For-Profit or Not-For-Profit?

So, there are two or three things in the Africa/philanthropy/activism field I’ve been meaning to rant about.  This is one, and at least another will follow sometime.   Since they are rants, I apologize for any rambling or over-impassioned writing. Now, onward to companies I refuse to support.

In the philanthropic world, there are a couple of things that are all the rage.  One, is Toms Shoes. A lesser one is Ethos Water, a sub-group from the giant Starbucks Foundation. I have grievances about these two companies.

Toms Shoes is a for-profit company that’s selling point is this: If you buy a pair of $40-90 shoes, we’ll donate a pair to a needy child in South America or Africa. One for one. It’s that simple, and it sells like hotcakes to hipsters wanting to help.

My beef with Toms Shoes has several dimensions to it. When I first  heard about Toms Shoes, it was because my friend Mike was explaining his grievances to an Invisible Children roadie. Since then, I’ve looked more and more into the company and have come to pretty much the same conclusions as Mike.

  • First of all, giving shoes to kids is just not sustainable. When that pair of shoes wears out, they’ll just be waiting for the next trip Blake Mycoskie makes with free shoes. It’s be much better if community development helped empower people with jobs and maybe they could buy their children shoes themselves.
  • But the company is giving away shoes! That’s so genuinely kind of them! NO.  Since it’s a for-profit company, they don’t release credible numbers. But we do know that they outsource production, meaning these $40-90 shoes probably cost a fistful of dollars. The positive press they get for giving cheap shoes away more than makes up for the loss.
  • Want to make this a better model? Make the shoes fair trade. Employ locally here so that American parents can buy their children shoes; or  even better, employ on-site, so that  the local residents get jobs and their children get shoes. Maybe give them some personal finance lessons so that now they’re kids can wear those donated shoes to school. There are so many roads to improvement, but they cost this altruistic for-profit too much money to consider.
  • Youngsters wanting to be a part of something truly good volunteer to work for Toms or to promote the company in places like college campuses. As my friend Mike put it, it’s like Nike having volunteers. A company uses its “good deed” which doesn’t really cost it anything and it gets free promotions and even some free labor out of it, so giving shoes away in Argentina actually saves them a lot of cash.
  • Also, the shoes look okay, but those boots are hella freaky.

Ethos Water is that bottle that you see in Starbucks stores that boasts, right on the bottle in blue letters, “helping children get clean water.” For every bottle sold, the company donates $0.05 to a water-related aid agency that is helping some of the billion people without clean water get clean water.

My gripe with Ethos Water is probably even greater than with Toms. It is also multi-faceted, and I was introduced to my problems when standing in a Starbucks one day waiting to meet a friend. I picked up the bottle, read the label, saw the price, and just about kicked somebody (maybe Peter Thum).

  • For starters, each bottle ranges from $2-4. For one bottle of purified water. I could buy a 24-pack of bottled water at Fry’s for about $3.50. The equivalent in Ethos would be about $100, of which $1.20 would go towards real change-makers. Or I could buy said carton of bottled water and donate $96 directly to programs.
  • With all this eco-friendly craziness going on, you’d think they would at least be good in that regard. Even though it’s made by Pepsi Co, who uses recycled plastic in all their bottles – Ethos Water doesn’t. They introduce new plastics into the world.
  • Starbucks bought Ethos Water for $8,000,000. To date, Ethos Water has donated $6,000,000. That’s just a fun fact.
  • Another fun fact: one could donate $100 to Charity Water and do some good. To get $100 to affiliated groups through Ethos Water, you’d have to buy 2000 bottles, or spend $4000-8000 dollars. And you would be creating all that  plastic waste in your wake.

Now, I don’t mind for-profits that send a little to a charity, like when Yoplait collects yogurt-tops for Breast Cancer awareness (my grievances with the Breast Cancer awareness cause [re: industry] aside) or others. These are companies choosing to send a portion  to a cause. I don’t support companies founded on pathos and espouse this cause and misuse the disadvantaged to get your cash. My favorite, of course, is the non-profit sector. These non-governmental organizations actually do work, and many are transparent about how their money is spent. Not all are ethical, many have too much overhead (but that’s a blogpost for another day) but they  at least have a mission statement and are  restricted by NGO requirements.  So, if you feel like giving shoes to kids or building a well in a rural village, do it in a better way please. Or just don’t tell me about it.

EDIT: All links should be fixed. Sorry, I’m forgetful about HTML rules.