Toms Shoes

Toms' business model is known as the "one for one concept" model, which is referring to the company's promise to deliver a pair of free shoes to a child in need for every sale of their retail product.[31] The countries involved have included Argentina, Ethiopia, Guatemala, Haiti, Mexico, Rwanda, South Africa and the United States.[32] The business has grown beyond producing shoes and has included eyewear and apparel in Toms product lines. The company uses word-of-mouth advocacy for much of its sales, centering its business focus on corporate social responsibility. Part of this model originally involved a non-profit arm called "Friends of Toms" that recruited volunteers to help in the shoe distributions in foreign countries.[33] Toms trademarked the phrase "One for One" to describe its own business model.[34] Toms has received criticism from the international development community[35][36] who have stated that Toms' model is designed to make consumers feel good rather than addressing the underlying causes of poverty.[37] Criticisms have also included whether or not the shoe donation is as effective as a monetary donation to other charities.[38] Toms responded to this criticism by moving 40% of its supply chain for shoe donation to countries they actively give in. Toms presently manufactures shoes in Kenya, India, Ethiopia and Haiti.[39]

A 2014 paper in the Journal of Development Effectiveness studied the effect of Toms Shoes on local shoe markets, and did not find any statistically significant effect, although analysts and the paper's authors noted the study was limited in scope and time-scale.[40][41][42]

More recent papers such as "Shoeing the Children: The Impact of the TOMS Shoe Donation Program in Rural El Salvador" suggest harmful effects and even an economical decline in local production in the target countries.[43] "Looking at cross-country data on used-clothing imports across African countries, he finds that these imports explain roughly 40% of the decline in production in the region and 50% of the decline in employment over the period 1981–2000." The same study about Toms Shoes specifically states psychological and therefore social consequences in El Salvador: "In-kind donations may exhibit negative externalities on the psychology of recipients, unintentionally fostering a sense of dependency on outside donors."

In 2019, Amy Smith, TOMS' Chief Giving Officer, announced in their 2019 Impact Report that the company would no longer be following the "One for One" business model that TOMS pioneered. This was her statement:

"We made the decision to decouple our impact from the One for One model we pioneered, and to expand our giving portfolio to include impact grants. This way, we can support organizations working to address some of today’s most pressing issues."

Author Daniel H. Pink described the company's business model as "expressly built for purpose maximization", whereby Toms is selling both shoes and its ideal. Toms' consumer market are purchasing shoes and also making a purchase that transforms them into benefactors for the company.[44] Another phrase used to try to describe the business model has been "caring capitalism".[45] Part of how Toms has developed this description is by incorporating the giving into its business model before it made a profit, making it as integral to the business model as its revenue generating aspects.[46] Business tycoon and Virgin Group founder Richard Branson wrote of the company's business model in his book Screw Business as Usual, "They look for communities that will benefit most from Toms based on their economic, health and education needs while taking into account local business so as not to create a correlating negative effect." He also commented on Toms' expansion into eyewear in order to help the nearly 300 million people who are visually impaired in developing nations.[47]

The company's shoe distribution partners have focused on distributing shoes in areas where health and social benefits of the shoes would be the highest. For example, in Ethiopia the shoes are intended to help prevent a soil-borne disease that attacks the lymphatic system and which largely affected women and children.[15] Toms sunglasses are sold with the One for One model, however it does not necessarily provide glasses only to those in developing countries. The One for One model includes putting money toward medical treatment, eye surgeries and prescription glasses. Toms works with the Seva Foundation among other partners to accomplish this.[48] The first countries that Toms implemented its program were Nepal, Cambodia and Tibet.[49] The original three designs, according to Leigh Grogan, were "The stripe on the temples represents the buyer; the stripe on the tips represents the person whose sight is being helped, and the middle stripe represents Toms, which brings the two together."[50][51]

Students attending colleges across the United States have created TOMS campus clubs. As of March 20, 2014, 281 campus clubs existed in the United States with another dozen located in Canada.[59] By comparison, another nonprofit organization known as Lions Club International was established in 1917 and is known for working to ending the cause of blindness, reports 400 Lions’ campus clubs in 42 countries.[60]

In 2009 Toms partnered with the Charlize Theron Africa Outreach Project to create limited edition shoes, and used profits to benefit education and medical support in remote areas of Africa suffering from AIDS outbreaks.[61] Toms has also produced shoes with a handlebar mustache symbol in place of the traditional Toms symbol in support of the Movember Foundation.[62] Toms is a supporter of the charity charity: water, with which it has partnered with for several years, including its WaterForward project, which aims to bring clean water to underdeveloped countries.[63] An additional partner charity is FEED, a charity where a consumer will purchase a pair of shoes and the company will donate twelve meals to impoverished schools in addition to a pair of shoes for impoverished children.[64]

The major mission of Toms is that a business, rather than a charity, would help their impact last longer. In his speech at the Second Annual Clinton Global Initiative[65] Mycoskie states that his initial motivation was a disease called podoconiosis—a debilitating and disfiguring disease which causes one's feet to swell along with many other health implications. Also known as "Mossy Foot", podoconiosis is a form of elephantiasis that affects the lymphatic system of the lower legs. The disease is a soil-transmitted disease caused by walking in silica-rich soil.[66] Toms currently works with factories nearby where they perform some of their shoe drops.[67]

The Tom's 'One for One' model has inspired many different companies to adopt similar concepts. Warby Parker, launched in 2010, donates a pair of glasses to someone in need for every pair of glasses it sells. The social business Ruby Cup uses a 'Buy One Give One' model for their menstrual cup venture, benefiting women in Kenya.[68] A Bristol chiropractic center influenced by Mycoskie's Start Something That Matters[69] book started donating £1 to Cherish Uganda for every appointment attended.[70] citizenAID North America launched in 2018, donates life-saving training to US teachers and educators.

In July 2011, Toms founder Blake Mycoskie participated in an event sponsored by the group Focus on the Family.[71][72] After being criticized for supporting a socially conservative non-profit, Mycoskie posted an apology on his website stating that he and his handlers had not heard of Focus on the Family before participating in the event and decided it was a mistake. He also stated that he and the company support equal human and civil rights.[73][74]