Consumers buying into firms aiding charities
Share with others:
If you purchase leopard-printed Toms shoes or a trendy T-shirt from Sevenly, you are not just making a fashion statement; you are making a charitable contribution.
For every pair of shoes purchased, Toms donates a pair to an underprivileged child. And for every shirt sold, Sevenly gives $7 of the proceeds to a different charity each week.
These companies have found success in a hybrid business model that is part capitalist venture and part social mission. While it's not an entirely new concept, companies using it are gaining popularity, especially with the younger generation.
"You're starting to see much more variability in terms of what corporations are doing in philanthropy," said Audrey Murrell, a professor of business administration at the University of Pittsburgh. "Social entrepreneurs have been around for a while, but the attention to it and the ability of people to be able to do it have been increasing. You're starting to see larger social ventures."
Toms was founded in 2006 by Blake Mycoskie, who had launched several successful businesses before he turned 30.
Similarly, Sevenly's youthful slogan -- "World change is how we roll" -- is the product of a staff almost entirely made up of 20-somethings based in Orange County, Calif.
Ryan Wood, the 23-year-old director of public awareness and partnerships, said his generation is demanding social responsibility in the world, and Sevenly serves as a platform for them to effect positive change.
"The passion is starting to brew and starting to surface," he said.
Sevenly, a self-proclaimed "for-profit social good company," got its start in June 2011 when a 25-year-old entrepreneur and a 19-year-old social media connoisseur got together and brainstormed ways to make a social impact.
The duo decided to create an organization that would combat seven of the world's greatest issues: hunger, water, slavery, lack of aid, disaster, disease and poverty. The setup is simple: $7 from each purchase is donated to a different nonprofit every seven days, which accounts for more than a quarter of Sevenly's total revenue.
Founded on biblical principles and playing on the word "heavenly," Sevenly was born -- and it has flourished ever since.
Sevenly has donated more than $1 million to more than 70 nonprofit organizations, such as Love Without Boundaries, which received more than $17,000 to fund lifesaving surgeries for orphaned children, and an anti-sex trafficking organization that rescued 17 girls from prostitution in Thailand.
The co-founders initially envisioned a nonprofit structure, but after doing some research, they agreed that the restrictions and requirements of operating as a 501(c) were not worth the results. The founders believe that as a for-profit, Sevenly has more freedom to provide aid internationally and invest in developing communities.
"When people hear the words 'for profit' they're automatically like, 'Oh, my God, they're profiting off of other people's problems,' when in reality that's not the case at all," Mr. Wood said. "It was never about the money."
He said the ultimate goal of Sevenly is to shut its doors once every nonprofit has sufficient operational funds.
Some organizations still prefer the nonprofit model.
Building New Hope, a nonprofit based in Pittsburgh and Granada, Nicaragua, sells fairly traded coffee to provide a sustainable living for farmers in Central America.
"It's not to make money or to profit from their coffee," executive director Barbara Wein said. "We partner with them so they can receive above the fair trade value for their coffee, and also raise awareness here about the importance of paying people that grow or create the goods that we use a fair price for their work."
Ms. Wein added that one of the most powerful ways Americans can promote positive change is through their role as consumers.
This was not always common knowledge, according to Emily Barman, a sociology professor at Boston University who has researched trends in philanthropy.
Beginning in the late 1960s with the onset of neo-liberal philosophy, people started to believe that "the economy is the best vehicle to make the world a better place," Ms. Barman said.
She also said the shift toward social entrepreneurship has more to do with changes in the consumer mindset than an increase in activism.
Corporate philanthropy and businesses selling fair trade products are not new, but businesses structured around a social mission began to emerge in the 1990s, Ms. Barman said.
As a Pitt professor, Ms. Murrell said she has noticed that more courses in the business curriculum are beginning to pertain to social entrepreneurship.
Similarly, the Pitt student chapter of Enactus, a global organization sponsored by Wal-Mart, uses business concepts to develop community outreach projects.
"It's a good illustration of how we're trying to create the next generation of social entrepreneurs," Ms. Murrell said. "There's a role of broader society in being able to address social concerns -- things like everything from education to literacy to health and well-being. There should be multiple voices to address common and collective social issues."
First Published November 23, 2012 12:00 am