I was interviewed for this article by Knowledge@Wharton on the One-for-One model of companies like TOMS Shoes and Warby Parker.
The one-for-one business model has catapulted to prominence since Toms adopted it. Since 2006, Toms has given away more than 35 million pairs of shoes in 60 countries. Scores of similar businesses, selling a wide range of products, have followed suit. Warby Parker sells and distributes eyeglasses; Roma Boots sells and gives away boots; Nouri Bar donates a meal for a hungry child for every nutritional bar it sells; Sir Richard’s sells and donates condoms; KNO Clothing gives away clothes and donates to homeless shelters; Soapbox Soaps donates a month of water, a bar of soap, or a year of vitamins for each soap product it sells, and so on.
Some of the attractive elements of the model are that it raises awareness of poverty, while giving people a chance to feel like they are doing something for those less fortunate. The problem is, that sometimes our help can actually cause harm. As I note in the interview:
“When you give away something free, you’re giving away a band aid. You’re not addressing deeper causes [of poverty] and you may be inhibiting long-term solutions,” Miller notes. “Poor people aren’t poor because they lack stuff; they’re poor because they lack the infrastructure to create wealth.” That infrastructure includes access to title to their land, the courts, capital and a system for the free exchange of goods, he adds. People who want to help should be asking not, “What can I do to help?” but, “How do people create prosperity for their families, and then, how can I assist with that?”
One-for-One is not necessarily bad, but as Andreas Widmer discusses in Poverty, Inc, one of the problems with social entrepreneurship and applying business models to charity is that if you are doing the wrong thing in the first place you can make a “harmful system more effectively harmful.” I’ll have more to say about social entrepreneurship in future posts but you can read the entire article from Knowledge@Wharton here.