Forget "buy one, get one" deals. These days it's all about "buy one, give one."
More Americans than ever before are calling on companies to make the world a better place. According to a recent survey from Cause Evolution, since 1993, the percentage of Americans who have bought a product because the company supported a cause they believed in more than doubled, climbing from 20 to 41 percent. If a customer's go-to brand does not support a social cause and a comparable brand does, 80 percent of survey respondents said they'd likely switch brands.
In response to the pressure, a growing number of companies ranging from Toms shoes to Ikea are embracing a one-for-one model of corporate philanthropy. For every product purchased, another is donated to charity.
The buy-one-give-one model is appealing because it is more tangible than most corporate philanthropy programs, Dean Karlan, a professor of economics at Yale University told The New York Times. Psychology research shows people are more motivated to help "a child in need" than an abstract idea or cause.
“You actually feel that there’s someone out there who has a pair of shoes because of your transaction,” said Karlan, who co-authored the book "More Than Good Intentions."
But, while proponents praise the method for encouraging philanthropy in everyday purchasing decisions, critics question how effective it is in helping the poor.
In a recent article for Fast Company's Co.Exist, Cheryl Davenport called out Toms shoes for applying a bandaid to "a system in need of long-term, multi-faceted economic development, health sanitation and education solutions."
Giving children in developing countries shoes creates an unsustainable aid-based economy, she wrote. Once the shoes wear out, the kids will be back where they started — barefoot. In the meantime, donations undercut local prices and hurt the farmers and traders whose success is vital to lifting whole communities out of poverty.
"The fact is, Toms isn’t designed to build the economies of developing countries," she wrote. "It’s designed to make western consumers feel good."
The model's shortcomings aren't unfixable, though, noted Sarika Bansal of The New York Times.
Instead of simply shipping glasses overseas, vintage eyewear company Warby Parker turns the cash over to the nonprofit VisionSpring, which helps locals to launch their own businesses selling glasses.
“People are constantly breaking or losing their glasses, or their prescriptions are changing, or new people are finding that they need new glasses,” Neil Blumenthal, a co-founder of Warby Parker, told the Times. “You need a permanent presence [in a community], and that can’t be sustained by giving away stuff for free.”
Toms is actively looking to start manufacturing shoes in the communities it serves.
“In a year, I’ll be in a different position to tell you where we’ll be locally manufacturing,” said Sebastian Fries, "chief giving officer" at Toms. “That’s a clear goal of mine.”