Is Social Enterprise the Future of Charitable Giving?

Blake Mycoskie, founder of TOMS Shoes, started a global movement with a small, simple idea. Now he is ready to expand the work they do to help those in need in the United States.

TOMS humble beginnings happened unintentionally. Blake was traveling in Argentina in 2006, learning to sail and playing polo, when he met a woman who was collecting shoes for the poor. Startled that in the 21st century so many kids still needed shoes. His solution to the problem was simple, yet inspiring, to create a for-profit business that was sustainable and not reliant on donations.

He decided to start a shoe company that would give a pair away for every pair it sold. The idea was simple, but he recognized that the potential to help others was huge.

His first product was a variation of the traditional Argentine shoe that he brought home from his trip, the rope-soled, canvas-topped alpargata. By the fall of that year he was ready to return to Argentina to give away his first 10,000 pairs of new shoes to the children who first inspired him to create Toms Shoes.

TOMS Shoes has only been around for six years, but in that time, the company has given away just over 10 million pairs of shoes as part of its one-for-one model.

 

 

 

Social enterprises, like Toms Shoes, are businesses whose primary purpose is the common good. They use the methods and disciplines of business and the power of the marketplace to advance their social causes.

In its early days, the social enterprise movement was identified mainly with nonprofits that used business methodologies to pursue their mission. Today, it also encompasses for-profits like Toms Shoes whose driving purpose is social.

The strength of being a social enterprise lies partly on its predisposition to bring lessons from business and apply them to answering social need. As Blake says “a charity is really dependent on donations, and sometimes donors don’t always show up. They have a good year, they have a bad year—it changes their ability to give on a year-by-year basis. But as a business, there’s a lot more stability, especially if you build a successful business. And that allows us to have sustainability.”

Social enterprise allows these organisations to grow and expand in a way that is difficult for non-profit organisations. This model enables these organizations to have an increasing impact on society as they expand and grow as profits are reinvested into expanding their programs.

It is a sustainable approach that has enabled Toms Shoes to develop and grow and find new ways to support local communities in need.

“I’ve learned that the keys to poverty alleviation are education and jobs,” says Blake. “And we now have the resources to put investment behind this.”

Three years ago, TOMS began to make their Giving Shoes in Ethiopia, which has a small but burgeoning shoemaking sector. By producing more shoes locally they are able to support local economies by creating jobs in places where they are needed.

Within two years, they plan to produce one third of their Giving Shoes in the regions where they give them. They have been testing production in India, and production is beginning in Haiti and, within the next couple of years, it expects to add expand manufacturing in Africa and other regions.

 

 

How they give has changed as well. In the early days of TOMS, they used “shoe drops” to give.  Now they give year round, with more than 100 Shoe Giving Partners.

It is a partnership that has yielded tremendous benefits to local communities. On their own, shoes have a limited ability to change a life, but when combined with programs run by their Giving Partners, they saw that collectively they could become a powerful tool in helping create opportunities for a better future for children.

So, in 2009, they began working with humanitarian organizations to integrate new Toms Shoes into their larger health, education and community development programs to combat malnutrition, and help improve school attendance and enrolment.

One of those partners, National Relief Charities, is helping them to help children in reservation communities in the United States. Nearly half of Native American children live in poverty, making rural reservation communities home to one of the minority groups with the most need in the United States.

According to NRC, the absentee rate at reservation schools is typically as high as 40%, but when the community members know the children are receiving TOMS Shoes, school attendance is high.

 

 

To support this further Toms provide posters for the school to advertise the shoe distribution, to help incentivize attendance. It is through initiatives like this that they are able to have much broader impact on communities beyond the provision of shoes.

Kelly, Program Director at National Relief Charities said of TOMS partnership with RememberNativeAmericans.org:

“It was clear from the start that TOMS is invested in supporting the dignity of the people who receive their shoes. They have actively solicited our feedback on all phases of the project and have been so responsive to any requests or questions we’ve had.”

 

 

It was through these partnerships that they were able to collect feedback on the fit, durability and comfort of the shoes so they could improve their selection of shoes and develop new styles of shoes needed by those communities. With feedback from their Giving Partners, they made improvements to the canvas shoes they give. They also developed new Giving Pairs, not available for sale, that have been tailored for local needs, including the sports shoe and winter boot.

“Our customers get excited to be a part of what we’re doing,” says Blake. “If you ask anyone wearing Toms how they first heard about us, most won’t mention an advertisement; they’ll say a friend told them our story.”

TOMS Shoes have been giving in the U.S. on a small scale since 2009, but it has taken years of work to develop a sustainable, large-scale domestic program. Their work with reservation communities is part of their huge plan to give away over 1 million new pairs of shoes to children across America by the end of 2014. I was thrilled when asked to participate in the TOMS brand ambassadorship program to support TOMS U.S. Giving program. I am bringing this post and #OneforOne news to you as a part of that partnership.

In many ways I think that social enterprise may be the future of charitable giving. I only wish that more companies had a vision for the world, that profit was not the primary purpose of companies but instead an approach to created sustainable change within communities that now more than ever is needed.

  • Absolutely love the idea here Daniel. Giving freely vibes with me.

  • Yes, social enterprise is the future of charitable giving, IMO. Consumers want to support businesses that are about more than the bottom line…and many people are realizing that “giving” isn’t really a sustainable way to help others.

  • Fantastic, detailed article about a great company. So excited to see the social enterprise model being used here, since the US is also home to its own piece of global poverty.

    • Thanks Deborah. Yes they are a great company and it is fantastic to see them working in reservation communities

  • Billls4Charities

    I love social enterprise and believe it can solve the majority of issues that requires sustainable funding on the local, national, and global levels. The Nov/Dec 2013 issue of Networking Times is dedicated for this issue (http://issuu.com/yanhughes/docs/nt_1206_flipbook). My budding project (bills4charities) falls in this category and I am looking for leaders to work with to take it to the next level.

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