By Gianni Vasquez
Businesses play a crucial role in generating economic growth and prosperity. While they increase people’s standards of living through job creation, companies are in a position to further benefit society by incorporating social responsibility as a part of their mission. Philanthropy not only strengthens the brand of the company, but also creates a richer company culture, and offers a clearer sense of purpose.
A company that helped mainstream the concept of social responsibility in business for the current generation is TOMS Shoes. TOMS Shoes is a footwear company founded by Blake Mycoskie. Investopedia considered Mycoskie as one of the 10 most successful social entrepreneurs in 2015. He branded and coined the slogan “One for One,” meaning for each pair of shoes sold, another pair of shoes are donated to communities in need from around the world. Mycoskie received backlash for his “One for One” model by economists and entrepreneurs alike. Critics state that the practice undermines local markets and therefore hinders the economic growth of underdeveloped economies.
While the company’s initial efforts were controversial, TOMS now focuses on making the donated shoes in the same countries where they will be distributed in order to stimulate local job growth. Since the company’s founding, TOMS has donated over 75 million pairs of shoes to impoverished communities in over 70 countries.
Recently, the company has expanded its philanthropic portfolio in order to maximize its impact on a global scale. It now uses profits from the sale of an assortment of items to fund eye exams, eye surgeries, and prescription eyewear for the poor. TOMS also support efforts that increase people’s access to clean water and provides medical support and training necessary for the safe delivery of newborn children. So far, the company has provided optometry services to over 500,000 people, helped more than 150,000 mothers safely give birth, and provided sanitary water to vulnerable communities for roughly 450,000 weeks. TOMS also offers funding opportunities to aspiring social enterprises through the TOMS Social Entrepreneurship Fund.
In a 2016 article published in the Harvard Business Review, Mycoskie stated that a company’s biggest advantage is to use business to improve lives. By adopting a philanthropic approach to business, businesses of all sizes can build a community presence to drive revenue while implementing positive change.
The TOMS philanthropic business model became a huge success, with the company experiencing a growth rate of 300 percent for five consecutive years after 2011. Following the success of TOMS’s viral “One for One” shoe campaign, more enterprises sought to incorporate charity into their company’s mission. An example of this is Solo Eyewear, an eco-friendly eyewear company that produces eyeglasses out of recycled plastic and implements the “One for One” model by providing free eye surgeries for every pair of glasses sold.
While a business’s main objective may be to maximize profits, engaging in philanthropic efforts can give it a competitive edge in the marketplace. A 2017 Deloitte survey found that 76 percent of millennials view businesses as an important driver of social change. A survey conducted by Fortune revealed that over two-thirds of millennials prefer working for businesses that give back to the community. While a business can grow without engaging in charitable acts, doing so allows it to reap financial rewards and leave a lasting impact on society.