The Potential and Failures of the Buy-One Give-One Model
Can we use the Buy-One Give-One business model to make sustainable social change?
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My main college entrance essay (the one used on the application sent to a multitude of universities) was symbolic of the admiration I, and many other consumers like me, had for TOMS Shoes. TOMS made major waves in the public consciousness in 2006 when it was founded to operate as a for profit business with a “buy-one give-one model” (B1G1). The mission of TOMS was to sell canvas shoes based off of the Argentinian alpargata and donate a pair of the shoes to a child in a developing country for each pair of shoes sold. This goal stemmed from a trip that the company’s founder Blake Mycoskie took to Argentina, where he met children that were too impoverished to afford shoes and often had to walk the streets barefoot. This lack of shoes can often lead to major health problems, especially in children.
In that college essay I wrote about the inspiration that Mycoskie had on my choice to be a business student. The power to use the system of free enterprise to help those who needed it and solve major social problems and injustices appealed to the human part of me. It was a revolutionary idea that, prior to TOMS, I and many others had not been exposed to. It’s easy to see how the model gained traction with consumers. Tying individual purchases to philanthropy allows consumers to feel a stronger connection to the cause at hand. Often, social missions taken up by companies that use the B1G1 model are removed from the everyday thoughts and worries of the intended market for the product or service. This is where companies like TOMS truly succeed: in increasing awareness of global social issues that need a light shined on them. Its strength is in the tangible results that the model brings. Continuing with TOMS as an example, the people who buy TOMS shoes are able to better feel a connection with the person receiving the shoes than they would had they simply donated money to a cause. Increasing accountability in a consumer buying decision is an important part of social enterprise and the B1G1 model excels at this.
Despite the benefits that the buy one give one model has on increasing the presence of the social responsibility of business in the public consciousness, the model has some serious and well justified criticism from social enterprise and business strategy experts. The early implementation of the model at TOMS exemplifies these issues. By focusing a major portion of their manufacturing in low cost countries outside of their area of impact (China) and only a small portion in the countries directly receiving “Shoe Drops” like Argentina and Ethiopia, TOMS effectively shortchanges local shoe manufacturers. In not supporting the local manufacturing of shoes TOMS allows for its giving to effectively hurt local economies and perpetuate the sort of poverty that their mission is there to alleviate. Additionally, giving a child a pair of shoes is a short term solution to, and ignores the reasons why, the child has no shoes. Not only is TOMS giving canvas shoes to children in areas that are subject to heavy and repeated rainfall (where canvas will fall apart quickly) but children quickly grow out of shoes. This leaves the receivers of the TOMS shoe drop in the same position or, at best, with a pair of worn out shoes to small for their feet after a short amount of time. Further, there is some debate on the actual need for shoes in the areas targeted by TOMS.
The mark of a impactful social enterprise is a coordinated effort to address the roots of social inequality or the main causes of social issues. When considering the issue of children’s health in developing countries that TOMS maintains is the driving force behind their model, it is plain to see that there are a multitude of directions that a company with their level of brand recognition and capital can move in to more effectively. By actively combating sources of poverty through supporting local businesses and manufacturing, TOMS has a major opportunity to build better economies in impoverished communities. Despite being behind the eight ball, it is worth noting that TOMS has publicly recognized this failure and has begun to take steps to increase its partnerships with manufacturers in the communities that they attempt to support. Additionally, TOMS could make more concentrated efforts to make sustainable public health change in these communities. Working with local construction companies to build communal latrines to reduce the spread of human waste (the leading cause of foot related illness and hookworm) and public health officials to increase the effectiveness of local health programs are just some methods that could lead to major change in the long-run.
The buy-one give-one model has real potential. By capitalizing on a consumer desire to participate in social good in their everyday lives, companies that incorporate the model are able to shine a light on endemic social issues. It’s a matter of ensuring that the model is implemented in a way that truly attacks the root issues of these issues in a sustainable way that determines the real impact of these companies. With the right implementation, enterprises that buy one and give one can truly make a difference. However, when executed poorly or with a lack of insight into the underlying issues, the buy-one give-one model gives very little to the people who need it most.
