The TOMS® Story according to Toms Website starts as follows…
“While traveling in Argentina in 2006, TOMS Founder Blake Mycoskie witnessed the hardships faced by children growing up without shoes. Wanting to help, he created TOMS Shoes, a company that would match every pair of shoes purchased with a new pair of shoes for a child in need. One for One®.”
This sounds good, so what could be so bad about this right? What began as a simple idea has evolved into a powerful business model that helps address need and advance health, education and economic opportunity for children and their communities around the world actually has another side that should be discussed. As per Impakt’s article about Dead Aid, a term coined by Dambisa Moyo, a Zambian international economist in her novel that investigated the paradox of why trillions of dollars of development aid have not equated to trillions of dollars worth of growth, and instead actually left communities worse off. Dambisa’s ideas highlight very critical details in the realm of CSR and how companies can perpetuate dead aid if they do not implement CSR correctly.
“TOMS CSR model – one shoe bought equals one shoe donated – was touted as a model for all companies to follow, and many millennials bought into the idea that the pair of shoes they were buying would directly benefit the malnourished boy pictured on the TOMS fliers. However, after economic research on the impact of one-for-one models was published, TOMS’ model was put under heavy scrutiny by NGOs and the public alike. Their model fell into the dead aid trap since it caused many beneficiary communities to form a dependency on TOMS’ shoes, collapsing local shoe-making industries due to their inability to compete with free shoes. Studies even showed that kids who received TOMS’ donations were 13% more likely to agree that “others [foreign aid] should provide for the needs of [their families],” proving development of a dependency mindset . In addition, seeing the “helpless” African children on TOMS’ CSR campaign developed a savior-complex in consumers, helping many feel moral about buying shoes, while leaving them no more educated about issues facing global communities. Ultimately, TOMS’ CSR model was proven ineffective because the company did not properly research the needs of the communities they were helping nor did they develop a solution to sustainably empower them.”
The argument continues with some solutions in how CSR could have been implemented better…
Many of the issues that TOMS’ had could have easily been avoided if they had pursued their CSR through the appropriate framework of:
- Conducting a proper needs-assessment into the target communities.
- Designing a program for allocation of their resources with community involvement.
- Monitoring impact with proper strategies to identify progress towards CSR goals.
- Marketing a responsible and educational social agenda to the public.
Mara Einstein, a marketing professor, raised more CSR issues on The Chronicle of Philantrophy website:
- Does buying products for a cause take the place of writing a check to a charity or going online and signing up for a monthly gift?
- Do large, national nonprofits that have become marketing powerhouses take attention and money away from smaller but just as worthy charities?
- Since cause marketing is usually handled by the marketing department of participating corporations, do “product strategies” outweigh humanitarian ones?
The rising popularity of cause-related marketing has been spectacular, benefiting many causes as well as helping companies polish their reputations as good corporate citizens. TOMS rode that trend to spectacular success. And it is a great company with great intentions. Build in Sustainability, the model for TOMS is a self-feeding loop. “If I would’ve taken half a million dollars and just bought shoes to give to the kids, I would’ve been able to give the shoes once. It never would’ve been as far-reaching and sustainable as TOMS Shoes is now.”
To conclude, the fine line of corporate social responsibility is not something that can be an overlay to a business without careful consideration and continuous measure of overall true net positive impact. True impact can only happen over time with careful measuring of it’s cause and effect on multiple levels. This of course makes implementation of CSR even more complicated. While CSR is without a doubt resource and energy intensive, many corporations know they need to get involved and many just aren’t sure where to begin. Quantaloop.com‘s CSR starter package is an excellent resource for this reason being that every metric and impact is measured with local community job creation considered with every land regeneration site. The platform is made to assist and made for customization by brands and corporations. “If people are hungry, dont give people fish, instead teach them to fish.” Empowerment is key.
To learn more on how to implement CSR into your business, start by accessing our FREE library of CSR planning tools on the Quantaloop platform today.