What makes a good holiday gift? For an increasing number of consumers, it’s the satisfaction of knowing that part of a purchase is going to a good cause. An annual survey by public relations firm Edelman found that more people than ever before—53% in 2012—consider a brand’s social causes when making a purchase.
For many of these consumers, the "buy one, give one" (B1G1) approach seems like an obvious way to support meaningful social causes while shopping. The concept is simple: your purchase ensures the donation of a similar good, presumably to someone in need. Toms Shoes introduced the idea seven years ago, and since then, countless others have entered the fray. You can buy B1G1 flashlights, toothbrushes, medical scrubs, animal blankies, and much, much more.
Especially around the holidays, B1G1 lets consumers feel altruistic about their purchasing decisions. But does it actually make a difference to the recipients of the donations? Is the donation received with as much enthusiasm as the purchase?
If you want to make the biggest splash with your charity dollars this holiday season, here are seven questions to consider before purchasing the latest B1G1 product:
Consider the hypothetical (and slightly absurd) example of a B1G1 bathing suit company. If the company is donating goods in Siberia, chances are that a bathing suit isn’t on the top of people’s wish lists. It’s also possible that the bathing suit doesn’t fit local fashion or modesty norms. Before purchasing a B1G1 product, try to make sure the donated product is locally appropriate and filling an unmet need.
Many B1G1 companies have marketing campaigns featuring images of individuals in faraway places benefiting from donations. How representative is the marketing material of reality? Are the donations going to the communities and individuals who could use them the most? For instance, Toms says that shoes help children who are discriminated from attending school, but I learned last year that some of their shoes were once donated to schoolchildren (they’ve since evolved their strategy). Consider researching the partners the B1G1 company engages for donations, the communities they serve, and the beneficiaries.
Donations can be useful when disaster strikes, when market mechanisms fail, and when a needed product would not otherwise reach intended recipients. Outside of these scenarios, markets may be more effective than donations. Markets are also usually more sustainable, as they are not reliant on the vacillating generosity of strangers. Could you imagine your B1G1 product recapitulated as a business? Do you think people would be willing and able to purchase the product? If so, your donation may not have its intended effect.
Is there a local blanket or toothbrush manufacturer? Could there potentially be one? Is the B1G1 company engaging with these manufacturers in their giving process? It would be highly unfortunate if B1G1 donations meant that a community’s existing blanket seller went out of business. B1G1 companies who work with local manufacturers and distributors, on the other hand, could conceivably spur local economic development. They would also limit their carbon footprint and transportation costs.
What happens if consumers are no longer interested in purchasing a B1G1 product? Canvas shoes and hipster-chic glasses will not be popular forever. In that case, will the donations also cease? On the other hand, what if the donated goods prove to be highly valued among recipients? Is the quantity of the donation limited to the number of goods purchased thousands of miles away?
Traditional charities are required to publish information regarding their activities and financials. The same is not true of most B1G1 companies, as they are for-profit entities. It can be difficult to glean information on where exactly donations occur or who a company’s distribution partners are—let alone the quantifiable impact of the donation. Financial transparency on their charitable activities is even more difficult to find.
Managing donations, especially at high volume, is tricky business. It requires a team who knows how to run nonprofit financials, handle logistics like shipping and customs, and engage well-suited partners. It is equally difficult to design products appropriate for people in different parts of the world. While skinny jeans may be popular in parts of Brooklyn, youth in Bangladesh may prefer loose linen trousers. Does your favorite B1G1 company have the right people at the helm of the giving business? Do they have the know-how to design and distribute products for radically different markets?
Charity works best when responding, as best as possible, to the needs of the beneficiaries. If you are thinking of supporting a B1G1 company this holiday season, consider the effect your purchase will ultimately have on the recipient—and whether the company is equipped to deliver lasting change."