For many years, nonprofits have faced a double standard. We want them to do great things, but we don’t want to pay them to spend money on branding or marketing or salaries. So they make do with what they have, or seek out pro bono partnerships that often take a back seat to paying clients.
Gratefully, in recent years, there’s been an awakening. Donors understand the tie between brand communications, engagement and impact. Companies recognize the business case for doing good. More than occasional feel-good side projects, shops are investing wholeheartedly in the social sector, building specialized knowledge and expertise to help nonprofits succeed.
Matthew Schwartz, Founder and Executive Director of Constructive, has seen the evolution, and is at the helm of such a shop. He joins us to talk about nonprofits’ impact on the economy, the nuances of value-based business development and the need for a solid book, expertise and focus to win the business you want.
Owner Summit is just around the corner. Join us.
Carl Smith: Hey, everybody, and welcome back to The Bureau Briefing. Today, I've got a good friend of mine coming by the Bureau studios. He is the founder and executive director, oh yeah, ED, you're going to love that one, of Constructive. Now, the thing I love about Constructive is they are a social change design firm, and that's what we're going to talk about today. Please welcome to The Bureau Briefing, Mr. Matt Schwartz. How's it going, Matt?
Matthew Schwartz: It's going well, Carl. Thank you very much. Excellent to be speaking with you.
Carl Smith: Well, now, we've known each other for a while. We've seen each other a bunch of times. The one thing I know about this episode is you're not going to pull any punches. That's what I love is that you, like a few of my other friends, are just a truth teller, man. How you see it is how you're going to say it, so I'm excited about that.
Matthew Schwartz: Thank you. I've actually ... I have to say, I've learned to moderate that to some degree, so I think I've gotten even better in polite company, but yeah, look, I think it's important to be pretty straightforward and be honest. That's what expertise is about.
Carl Smith: Well, and I know the buttons to push, so I'm going to go for it. We'll test your theory that you've held it back there. Here's how I want to kick this off. You're a social change design firm. You focus on betterment companies, as you see them, right?
Matthew Schwartz: Yep.
Carl Smith: Tell me about the start of your company and how you got into this concept of social change.
Matthew Schwartz: When I started, first of all, we weren't Constructive. We were Matthew Schwartz Design Studio. I was like a lot of folks, who just decided to hang out my shingle. I got started right at about the advent of the commercial Internet, as far as my career, not when I started what is now Constructive. Right around 2000, after about five years of working at some agencies and digital places ... By agency, I mean big ad agencies. I went out as Matthew Schwartz Design Studio, wanted to work and do my own thing.
At that time, while I grew up a punk rocker and someone with pretty strong opinions and social values and that sort of thing, doing the work was unlike some folks, maybe, in the space. I didn't exactly start explicitly to do that. There was some of that around, just because of the client work.
Over the years, we just became more and more focused, which I think is an important part of being an effective agency. Doing the work we do, and becoming Constructive, it's like the two roads met, after diverging. I think my values and my background and what I care about, in terms of what we put out in the world, and that means the craft of what we do and the quality of it, as much as it does what mark it leaves in the world ... All that matters to me.
As we just got more and more clients, who were doing things that we found very interesting and stimulating, and we get to learn a lot about the world by working with these experts, you just find that the culture and ethos of being an agency that does this kind of work is incredibly fulfilling. The people that, ultimately, you wind up attracting to work here, and that sort of thing, have a similar set of values and ethos and want to accomplish these kinds of things at the end of the day, when the work is done. That's really how we became as focused as we are, and now Constructive exclusively does brand strategy and experience design for nonprofits, foundations, sometimes with businesses that have a social angle, et cetera.
Carl Smith: Okay, that was going to be my next question was social change, as a definition, so nonprofit, not for profit, and then possibly traditional businesses, but is it that they have a certain effort that is for the betterment of the community, or is it their personal product is in that range?
Matthew Schwartz: Yeah, we have not ... The first thing that you're mentioning is more CSR, right? Corporate social responsibility type stuff.
Carl Smith: Yeah.
Matthew Schwartz: I have some interest there. To be honest, we haven't done any CSR-type work. I do have some interest there, but I do think that you have to be a little careful about it, in that some of these things can be done as a way to gloss over maybe some other potentially unsavory behavior. We wouldn't jump on it, just because it was the opportunity to work with some organization or company that we don't actually stand behind most of what they do.
For me, a social enterprise or a for-profit entity, whose goal is clearly for the betterment of society ... When you think of philanthropy and for the social good, we have interest in that. The way I just talk about it or think about it is I don't really care about your tax status. That's why we don't say we work with nonprofits. We do it for SEO, because you have to, but your tax filing status ... Nobody says, “I work for an S-corp,” when you get introduced, but people somehow say, “I work for a nonprofit.” You should be saying, well, not all nonprofits are created equal. They all do very different types of things. We specialize in certain types of them, and so I think if there's a for-profit working in areas that we find really interesting and are aligned with what we do, absolutely, we're very into that, because it's just a different way to approach solving the same kinds of problems in the world.
Carl Smith: You're saying there are companies out there that would use a social good effort as a public relations strategy?
Matthew Schwartz: That's right.
Carl Smith: To try to do a little sleight of hand around the CEO getting caught doing the no-no?
Matthew Schwartz: Yep, yep, yep, it's apparently, apparently. It's sad, but true.
Carl Smith: That's a whole different business model. I do have friends who are in that model, as well, so we won't go too far down that path. Let me ask this question, then. When you go about selecting clients, what does that look like? Is it inbound? Is it outbound?
Matthew Schwartz: Yeah, it's a range of things. I mean, we've been around long enough now. We've been around for 18 years, and we get a good amount of inbound. We're fortunate enough, at this point in time, to be able to be more selective about the inbounds we get. We actually have found that we have to, out of necessity, because if we respond to ... I don't mean get back to someone. I mean actually develop a proposal and such, to everybody that is in opportunity, it's not only distracting. It eats up resources.
Sometimes things just aren't a good fit, and it's usually not because of the mission they're on. It's one of two things. It's either the scale and nature of the project or the area in which they focus. There are other groups/companies that focus a bit more in that niche, within the social impact sector, that were just maybe, we'd feel, a less appealing option. That's the inbound part. We have a method to qualify folks, where someone here takes all those calls and gets a sense of whether there's a fit, and we use that as an opportunity to decide, should I, or should our director of strategy, Lexie McGuire, make time to have a call and do that?
The other side, there is a good deal of outbound. We've been pretty active in content marketing for the better part of five or six years. I write an awful lot. It's part of our company culture that I actually incentivize people with time off if they write insights for our blog, so we have a lot of content published. We do events. We do workshops. We work with organizations, and those ... We've gotten some really fantastic client relationships. In fact, our biggest one right now is specifically because of a free workshop that I gave with the Foundation Center on brand experience design.
It's definitely a mix of those types of things, and now we're starting to actually maybe find something that your good friend, Blair Enns, would say, “Find a top 20 list of folks you'd really like to work with,” and maybe be proactive about a little bit of that kind of very selective outreach. We've started doing a little bit of that, as well.
Carl Smith: When you're doing that, is it more about the feel of the company, which you know from the outside, or do you have a set of criteria that you're evaluating possibilities with?
Matthew Schwartz: Do you mean in any situation?
Carl Smith: When you look at that top 20, specifically.
Matthew Schwartz: Oh, yeah, I mean, look, they would be ... I think they would fall into a couple categories. This is a relatively new thing for me, so it's probably not as well fleshed out as some of our other stuff, but-
Carl Smith: That's why I'm going for that.
Matthew Schwartz: Nice.
Carl Smith: I want to see you trip.
Matthew Schwartz: Yeah, yeah, no, it won't happen. I'm a game day player, Carl. You should know that.
I think, first of all, it's going to be an organization in an area that we have done a lot and proven quite a lot, in terms of our expertise and results, and the organizations we're looking at are at the pinnacle of that subsector within social impact, right? Those are folks. You could say, the Bill and Melinda Gates Foundation ... Hey, if you're listening, call us. They are an organization that we'd love to work with, and we've done a lot in related areas, or there might be some research think tank policy places. That's one.
Another would be organizations in an area that we actually haven't done a whole lot in, and we want to accrue some additional expertise. What we can say is, “Look. We are a clearly established, premium organization, and we're very protective of our time and effort. We are really interested in the kinds of work that you're doing, and we're hoping to do more in this area, so can we find an opportunity? There might be a small one,” et cetera.
I think the third on, and I actually did this with a very well known publication and media source in our space, is to contact hubs of connectivity that aren't just a voice and a place, but actually have a really interesting thing, so a publication. Let's say, in this case, that's what it is, having a publication where we can say, “Look. We actually are looking to do some ... We'll offer to give you free assessment time,” rather than us spinning our wheels creating a proposal for someone from an inbound that winds up being a waste of time, and the data backs it up, that a lot of these that come through a Google search are not as qualified as we'd like. We've decided to carve out 20% of our time that goes to responding to these. By responding to less of them and speaking to good folks like you, and an arena like that, can not only lead to interesting work and relationships, but it also potentially provides a platform, for example, for us to share the thought leadership pieces within their network, so that's a good play for us, as well.
Carl Smith: While you're looking at this, and in my experience and some other shop owners, I think maybe we're approaching it wrong. We would always want to have a feel good project, something that made us feel like we were helping the world, while we were also working with the banks, and all that kind of stuff.
What we always found was, and maybe it was the way we went about it, they never had any money. I know that you're a guy, who drinks pretty fine wine.
Matthew Schwartz: Oh, and whiskey, whiskey, bourbon, bourbon, Carl. I keep my wine palate to the $12 and below stature.
Carl Smith: Do you see how you came at me?
Matthew Schwartz: Yeah, yeah, yep.
Carl Smith: I thought you were all cool. I thought you were all cool, and now you're coming at me.
Matthew Schwartz: Yeah, and I mean, that's right.
Carl Smith: How ... I mean, maybe it's the market you're in, right? You're in New York, but do you find that the social change organizations are trying to get a discount from you, or are they coming in funded?
Matthew Schwartz: Yeah, and so my take on this ... I think it's a complicated question/dynamic, and I'll try to answer it in a handful of ways. The first is to say that I think if you're an organization who's looking to do one of those feel good projects, and I should say, one of the great things about being here is every day is feel good day at Constructive, every day, right? We're doing stuff that's like that.
Carl Smith: Are you hiring? You're hiring, aren't you?
Matthew Schwartz: Exactly! Do you see what I did there? One of the things is that, by doing the work more frequently ... If you're someone who's just trying to bulk that kind of stuff on, it's going to be very hard for an organization, unless they're a really, really well established org/firm, to attract that kind of work, right? I mean, we live in an era of greater specialization. If you're an organization that does a lot of a software as a service plays and other things, and you get an occasional nonprofit job, it's probably not going to be one of the bigger, more established players, with a big bucket of money.
If a client is well funded, they're more likely, obviously, therefore to be looking for folks, perhaps like us and like others, who do bring a proven level of expertise and understanding. I think there is some truth, but not as much as people like to say, that nonprofits are very different than other organizations in so many ways. Yes, they have considerations, but the truisms of good work apply, right? What you do bring is an understanding of internal dynamics and understanding of the issues they might work on, an issue area of specialization, et cetera.
With us, over the years, I can just say the second part of that answer to that question is that we're in a spot, where we get less of those inbounds from clients who don't quite have the funds to afford what it costs to hire us. We are a firm in New York City, so that does make us a bit more expensive, but we're also a pretty high-end shop. Getting good people to do the quality of work we do ... It costs here, internally. As we continue to establish who we are, more folks who have big, ambitious projects, come to us.
There's a third part to it. I think the third part that, maybe, folks who don't work in the sector as much, they may not understand, is that, first of all, the nonprofit sector, over the last 10 to 15 years, is one of, if not the fastest growing sector in the U.S. economy. Yeah, it's tremendous. The growth, over a decade, I think, is well over 25%. I forget. The numbers are very high; 25 I might be radically understating it. I have researched this. I haven't thought about it in a while, but look, it makes sense.
You, first of all, have a huge amount of wealth concentration that leads to all sorts of people creating family foundations and other sorts of foundations that want to do good work. You also have a shrinking of what the government sector is taking on to help communities to help address systemic problems, and there is a need for that. If you look in Canada, actually, you will find that even adjusted for the size of their country and economy, the nonprofit sector there is much smaller. It's much smaller, because government plays a much more proactive role in addressing and doing a lot of these things, which is supported by taxes.
You have many more nonprofits. It is a more competitive field, within the nonprofit sector. You have many more entrants, and you have players making big bets, well funded, and I think there is an awakening. It has been an uphill battle, but there's an awakening and an understanding that, in particular, when it comes to digital, you have to be ambitious as an organization, that really basic vanilla, and even substandard work is undermining the credibility of an organization, its ability to have impact, and that it is one of the biggest, most widely visible representatives of an organization, not being its website, and that those websites are now connected to all sorts of backend systems. They again include reporting and grantee activity and private hubs and all this kind of stuff. It's a lot of work. To do it well, I think people are understanding that.
I find that, sure, I bet they don't have the budgets that people like General Electric have or even other significant corporations, but I bet that a lot of folks who work with for-profits find that smaller and midsize companies like that are always doing ... They're also doing some more stuff, right? They don't have as much money. They're trying to ... You know. I think it has to do with size and scale, as much as it has to do with the sector, and it has to do with a willingness and a perspective on how important the work that we do with client is, to helping them accomplish their goals.
Carl Smith: This is eye opening. Thank you. I am sitting here also remembering being told once, for a charity, I won't say who it was, that the work looked to polished, and everybody was going to be worried that they spent too much money.
Matthew Schwartz: Yep, that's an old one. You don't hear that very much anymore, thankfully.
Carl Smith: Well, good.
Matthew Schwartz: You really don't. There's no doubt that that was something people talked about a good deal, but there has been ... For those who are not aware in the sector, there has been a very significant increase in awareness on the role of strategic communications and the value of brand within the nonprofit sector, I'll use the word nonprofit there, over the last less than a decade. Let's say decade. There have been some very important books, one called The Brand Idea, that does a lot of good work digging into the value of a brand, as an intangible asset that can help an organization.
Strategic communications, through organizations like The Communications Network and others, has become a more significant part of what the sector does. It's still lagging behind the kinds of conversations you hear in the for-profit and business world, but there's no doubt that there's been a dramatic change, and people expect that. They want it to look good. They may not have the funds they want, but they're not thinking, “We shouldn't spend money on this.”
Carl Smith: What about working with these organizations themselves? Do you have extra hoops you have to jump through, legal, or anything like that?
Matthew Schwartz: Yes, I would say legal, for us, not so bad. We do a good amount of work with universities, and I will say universities can certainly be a bit more so. It definitely is, again, more like a bigger company would have the same thing, where they'd do just a little harder vetting.
Carl Smith: Right.
Matthew Schwartz: Outside of that, the hoops that you have to jump through, and I wouldn't want to necessarily phrase them that way, is that, first of all, nonprofit organizations can very often come to group decisions through a consensus. It's just the nature of the sector, and it's the nature of a lot of the folks who tend to work there. That has great strengths, and it can make for very collaborative work, but it also can slow down some of the process, or it can lead to not great decisions, based on folks who weren't necessarily involved, having input, but not understanding all the thinking that led to a certain deliverable or point.
Carl Smith: Right.
Matthew Schwartz: I do think there certainly is that. The other, probably, big one that I would say is, unlike with most businesses, though I'm sure there's a corollary, you've got things like boards and trustees. In certain organizations, the board, which is a very important part of establishing a strong nonprofit ... Some boards play more active roles in these types of engagements, in digital and design and brand engagements, but they play an active role, without being active participants. There does tend to be a little bit of a firewall, mostly because, I think, board members' time is deservedly protected, and they are not full-time involved, but they have very heavy influence. They may need to approve things. The board very well may be family members, if it's a family foundation, so that can be a hurdle, but I think there's a million examples of that in the for profit world, as well.
Carl Smith: All right, so what type of regular company would you have trouble turning down? What if the NFL comes knocking?
Matthew Schwartz: Ha-ha, ha-ha, you know I'm a big Giants fan.
Carl Smith: I heard there might be a game the first week of the season.
Matthew Schwartz: Oh, right, Mr. Jacksonville!
Carl Smith: Some upstart defense with a strong running game.
Matthew Schwartz: I know. I know. I know. All of sudden, Blake Bortles can kind of throw the ball. Look at that.
Carl Smith: Hey, we're going to give you three extra tries. I'll tell you that right now, but what would you do?
Matthew Schwartz: And Fournette is quite a beast.
Carl Smith: Yeah, and having Tom back, having Tom back. We're glad he's there.
Matthew Schwartz: So-
Carl Smith: But what do you do if the Giants show up and say, “We need you to make an exception. We've decided that we want to go with Constructive to do this work”?
Matthew Schwartz: Man, you just made it harder by ... When it was NFL, it was a much easier answer, because I have a lot of problems with the NFL. When you made it Giants, and I do believe Giant Blue, that made it harder.
Look, I have to say, and I have done stuff a little bit like this, I would in all, like ... I don't know. Man, that is a tough question, like-
Carl Smith: I didn't even get to ... I was going to make it the Jets, just to piss you off.
Matthew Schwartz: Ah, no, that would be easy. No, it's ... Look, I can't answer that question, because it's-
Carl Smith: Yeah.
Matthew Schwartz: [inaudible 00:22:42], but I can answer the question more broadly. That is such a difficult one, and it depends. There are some things that could be a ... That's a personal love, right? Just like Greg Hoy and Warren got to do the whole Rush thing, right?
Carl Smith: Absolutely.
Matthew Schwartz: You know, come on. They were very pleased with that, but that also played into stuff that they were interested in, as far as their business. For me, something like that, I could see making a bit of a personal thing, but I would be wary of what distraction it would bring to the people in the studio, and what it would ... Just because it's really interesting to me doesn't mean it's interesting to everyone else. I do think, from a culture perspective, that's important. I don't ... You wouldn't do it just to make it to be a grab for cash.
That brings me to the second part of this, which is I have absolutely turned down, both in the nonprofit world and businesses who have come to us, and we just say, “Look, this sounds interesting, but I don't think we're a good fit.” To be honest, in the business side, it's mostly because I know we'd be wasting our time pitching that, because we don't have the book to show it, but we don't have the book to show it for a reason, and that's because it's not what we do. I have been approached by organizations, whose political or social cultural leanings I do not agree with, and those are very easy to say no to.
Carl Smith: Yeah, without a doubt.
Matthew Schwartz: Yeah, look, what that gets to ... What you're asking, and what that gets to ultimately, is it is about focus, and because I am a designer originally, but now have spent the last decade of my career doing brand strategy, maintaining focus is so important. It's what I preach when we try to develop brand strategies and positioning for our clients, because mission focus is a really important thing in the nonprofit sector, because when you want to help the world, it's very easy to fall into mission creep and take on new programs that may help, but they're not actually core to what you do. I think we live in an era of specialization, and I think firms need to adhere to that. I think many do.
Carl Smith: How is competition in the space?
Matthew Schwartz: Much bigger than it used to be.
Carl Smith: Because there's more work.
Matthew Schwartz: You're right. Right, with great growth comes a rush of people looking to help service it. I think it's a bit more than that, too. I just think that there are ... There's a wave, a generation of folks who want to be doing this work and have started agencies like that. I can say, for sure, that 10 years ago, there just were not as many firms who can do good work.
What I would say about competition is I think it's two things. This actually gets into how I think we specialize, and back to your question about how do you vet and make decisions? I think that there are a lot more firms doing this work, because of the growth in the industry and a sincere interest in doing it. I think that the tools for doing this kind of work, for doing digital work and doing it well, have made it much easier for folks, who might not have had as much expertise as you needed, let's say, 10 to 15 years ago, to do really great work, right? I just think there's a lower barrier to entry to just be a practitioner.
I think that that is across the board for everyone, and that gets me to the third point, which is what that means for me, which is what we've always, not always ... What we've been pushing to do is work on smaller projects, and smaller websites. They very well may be really interesting to us, and we will pitch them. Very often, I find if we lose them, it's because there are other firms that, at that level and size of project, and maybe for that budget, there are just more who can do a good job.
If it's about really good looks and some general communications strategy versus backend publishing workflows, dealing with a huge knowledge system and a library of publications, larger scale projects that require more complexity, we have moved, because it's the kind of projects that we work on, to focus on that segment of the sector. We do those other ones, but I think we have a much more compelling case for being a really good partner for either that, or because we do a level of brand strategy work that, while now firms you hear talking about it, we've been doing it in a very robust way for a long time. You have to differentiate yourself against what is a much bigger number of folks, who do social impact work only.
Carl Smith: When it feels like a good thing to have more people in the space, if, especially, somebody's got to take care of the world.
Matthew Schwartz: That's right. It's needed, you know?
Carl Smith: If we can do social impact design, I'm all about it, man.
Matthew Schwartz: Look, I have to say ... I mean, there are a couple things in doing this, and I didn't know it when I started, but I really not only know it but love it now, and that is that, first of all, doing the work we do, one of the best parts ... Doing design work, at all, if you're an inquisitive designer who wants to learn and problem solve and understand the context and your clients' needs, and all these things you have to do to actually design something effective, well, when you add a social impact lens to it, and the people you're working with are experts in areas of the world that you're interested in, I call it that I get paid to have an ongoing PhD in a class called How the World Works. That's the first really great reward of this is it's ... I understand a lot more about climate change or immigration and social justice, all sorts of things.
That's one part. The other part, in terms of it's great if more people do this ... I mean, not that I'm necessarily saying I want more high-end competition nipping at my heels, but we go home feeling really good that what we're doing is working with some really honest folks who are trying to make a difference, and that, at the end of the day, what we put out there into the world is helping contribute. I don't get to be on the front lines or dedicate my day to issues that I think are important the way that our clients do, but by doing what we do, we get to have an impact at scale, helping them be better at what they do. To me, that's immensely gratifying.
Carl Smith: Well, I'm glad you're out there doing it, Matt, and I really appreciate you coming by the show today and sharing with all of us what it is to be a social change design firm.
Matthew Schwartz: Thanks, Carl, absolutely. I am ... As you know, I'm a huge fan of the Bureau. You have given so much to me, just as the community and events. You know I'm a regular on the channel, so I love the work that you're doing. It's been so sorely needed in our industry. It has been enormously helpful in helping me grow my business and having a community and camaraderie and some friends around the world that I chat with and all that. I really love that, so I appreciate you having me on, honestly.
Carl Smith: Well, I'm just going to take that, and I'm going to share it with my mom, and I'm going to say, “This is what I do.”
Matthew Schwartz: That's right. You're making the world a better place in your own way, Carl. You really are. It's true.
Carl Smith: Then, really, there's just one way to end it. Go Jags!
Matthew Schwartz: Ugh! Well, we'll [crosstalk 00:30:27] on a Sunday.
Carl Smith: Thanks for listening, everybody. There you go. All right, we'll see everybody else next week. All the best.