It used to be that companies worked hard, met their sales goals, and at the end of the year, wrote a check to a charity to offset some taxes. Today, one of the fastest-growing business models is for-profit philanthropy: For each product purchased, either one is given to a person in need, or part of the proceeds are used for a good cause. From an inventor who created a puncture-proof soccer ball, to four Wharton School alums who make glasses, to a designer who sells ties in order to give children proper school uniforms, these new philanthropists are redefining charity. This trend started with TOMS Shoes and its trademarked One for One platform, becoming the benchmark for companies that give back by designing products that are not only socially responsible but also coveted in their own right.
"The more advice we got from people in the philanthropic world [like the TOMS team], they were saying nonprofits need to be run more like businesses."
— Tim Jahnigen
After introducing him as "one of the most interesting entrepreneurs I’ve ever met," at the 2009 Clinton Global Initiative, Bill Clinton sat down with TOMS Shoes founder Blake Mycoskie and asked: "Why do this as a business instead of outright philanthropy?" Mycoskie explained that during a 2006 vacation to Argentina, he witnessed children without shoes, and "watched as these kids [received donated shoes] that were not even new ... and not really the right sizes, and I thought ... there’s got to be a better way to solve this problem." He surmised he could create a sustainable "for-profit business ... based on a buy-one, give-one model." He further explained, "I worried about starting a charity and being dependent on people’s donations." Rather than folding in lean times—or failing to meet commitments from previous years—TOMS, now in its sixth year, has given away more than a million pairs of shoes.
Inventor-producer Tim Jahnigen experienced his aha moment after watching a 2006 CNN special about kids in Darfur playing soccer with trash and rags, and, even worse, rocks. "It hit me like a thunderbolt," recalls Jahnigen, who was wearing tennis shoes sewn from the same plastic used to make Crocs. "I could make a ball out of this stuff and get it to these kids." At the time, he was working on the Rainforest Foundation benefit with Sting, who offered to help him get started in what would become One World Futbol. "The more advice we got from people in the philanthropic world [like the TOMS team], they were saying nonprofits need to be run more like businesses," says Jahnigen, who has donated some 50,000 of his blue soccer balls to 130 countries through One World’s Give One, Get One program.
"I wish there were a million TOMS and Warby Parkers."
— Neil Blumenthal
Neil Blumenthal founded Warby Parker glasses in 2010 with three classmates from Penn’s Wharton School of Business, after five years giving away glasses with the social enterprise VisionSpring. Blumenthal had learned the impact that proper eyewear can have: Visual impairment costs the global economy $3 trillion in losses annually. He also realized how easy it was to make top-quality, design-conscious specs at a low price, and to give back while doing it. Warby does everything online, with face-recognition software and free shipping for home try-ons, for just $95 per pair. Now that Warby Parker has become a profitable business—the company has already been able to give away 100,000 pairs thanks to its "buy a pair, give a pair" philosophy—Blumenthal believes it can be a model for new companies to follow. "You should be stakeholder-centric, not shareholder-centric," says the entrepreneur, who’s getting some friendly competition from TOMS, which announced its own eyewear line last year. "There are almost a billion people that need glasses," he adds. "I wish there were a million TOMS and Warby Parkers."
When that day comes, they’ll be joined by Heather Hasson, who in 2010 started her own philanthropic brand, FIGS (Fashion Inspired Global Sophistication). In just two years’ time, FIGS has provided 10,000 school uniforms to more than 100 primary schools in Kenya, Tanzania, and Nepal by selling ties and scarves online. For every product purchased, a needy child is given a school uniform. "Ever since I was 19, I’ve been putting children in uniforms," says Hasson, who first started to outfit schoolchildren in Vietnam in 2002 after leaving college. Previously a designer of men’s loungewear, Hasson noticed that many kids in Africa wore ties with their uniforms. A simple question arose: Why not merge her two passions, design and philanthropy, by making stylish ties? "It’s a tangible object [that customers] are going to use. Plus, they can promote the fact that they’re good people who are helping out," she says, noting that this new wave of for-profit charities is becoming a global head-to-toe outfitter. "Everybody plays their part and does what they’re good at."
This philanthropic overlap—including corporate sponsorships and strategic brand development—looks like the future of the for-profit universe. One World Futbol is blazing the trail with a number of partnerships: In exchange for substantial contributions, they’ll make balls in a company’s proprietary colors. Jahnigen hopes to launch puncture-proof balls for other sports including American football and basketball, increasing his company’s charitable footprint exponentially. He’s also developing an indestructible foam bicycle tire to fit multiple size rims. And never wearing out is key. Like TOMS, Warby Parker, and FIGS, philanthropists like Jahnigen are in this game for the long haul.
Michael Slenske writes regularly for RL about art and culture.