Learning from TOMS – Despite criticism, can companies make one-for-one work?

Hi friends! Today marks part one of a 4-part series I am so excited to share with you. I wanted to start writing more about social business, in addition to my regular arts posts, and what better topic to start with than one-for-one? Over the next 4 weeks I will share the history of the one-for-one model, explain its 5 greatest criticisms, see how companies with this model stack up today, and think about how it could ever be perfected in the future.

Part 1: One-for-One – Friend or Foe?

I recently bought a *bunch* of stuff from this amazing company Yoobi.

                       Not only do they make colorful and really unique school and office supplies, but for every item sold, they give away an equivalent item to underfunded schools in the US. As someone who spent a lot of time in California public school myself, I am so excited about what they’re doing and was on the lookout for something to order. When my sister told me she needed a new stapler, I saw my chance!! Before I knew it, and not too many dollars later, my entire office was restocked with Yoobi supplies.

I’m stoked about Yoobi because today, “99.5% of teachers buy classroom essentials out of their own pocket.” If someone could come in, put that money back in the pocket of these incredible teachers, and provide kids in the least-privileged of circumstances with beautiful tools to get excited about learning, that is definitely something I want to be a part of. Not only that, but rather than just asking for donations to solve this problem, Yoobi offers me a product of my own. Pens and paper are already things I need to buy, so why not do it in a way that benefits others? Yoobi is providing great products and a valuable service for society as a for-profit business. Launched in 2014, this company has already impacted 2 million kids with their “classroom packs,” boxes full of everything a classroom of 30 students needs for a year. I am SO, so excited about this.

But the more I thought about it, the more their “one for you, one for me” mission was kind of surprising. By the time Yoobi started, it was well known that one-for-one giving was no longer the darling child of the social business community. Studies were raising some serious qualms about one-for-one’s effectiveness at relieving poverty, and it was definitely not proven as a good marketing strategy. I wondered, why would a new company want to start with such a questionable model at all? Are they attempting a “second wave” one-for-one movement, addressing all the criticisms of the first? Because I couldn’t believe they were just oblivious. Yoobi’s choice to pursue one-for-one ultimately made me wonder about TOMS, and the state of one-for-one in general. Yoobi’s donation model is only possible because TOMS not only invented it, but because they have withstood years of withering criticism and won, coming back better in the process.

20146_1214055039078_7993284_n
Enjoying my first pair of TOMS, February 2010

Besides microfinance, TOMS’s one-for-one giving policy is pretty much *the* foundational innovation that got social business where it is today. TOMS, founded in 2006, became daily proof of concept that a for-profit company could thrive while fulfilling a social mission. While many companies at the time had various Corporate Social Responsibility efforts like donating a percentage of profits to certain causes, TOMS was the first retail company that truly worked “all social, all the time.”

You may know the story, but if not, it is outlined here in a beautiful essay by Tom himself. (just kidding!! The founder’s name is Blake Mycoskie. TOMS is short for “Tomorrow’s Shoes):

While in Buenos Aires, I met a woman who worked for a nonprofit, delivering shoes to children in poor rural areas. She invited me to accompany her, and the experience was truly life-changing. In every town we were greeted with cheers and tears. I met a pair of brothers, ages 10 and 12, who had been sharing a single pair of adult-size shoes. Because the local schools required footwear, they had to take turns going to class. Their mother wept when I handed her shoes that actually fit her boys’ feet. I couldn’t believe that such a simple act could have such an enormous impact on people’s lives.

I decided to do something more. Rather than go home and ask my friends to donate their hand-me-downs or make financial contributions, I would start a for-profit company based on the buy-one, give-one idea.” Harvard Business Review, Jan-Feb 2016.

From there, Blake eventually expanded to “buy coffee, give reliable access to clean water” and “buy sunglasses, provide eye clinics in the developing world.”

In the 10 years since TOMS pioneered the one-for-one model, it has exploded in popularity, not only with its customers but as a key influence on other social startups. You may not know it, but there is probably a one-for-one option or concept for almost everything you buy; boots, glasses, prepackaged food, restaurant meals, water, personal hygiene…everything from outdoor equipment to art supplies has a for-profit business serving those in poverty through this model. It sounds amazing, right? One day, almost every item we buy could equivalently help people who can’t afford them. The problem is, a lot of smart people think these amazing missions might not actually be working.

People often ask me why there is so much vehement criticism of TOMS in the first place. It seems ludicrous that such a simple and elegant idea could get so much hate, even still today. For this, it’s helpful to briefly understand the history of Western charity in Third World countries. William Easterly’s landmark 2007 book “The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good” outlines in detail the reality that for a long time, organizations like the World Bank and the IMF didn’t understand the cultures, traditions, political and legal climates of the communities they were trying to help, and so their donations were at best ineffective and at worst contributed to dictatorship, corruption, dependency on foreign aid, and damage to local economies. Since Easterly’s book, studies have shown pros and cons on both sides of the donation game – sometimes donations can be the jump start a community needs to increase its quality of life and standard of living, and sometimes everyone would’ve been better off leaving well enough alone. My guess is that the heat in the critique comes from a desire to make sure this model is actually helping people, not just giving wealthier Americans a pat on the back and calling it a day. I will detail specific studies in parts 2 and 3, but suffice it to say that a social business model based on donating anything abroad, even shoes, would eventually garner some rightful scrutiny based on the sketchy history of Western donations in the past. With this complex history of giving-based organizations in my mind, of course this made me ask, how on earth is Yoobi avoiding such criticism???

In the next 3 posts, I will outline the 5 main criticisms of TOMS’s original one-for-one model, as well as detail how Yoobi stacks up on each of these points. Will Yoobi pass the test? Is the company a successful reincarnation of the old one-for-one model, social business’ Gandalf the White, a phoenix rising from academia’s ashes, buy one/give one 2.0? Or are they just another clueless startup doomed to public hatred for their decimation of local economies??? Tune in next time to find out.

cover image via minessafetyconference.org.

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