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Thursday, September 26, 2013

The TOMS dilemma: more harm than good?

Over the past few years, you've probably seen a lot of these. In 2006, TOMS was founded on the principle of Buy One, Give One (BOGO) – for every pair of shoes sold, another pair is donated to someone in need in the developing world. At first glance, it seems like a great idea.

Unfortunately, giving AID isn't always so straight forward.

They saw children who needed shoes and decided to do something about it. The problem is that a lack of shoes is a symptom of the true issue of poverty: children don’t have shoes because their families can’t afford to buy them. It isn't about a lack of shoes, rather a lack of jobs.

At least they’re giving children shoes though, right? Well, not quite.

When companies use the BOGO model improperly, they can have a harmful effect on the local businesses where the goods are being donated. For every pair of TOMS that a child receives, a local shoemaker is losing potential income. This means fewer jobs for families, less income, and more poverty.

On top of the loss of income, there is also the issue of the inefficiency of sending some goods. Let’s look at the example that a former Peace Corps volunteer used to illustrate this point.

Take a school of 1,000 children somewhere in the rural developing world. Parasites like the hookworm and other infections are common, especially as the students need to walk through areas that local communities have begun using as a latrine. An immediate thought would be to buy the children shoes – at approximately $27 / shoe that would cost $27,000 and would help the issue for 2-3 years before the shoes wore out.

On the other hand, for $2,000, a concrete latrine could be built for the community, and for $27,000, 12 more could be built to benefit other communities. This solution would last for decades and would help tens of thousands of people.

Good intentions can sometimes fuel the problem more than help it.

In contrast, there are companies like Sole Rebels, who are doing great things with shoes. Bethlehem Tilahun Alemu, an Ethiopian woman, wanted to bring jobs to local communities in Ethiopia by making shoes. She hires all of her workers locally, which provides jobs to those in need.

If the true problem is a lack of work, then find a way to create more jobs. It is so important to truly understand the root of the issue that’s being dealt with to avoid causing more harm than good.

Giving AID can be done right, it can help.

Here are just a few of the guidelines that HOPE International Development Agency uses when sending goods overseas to ensure that we don’t create similar issues.

Work with local partners
Goods that we send overseas need to be useful to the people they’re benefiting. We work with partners locally and only accept goods that they feel are appropriate for the current situation.

Provide goods that aren't readily available
If what we send takes jobs away from the local people, we’re only aggravating the issue. We focus mainly on medical and pharmaceutical supplies that aren't readily available to rural communities.

Buy locally
When goods that are needed are available through local businesses, we support them by purchasing whatever we can in-country. This also ensures that jobs aren't being lost.
There are many considerations that we take when sending goods overseas to ensure the quality of the products and the safety of the people being helped. When it comes to development work, it is so important to connect with the people who know the issue – this ensures that the aid being provided truly does benefit the people being helped.