The “one-for-one” philosophy, wherein a company donates a product to those in need for each product a consumer buys, has been growing since Toms Shoes pioneered it in 2008. Toms itself recently expanded its line to T-shirts, hats, and accessories, matching them with a pair of new shoes for a child in need. And other companies have copied the buy-one-give-one business model. Now the “haves” can purchase prescription glasses from Warby Parker, bedding, towels, and window dressings from Blanket America, toothbrushes from Smile Squared, and rain boots from Roma Boots. Each company donates the same to the “have nots.”
Should these products or causes fail to meet philanthropic tastes, ShopWithMeaning.org connects potential donors with other socially responsible companies “that provide consumers with a tangible opportunity to support worthy causes through everyday purchases.” You can search for companies by product category or cause.
But is the one-for-one business model sustainable? Anthony Thomas, co-founder of Kno Clothing in New York, says it is not. Instead, his company’s model, implemented as of October 2010, is dedicated to tackling homelessness here in the U.S. Challenging Toms with its tag line, “fashioned to end homelessness,” Thomas wants people to “buy one, give more.”
Thomas claims the problem with Toms’ approach is that children in developing nations have many other needs besides shoes. “Just giving away shoes is not always the most effective thing to do,” according to Thomas. Instead, Kno partners with local nonprofits dedicated to ending homelessness in U.S. cities. Together, they assess the needs of the homeless, so donated items change from city to city. Beyond that temporary help, Kno gives 50% of its profits to its non-profit partners.
Thomas is not alone. In April, here on Co.Exist, Cheryl Davenport, director of the corporate practice at Mission Measurement, a consulting firm that helps its clients create value through social change, noted that charitable gifts can distort developing markets and undermine local businesses. She said research shows a “finite and unpredictable market for the feel good value proposition” and challenged Toms to do better.
One Kno partner, the 100,000 Homes Campaign, works with communities and organizations all around the country. Its goal is to identify those homeless who face the greatest risk of dying on the streets and house 100,000 of them by July 2013. Using this model, called “Housing First,” agencies provide permanent housing to the homeless as soon as possible, along with supportive services, instead of placing them into shelters.
Kno partners help complete the necessary paperwork to get the homeless, including those with low income and military veterans, into homes they qualify for. Thomas claims this is more cost effective than other programs to aid the homeless, and that statistics show they ultimately lead more stable lives as a result of this strategy.
But instability can threaten anyone, as it did Blair Griffith, Miss Colorado USA 2011, and her mother. They became homeless when Mrs. Griffith could not pay both her medical and rental bills. Blair Griffith found a gig, modeling Kno’s spring and summer collections of women’s tops, dresses, and accessories.
“People who live on the streets tend to cycle through emergency rooms, addiction treatment, psychiatric care, and jails,” says Thomas, “Housing them yields huge cost savings for society. In Los Angeles, the nation’s homeless capital, 4,800 chronically homeless people–about 10% of the city’s homeless population–consume half a billion dollars in services annually, well more than the remaining 90%. Providing supportive housing in Los Angeles is 40% cheaper than leaving people on the streets.” And according to “Home for Good,” a United Way 2012 report (PDF), “permanent housing with supportive services is a proven model for ending homelessness, with a success rate of over 85%.”
Kno currently has annual earnings of $100,000. It has distributed over 1,000 articles of clothing and helped house over 18,000 people in New York City, Philadelphia, Honolulu, and Des Moines. That’s a start, but it’s a drop in the bucket. Put another way, the need is great and the market huge; as of 2007, approximately 3.5 million people––1.35 million of them children––are likely to be homeless in any given year, according to the National Law Center on Homelessness and Poverty.
Is Kno’s model any more sustainable than Toms? We’ll have to wait and see. Toms did not respond to repeated requests for comment for this article.