some of the greatest inventions and start-ups in history. It’s this type of forum in and of itself that sparks and drives social innovation.
So I wondered – and proposed to the group – how do we galvanize the world’s best thinkers like these to more actively engage in social change?
Sure, there are platforms like Taproot Foundation that allow service professionals to do pro bono with causes they care about. And entities like Ripple Works that partner world-changing ventures with world-class experts. But part-time skills-based volunteering at an individual level simply falls short.
The world needs now, more than ever before, true cross-sector collaboration. Diverse, full-table conversations like this in every city, every night. We need to see more corporate brands joining at the hip with social sector organizations and government ventures to boot. And until basic needs are met for every person on the planet, we need more brain power working collectively to end human suffering. Period.
For real-world collaboration, we’re fond of Austin’s Vuka Collective – an ecosystem of companies aimed at enriching lives. The social enterprise fosters cross-sector alliances through co-working at the Impact Hub, events at Gather Venues, and personal and professional development at Wake Up. Vuka produces collaborations of change-agents who simply know how to get things done. Like with their Social Impact Accelerator which brings human capital building blocks together to tackle challenging community issues like affordable housing and workforce development. With such a unique mix of models, Vuka is well on its way to helping people "live and work awake".
3. THE CONTRAST IS STARK BETWEEN BRAND PURPOSE & BRAND ACTIVATIONS
Stand around the Mighty Ally soapbox for a moment, and you’ll hear us talk about why and how companies can find profit through purpose – and in the process, create more meaningful brands. But stand on any street corner at SXSW and you’ll see countless woeful attempts at publicity stunts and brand activations, both aimed at creating buzz.
The contrast was palpable.
Worthy of note: Belkin is an example of a company living out its purpose by combining corporate assets, business opportunities, and social need to generate true shared value. Belkin CMO Kieran Hannon was honored at this year’s Valiente Awards alongside Mighty Ally where we learned more about their efforts. The American manufacturer of consumer electronics has more than 1,000 employees and integrates its Belkin Good program into every facet of its business. From its founding in 1983, it has used social sector partnerships (like schools) as a breeding ground for product development in networking equipment. Or environmental partners to drive innovation in home energy management, recycling, and alternative energy.
Worthy of a pass: almost all brand activations at this year’s SXSW. HBO’s Westworld theme park recreated the town of Sweetwater. Google built a Google Assistant Fun House to showcase their voice technology. The Viceland lot promoted free stuff and baby goats. Yes, really. Millions of dollars wasted, and very little motivation beyond publicity and profit. Some brands were slightly less self-serving and attempted some level of social good. Like Bumble, the female-first social networking app, that created the "Empowering Connections" experience with content around gender equality and inclusion.
Elon Musk spoke at this year’s SXSW and recently set the tone for how brands can live out a purpose and find media value at the same time. After Hurricanes Irma and Maria crushed the island of Puerto Rico, Tesla stepped in to help rebuild the devastated electrical grid. What a logical "brand activation" that garnered more press than any stunt in Austin ever could (474,000 search results on Google alone to date). In covering the story, Inc. Magazine hit the nail on the head: Elon Musk isn't just talking. He's doing.
4. BUSINESS-MINDED DONORS DEMAND ROI
At the same time a majority of corporates are still using archaic philanthropic aid models and publicity stunts, savvy donors are starting to turn the tide. A growing number of funders with a business mindset now demand a return on investment beyond vanity metrics in an annual report.
Austin is a wealthy and dynamic city. Through conversations with its discerning donors, it became more apparent that forward-thinking philanthropists are getting tired of giving money, only to be asked for more the next year. And the year after that. Progressive donors are starting to expect more sustainability and return for every dollar, whether that’s through innovative business models like the ones mentioned above or by investing in capacity building support.
ROI is a such an expectation in for-profit business that it’s almost a mocked cliche. So we were pleasantly surprised to hear how many funders at SXSW mentioned ROI specifically in conversation (unprompted), as it relates to major financial giving. And there are shining stars in the industry that focus on demonstrating return for the philanthropic dollar.
Vision Spring has distributed nearly 4 million pairs of affordable eyeglasses to impoverished communities since its inception. But they don’t make support appeals based on emotion alone. A quick glance at their website shows that it’s a business decision – uncorrected vision results in a $202 billion loss to the global economy, glasses can create a 20% increase in monthly income, and every $5 donated supplements earned income to provide a pair of glasses to someone earning less than $4 a day.
In another example, Jeremiah Program – a national nonprofit with housing and education facilities for disadvantaged mothers and children in Austin – partners with third-party research agencies to validate its social ROI. Their impact page is littered with real-world data. And they even co-host an event for the nonprofit community called ROI for Social Services – along with Target Foundation and Wilder Research – where they openly share their ROI study. Their goal is to encourage other nonprofits to think critically about the need to collect accurate data, identify the net cost of their programs, and measure the organization’s impact accurately. Kudos.
SXSW has changed drastically since I first attended with just a few thousand others some 15 years ago. And I know it had already changed greatly since 700 people showed up to the inaugural conference in 1987. With the addition of the social impact track and inclusion of notable social changemakers like Melinda Gates in recent years, here’s hoping the coming editions bring even greater focus on creating a better, more equitable world.