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TOMS shoes and the 'Buy One, Give One' business model

Volunteers helping children with new TOMS shoes. Some critics believe the company's business plan is flawed.
Volunteers helping children with new TOMS shoes. Some critics believe the company's business plan is flawed.
Volunteers helping children with new TOMS shoes. Some critics believe the company's business plan is flawed.
Children being fitted with new TOMS shoes, as a volunteer wearing a "Make Jesus Famous" t-shirt walks by.
Volunteers helping children with new TOMS shoes. Some critics believe the company's business plan is flawed.
A child who already has shoes being fitted with a new pair of TOMS.

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There's a good chance you've heard of TOMS, the Santa Monica company that makes slip-on shoes and is firmly established in fashion-conscious L.A. The company has become as famous for its laid-back style as its creative marketing – the company promises that for every pair of shoes purchased, it will donate another pair to a child in need.

Now other companies are trying out similar business models. For example, if you buy a pair eyeglasses from Warby Parker, it gives a pair away. And a start-up called Two Degrees gives a meal to a malnourished child for every nutrition bar it sells.

But none has been nearly as successful with the so-called "Buy One, Give One" model as TOMS. The for-profit company has sold more than two million pairs of shoes and is at least a $100 million enterprise.

Reporter Amy Costello has been looking into TOMS for her podcast Tiny Spark, which reports on charitable organizations and the business of doing good.

Perhaps the most obvious reason for TOMS' success comes down to the founder Blake Mycoskie.

"I think part of Blake's success with TOMS Shoes has to do with his media appeal," said Costello. "He's 35, curly haired, very handsome and incredibly charismatic. And, as you know, for better or worse, these things do help when you're trying to get media attention."

But as Costello reports, Mycoskie has used these features for less philanthropic ends. In 2002, he competed on the television show "The Amazing Race," and prior to that he was Mr. Tennessee and on the FOX show "America's Sexiest Bachelor."

"In my story, I describe a guy who has really always been chasing the media spotlight," said Costello.

And despite all the praise for his TOMS business, not everyone is convinced by the company's positive impact in developing countries. Laura Freschi from NYU critiques the production of TOMS, whose factories are located in China, Argentina and Ethiopia.

"I'm concerned that TOMS sort of creates the impression that there are no shoes to be purchased in some of these communities, when in fact there are vibrant local economies," Freschi said. "And in many of these places where they're giving shoes, people are producing shoes ... in some cases the 'buy one, give one' model practiced this way could be harmful to those local producers and sellers."

Other socially-conscious entrepreneurs have taken note of the criticism. Patrick Woodyard, founder of shoe company Nisolo, considered the TOMS model but ultimately decided against it. "It's not a sustainable model," he said. "It's not addressing the root of the problem, which is marginalization or poverty ... the purpose of what we try to do with Nisolo is to take it a few steps further to generate a micro-economy, to create jobs."

Woodyard's decision was partly informed by his experience on a "shoe drop" in Peru, one of the ways TOMS delivers its shoes. Although Woodyard went with another organization, the experience was not what he expected.

"Just about every child who came in had shoes ... and it wasn't the beautiful exchange that's often times advertised by TOMS shoes ... there's not really room for growth on behalf of the person being helped, or self-empowerment for that person and for long-term change in their life," Woodyard recalled.

And Costello said Woodyard's experience can even be seen in TOMS own promotional material. "If you go to TOMS' own website, you will find image after image of children who clearly already have their own shoes, being fitted with new TOMS shoes."

Counting the number of TOMS shoes given away also raises questions about the partners it uses to distribute shoes. It relies on the "Giving Partners," a group of non-profit organizations with many Evangelical Christian groups.

Costello found photos of missionaries in Rwanda putting TOMS shoes on kids while wearing t-shirts that said "Make Jesus Famous."

Costello also discovered a blog entry by an American evangelical visiting India who wrote about how her colleague stood before a group of children at the TOMS shoe distribution and said, "These shoes are not from us, they are from people around the world who want to give them to you, they are a blessing from the Lord."

Correction: An earlier version of this article incorrectly stated that TOMS, at times, "blatantly violated" U.S. government restrictions on evangelizing while giving out aid. In fact, TOMS does not contract with the U.S. government. It's a private company and as a result is not subject to those regulations. Costello's story never alleges violations of any laws.


Amy Costello is host and senior producer of the podcast Tinyspark. Find Costello's podcast here.