Skip to content

A tryst with TOMS

Vivek Nemana is a graduate student in economics at New York University and works for DRI.

I remember wanting to save the world when I bought my first (and only) pair of TOMS Shoes. I was a freshman at NYU and involved in a handful of Save the Child Soldiers/Darfur/Fair Trade student clubs. With TOMS, just $50 of my (parents’) money would buy two pairs of shoes – one for me and one for a poor shoeless child somewhere – plus raise a few dollars for one of these clubs. Besides, those shoes were hip.

He's right about the quote, however.

The real "Chief Shoe Giver" is you, the customer.

Looking back—and looking around me now at the high TOMS saturation on campus—I realize that TOMS Shoes is extremely well-marketed, extremely popular, bad aid.

TOMS follows a Buy-One-Give-One (BOGO) model where a customer pays for both pairs of shoes. But buying poor children $25 shoes is simply not cost-effective. Donating clothes to the poor in poor countries is not the same as, say, donating winter clothing to the homeless in New York. For one, shoes don’t cost $25 in the areas where TOMS donates; local shoe salesmen will sell footwear for much, much less. While TOMS insists their giving is considerate of the local economy, they don’t explain how. At its worst, local shoe merchants can’t compete with the continual influx of free shoes. (TOMS produces its shoes in China, Argentina and Ethiopia and gives them in 24 countries.) It’s funny how TOMS can call itself a “movement” and yet get away with offering very little information on the movement’s business practices or measured impact.

Consider how else you could spend those $25 you invested. If the aim of wearing shoes is to prevent soil-borne diseases such as hookworm, then $25 would go much further if invested in sanitation. You might give to an NGO that builds latrines, for example, which serve more people and last years longer than a pair of shoes. (For an extensive explanation of these and other problems with the TOMS model, read Peace Corps volunteer Zac Mason’s blog or the Good Intentions are Not Enough blog.)

So why did I buy TOMS that day? I’d venture that my personal reasons weren’t all that different from hundreds of other college kids like me. We come to college wanting to do good. At the same time, we want to buy cool things. So it’s exciting when these two come together, and we get the chance to give back as we consume. TOMS is literally a prime example of what Slovenian philosopher Slavoj Zizek calls “cultural capitalism”: you combine acts of goodwill with acts of consumption (Zizek sees this as a sort of personal redemption for being a consumer).

Come to think of it, I never wore my TOMS even once.

We buy TOMS Shoes or Fair Trade chocolate or poverty-fighting water bottles because we genuinely want to help. But in the frenzy of do-gooder consumption we stop thinking all the way through. We fail to ask how our money will help, and we overlook how our good deeds might actually do harm. We forget that what we want to do for others might not be the same as what they really need.

It’s too convenient to hand our credit cards to businesses that promise to do good; making a real difference also requires information, accountability and careful consideration. We talk extensively on this blog about NGO accountability. Shouldn’t customers ask the same of their favorite social entrepreneurs?


Photocredit: Flickr user loveandmusic18

This entry was posted in Aid debates and tagged , , , , . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.

20 Comments

  1. joe wrote:

    I’d argue that the whole fairtrade ‘movement’ is pretty much the same model. Whatever benefits are accrued from the tiny percentage passed on from the consumer, they’re going to be small in comparison with the premium paid.

    But then, y’know, we have this in-built sense that we want to ‘do good’ and cling onto any tiny sense that we can continue consuming and at the same time make some difference.

    Posted November 12, 2010 at 5:07 am | Permalink
  2. Chris wrote:

    This is all fine, and I agree, but they’re not mutually exclusive. Fairtrade is not the best, but the alternative is to buy agricultural goods from questionable sources. If you’re going to buy bananas, is it better to buy them from an exploitative plantation or a Fairtrade certified one that guarantees, whether it’s perfect or not, at least some semblance of care for work conditions and pay.

    Posted November 12, 2010 at 5:46 am | Permalink
  3. I agree with all the traditional criticisms of BOGO models, and those levelled at TOMS shoes here.

    However, I do think that ‘BOGO’ is an entirely different proposition when the products are being in the beneficiary region. It can become too easy to brand all uses of the method as bad aid, without investigating a little further.

    I write more on this in thisblog article.
    (Disclaimer: I work for a social enterprise that uses a BOGO sales technique for products manufactured in Kenya and Zambia).

    Posted November 12, 2010 at 5:55 am | Permalink
  4. Tate wrote:

    I agree — not a fan of the TOMS white-people-stuff-dropping business model: http://shortsentences.org/2010/03/16/toms-shoes-out-competing-local-entrepreneurs-since-2006/

    Posted November 12, 2010 at 8:32 am | Permalink
  5. Aditi wrote:

    Vivek – I completely agree with you. I purchased a pair of TOMS earlier this summer – the worst part was that I am an avid follower of the blog, and a student in development, and I KNEW that when I bought them, they were part of a bad model of giving. Yet I bought them anyway because I got caught up in the hype of conspicuous consumption. If more people asked for accountability TOMS might not exist, but the problem is that not enough people are aware that they should and can ask for accountability….

    Posted November 12, 2010 at 9:49 am | Permalink
  6. Christos wrote:

    Vivek Nemana

    This is a classic case of dumping. In fact, a case can be made that the private sector is destroyed one-by-one because of recipient governments’ appetite for free stuff and the donor willingness to provide them. If you take the inventory of what is given free of charge (good luck finding data, since government officials are the primary wholesalers) you will find every conceivable products being dumped in the market below the cost of production locally.

    It used to be religious organization provided charity for limited populations. But, Aid turned in to governments providing excess commodities bought from corporations and corporate foundations decision to join for many reasons, often approached and sometimes blackmailed to give more by non governmental organizations.

    The bottom-line; the recipient countries’ markets are over saturated by excess free products-destroying every incentive of the local businesses and entrepreneurs while exacerbating corruption by government officials who, by design are the only entity in a position to receive the goods and sell them in the market, sometimes use them to prop up the regime.

    Noting will stop the relationship the precipitants and the donors until it is dealt officially by the law makers of the donors’ countries. Who would dare to challenge ‘helping the poor’- a brand name for the poverty industry?

    In reality it is helping the corrupt officials and hope it will trickle down to the poor.

    Posted November 12, 2010 at 10:10 am | Permalink
  7. Mike wrote:

    These are all totally fair arguments. I think the key is whether or not you can prove that the delivery of these shoes (or their production in the countries you list) is harming people. If it is actually harming people then it is a bad situation.

    However, the “$25 could be spent better elsewhere” argument is useless because that is not how non-aid people think. They want to be passive helpers. They will never spend $25 on hookworm treatment…but on a pair of shoes…sure! Look at the influx of disaster relief in countries they aren’t afraid of (I.e. Haiti not Pakistan)…people aren’t interested in sustainability. They are interested in tangible, instant gratification.

    If Toms shoes are making these societies worse off, then it should be called out on it. But if the criticism is that they aren’t doing aid as effectively as they could…well, that’s probably because they are a brilliantly marketed for-profit company, not an aid organization.

    Posted November 12, 2010 at 10:39 am | Permalink
  8. I’m currently living in South Africa. After spending some time here it’s obvious that donations will never get to the heart of the real issues. How is a family supposed to function if the parents aren’t providing, and the children aren’t going to school? I think if you want to be a business that goes out of your way then you should offer needy people employment. That’s real sustainable change. That’s why I started 94.

    Posted November 12, 2010 at 10:58 am | Permalink
  9. Andy wrote:

    Agreed Mike. I bought TOMS a couple years ago when I first discovered “fair trade”. I was flipping through a catalog they sent me and couldn’t help but realize that even though they claim to target places where the “local economy won’t be affected”, they are still practicing dumping and my $25 is probably better spent someplace else.

    However, I didn’t spend that extra $25 because I was trying to invest it wisely in economic development of the poor – I spent it because I wanted cool shoes. It is difficult to measure the net benefit of that $25 but it is quite possibly still a positive despite the negative externalities.

    I think the case is a lot stronger for “Fair Trade” than BOGO models. Let’s face it, I’m a well off rich, white American. Yes, I’m going to give some money to microfinance organizations and medical AID, etc. But I’m still going to buy bananas and coffees and chocolate. To the extent that I’m willing to pay more for Fair Trade, it probably comes out of other consumption dollars rather than cutting into my charitable giving. So overall, shifting my consumption from non-Fair Trade to Fair Trade is likely a net positive for the global poor. Would it be even better if I reduced consumption and donated that money to a build a well or some other noble good? You betcha. But good luck convincing me to give up my coffee. It just isn’t going to happen for me or the other millions of caffeine addicts.

    So instead, convince us to spend a little more on coffee so that the coffee growers can make a little more per pound and invest that in their families, communities, and businesses. I’ll just have to spend a little less on Chinese garbage in exchange.

    Posted November 12, 2010 at 11:13 am | Permalink
  10. Amy wrote:

    TOMS shoes isn’t perfect, but it is a great model for promoting social business. The point of business is finding a niche in the market. TOMS found that, obviously. The primary problem with social business though is the fact that business has to find a profitable market. A lot of the time, the primary social issues that need to be addressed cannot make a profit – or entrepreneurs have not yet found how they can make a profit (or at least create a sustainable company/organization). That’s why charities and philanthropy are still so necessary. There are some issues that businesses just cannot successfully address.

    At least TOMS has found a small way to utilize the good intentions of users. The fast is that a lot of the consumers who buy TOMS would not take the time to invest their money in other programs. Offering a product at least mobilizes profits that would otherwise remain in strictly for-profit businesses and economies. TOMS also provides jobs in the countries that it has factories. You complain about the shoe-makers that are affected in these countries, which they are and that’s hard, but TOMS is also providing jobs to hundreds of other people and specifically makes sure they receive equal pay and conditions as if they were US employees. Is that okay, or not? You also say that the shoes in these other countries cost less than $25. True, but these people still cannot afford those prices or they would have bought the shoes, correct? TOMS is providing them for free. Is it wrong to provide a product for free to a populace that would not be investing in them otherwise? It does create dependency, which is a problem in EVERY aid organization, but it doesn’t undermine the economy like you imply it does.

    There is definitely a point you made that I completely agree with though. When investing make sure you KNOW what you’re investing in. Too many programs in the aid sector inefficiently and ineffectively use millions of donor dollars, and yet they are never required to be accountable for it. Greater transparency and better evaluation of these companies for investors is a MUST. Luckily, those working in this sector are painfully aware of this and are realizing now that to attract investors, they must have quantifiable statistics and be accountable for their spending. The aid sector is becoming an incredible new arena!

    Posted November 12, 2010 at 11:21 am | Permalink
  11. Don Stoll wrote:

    No doubt you’re aware, Vivek, of the related phenomenon of multinational and multimillion-dollar commerce in so-called “dead white people’s clothes.” The Ghana-born writer Meri Nana-Ama Danquah explains that Africans assume “only death could separate a white person from such wonderful clothing.” Ms. Danquah refers to “skinny, bootleg, stonewashed, stretch” jeans, or “T-shirts advertising products, Web sites, conferences and other events” or clothes makers like The Gap. She also repeats the familiar charge that this trade in used rich-world clothing—ironically “orchestrated by charitable multinational organizations” wishing “to provide various forms of relief”—offers “low prices [which] undercut local retailers and undermine the entire textile and garment business in Africa.”

    Incidentally, “dead white people’s clothes” led to a bizarre experience for my wife at a Lions Club meeting last spring near San Francisco, at which she had hoped to win some financial support for our small nonprofit that does development work in rural Tanzania. A number of her hosts reacted with suspicion and even hostility to the documentary film about our projects that she screened, suggesting that it looked like the children in the village where we work, far from being poor, had all bought their clothes from The Gap. Unfortunately, the film shows Africans smiling and even laughing. In her post mortem of the debacle, my wife speculated that her hosts had wanted to see flies on children’s faces.

    Posted November 12, 2010 at 11:28 am | Permalink
  12. Casey wrote:

    I agree with Mike above. Though your argument rings true to those of us that are genuinely involved/interested in development and aid, the common consumer is not fully aware of how dollars can be maximized to bring the greatest benefit to said country. As has already been said, TOMS is taking advantage of a model that gives people the sense that they are contributing to solving a problem in the world with little effort. These shoes have become a huge trend across college campuses. They are, ultimately, functioning on a for-profit business model. Maximizing aid effectiveness is not their first interest.

    But, I dont think it’s fair to criticize a shoe company for not allocating their funds differently. They’re a shoe company. Logically, and from an effective marketing standpoint, they will want to invest in shoes in the developing world, not infrastructure and sanitation.

    Posted November 12, 2010 at 4:43 pm | Permalink
  13. Vivek Nemana wrote:

    I’m going to respond to several people in one comment. Hope that’s alright (you know, economies of scale and what not).

    So Mike and Andy, you both have a great point that many customers would not otherwise spend $25 directly on hookworm treatment. If TOMS were to instead say, “For every $50 pair of shoes you buy, we’ll invest half of that into effectively improving sanitation and treating hookworms,” would it be as popular? I’m not really sure; it’s certainly not as sexy. Perhaps customers who would pay, say, $35-$40 on cool shoes anyway are willing to add $10 so that needy children can get their own pair as well. But there is so little information available about TOMS that it’s hard to say whether the net aid effect is positive or negative.

    Fair trade is different from BOGO (and this goes with Joe’s point too) in that the aid is focused on the supply side — farmers form co-ops to grow sustainably and earn a livable wage. I’ve heard theoretical arguments against fair trade (i.e. high prices encourage oversupply which then lowers prices on the whole), but nothing too convincing; I’ve studied fair trade a good deal and I think that as it stands it’s a good method supported by those willing to pay for the goods. Yes, it has its share of problems and there are high premiums because of the small-scale production, but ultimately the benefits that do go to the producers help them in a sustainable, wholesome way.

    What irks me — fairly or not — is that so many people happily engage in do-good consumption under the pretext that they’re helping someone without considering where their money is going. I’ve had so many conversations with buyers of fair trade products who didn’t know the difference between fair trade and free trade. But since it’s a tall order to change consumer mindsets, shouldn’t these businesses at least provide enough information so that third parties like us (as well as the many, many interested customers) can see where that money is going? Fair trade already does this with certification, but why can’t social businesses who profess to being good be more candid to prove what they’re doing is good? It’s not exactly trade secrets we’re asking for.

    It’s a tired old track on this blog, but it ties in with how when people with good intentions give to fulfill a sense of responsibility but forget to take the extra step to ensure they’re giving right (I think this is human nature), they contribute to bad aid (obviously misguided donors aren’t entirely to blame). This is why accountability and transparency is so important.

    Yikes, look at the time! I have to run, but I do want to respond to several others later. Also Don, it seems like poverty porn is quite popular in Lions Club meetings near San Francisco, as well as most of the country.

    Posted November 12, 2010 at 5:43 pm | Permalink
  14. Jess' wrote:

    No one has pointed out that, in addition to being bad aid, Tom’s are not great shoes. They are basically slippers, with a soft cork-y sole, which a tack or nail could go right through. That right there makes them untenable in the developing world, let alone anywhere else.

    Posted November 15, 2010 at 6:17 pm | Permalink
  15. Nora wrote:

    I agree the extra money (however much it is) would likely be better spent getting to the heart of the problems. But I also wonder where everyone that hates TOMS is getting their clothes from? If I need a pair of shoes, wouldn’t it be better to buy a pair for 50$ when a pair is being donated to a child that needs a pair of shoes? Sure, it would be better to do something like build a well or provide mosquito nets or something, but doing something is better than nothing.
    When buying shoes, why is TOMS any worse than any other brand? In fact, isn’t it better? Sure, if there was a company that sold shoes and donated a certain percent to fill-in-your-favorite-cause, that would be better. But if you’re going to buy shoes anyways, why not buy a pair for a child too? Yeah, they don’t cost 25$ in a third world country.
    BUT- here’s the thing…
    A student needs/wants a new pair of shoes. They’re trying to choose betweent Nike and TOMS. Maybe they love them both, but they choose TOMS because of the pair donated. It’s not like if they bought the Nikes, they’d automatically donate money to a worthier cause.
    It isn’t the best use of money. But I don’t understand how TOMS is any worse than every other company. Wranglers, Adidas, Crocs…. why NOT buy TOMS?

    and fyi, they are ridiculously comfy. that’s not why i’m defending them, but it is worth noting. some people wear them because they LIKE them :)

    Posted November 17, 2010 at 11:21 pm | Permalink
  16. Vivek Nemana wrote:

    Nora,

    It’s perfectly fine to buy a pair of shoes that you like, obviously. That’s one of the things that’s great about capitalism, democracy, etc. If you’re going to pay $50 for shoes anyways, then why NOT buy TOMS?

    But Nike and Adidas don’t pretend to be socially conscious companies. TOMS does. For a company that professes to be a “movement,” to market heavily saying that they’re going to “change the world,” they can consider doing things that are more effective. People often compare TOMS to other shoe companies, but I don’t think that’s the right way of looking at it. I think we need to compare TOMS to other social entrepreneurs. Which then brings us to the question, why DOESN’T TOMS invest in better aid? If people like TOMS Shoes and want to buy them, and people like to do good, then it should work right?

    Here’s an idea: TOMS could use the excess revenue to subsidize the local shoe industry. That way cheap, quality shoes made locally will be available to children who need them. They could use their extra revenue to construct latrines. That way schools will be cleaner and safer for children. Instead of just “completing school uniforms so kids can go to school” (which, I’m sorry, sounds idiotic to me), they could work with local organizations to provide incentives for student and teacher attendance.

    TOMS is poised to do so many different things. Then why give away shoes? Maybe because few things are as cathartic as seeing pictures of the handsome Blake Mycoskie put shoes on the feet of beautiful, smiling children in a humble village.

    Posted November 18, 2010 at 6:16 pm | Permalink
  17. Talia wrote:

    I am so glad this debate is going on. Hopefully those behind TOMS will see it (or things like it) and respond with the accountability necessary to back up their brand. I give them the benefit of the doubt that they really are trying to do a good thing here. (Maybe I’m biased after having worked for a Fair Trade social enterprise, but, while I would always advocate FT over BOGO, I think there are a lot of good people out there trying to do the best they can for the world’s poor. And a lot of us wear TOMS while we do it because it’s the best choice we have access too.)

    But as a student of development in first an Economics program and then a broader Global Affairs program (NYU), I have to bring up a point that I feel is lacking in this discussion. It isn’t something quantifiable, and so many economists may acknowledge it but then leave it out of their theories. Yes, a $25 investment in vaccines might get you more bang (and by that I mean less hookworm) for your buck, but

    what does a pair of shoes do for a child?

    Consider two alternatives- A child gets a vaccine but still walks shoeless to fetch water, gather firewood, maybe get to school or to a market. They may not get hookworm, but they do get blisters and burns. Their feet ache, and in between chores and studies they have no inclination to run and play and be creative and inspired- to be a child. OR, A child gets a pair of shoes, which prevent hookworm, albeit more expensively, and those shoes preserve the part of their body that will carry them for their entire lives. They can run and play with their friends; if they can get to school (because we all know shoes aren’t the only barrier) they are better able to focus and more creative in their studies; they can perform chores more quickly and with less pain, helping their families earn money or grow food. What does that second scenario do for their lifelong human development? And what does a community of children with shoes mean for the social and economic development that they can create as they grow up?

    I realize that $25 could alleviate the suffering of 25 children with vaccines, but will it still leave them shoeless? And the person (consumer) who provided the $25 for their shoes wasn’t going to provide it for vaccines- that has already been pointed out by previous writers. So in our academic and professional lives, let’s work as hard as we can to get all the vaccines available to all of the people that need them. And while we’re working, let’s wear TOMS. And Fair Trade jewelry and clothes- which is often cheaper than what you find in NY! and not priced at a premium as many believe. (Try http://www.greenheartshop.org if you want to check out that claim.) And let’s eat Fair Trade food where we can get it, all the better if it’s organic. These systems do come with challenges and glitches, but there will always be market distortions, especially in the developing world. And as we work on solving those distortions one by one and creating a better, more efficient AND more equitable global economy, we can choose the best options available for our own inevitable consumption. Overall, I think that’s a big step in the right direction.

    Posted November 19, 2010 at 1:22 am | Permalink
  18. Vivek Nemana wrote:

    Talia,

    What about $4 on shoes and $21 on vaccines and sanitation?

    Thanks,
    Vivek

    Posted November 19, 2010 at 11:32 am | Permalink
  19. Padmavathi Nemana wrote:

    I totally agree with Casey. TOMS is doing business. A business person’s main goal is to make big profit not charity. TOMS is using people’s good heart to double its sales. When they tell they will donate one pair of shoes to some poverty ridden kid, people will buy 2 pairs instead of one. This way they double their profit and at the same time they can do some charity work. They are getting two birds in one shot. I do not look at it as charity. I look at as a clever business strategy. I buy TOMS shoes only if I like them and want to wear them, not because I can donate a pair of shoes to some poor kid. I rather donate that $25 to a local charity like soup kitchen.
    By the by walking without shoes may create problems to some people but certainly not as horrible as it is described by TOMS or people from rich countries would like to believe. I love to walk with bare foot many times (not because TOMS challenged, because I love to have the touch of mother earth).

    Posted November 19, 2010 at 5:37 pm | Permalink
  20. Aid Watch reader wrote:

    Great post. In addition to interfering with local markets, TOMS also depends on local NGOs to identify recipients, distribute shoes, and monitor results. While it’s good that the company tries to ensure that shoes go to those who need them (and to collect some data), TOMS ends up burdening and diverting the efforts of local nonprofits that are already stretched too thin. They also assume that their ready-made solution is needed in contexts where the underlying problems may vary widely (and not call for shoes!). Where I work, the government has already made significant efforts to distribute shoes to children – yet TOMS shoes continue to come in and end up on the black market.

    Donating a percentage of profits to organizations who understand their populations’ needs would be a much more effective strategy from an aid standpoint. Unfortunately, this traditional form of corporate philanthropy would likely make the TOMS brand less sexy, thus decreasing sales and donations (whether in-kind or monetary).

    Posted November 21, 2010 at 8:05 am | Permalink

4 Trackbacks

  1. By Tweets that mention A tryst with TOMS -- Topsy.com on November 12, 2010 at 1:50 am

    [...] This post was mentioned on Twitter by Bhaskar Dasgupta and OpenEye Group, Conduit Journal. Conduit Journal said: A tryst with TOMS http://bit.ly/9V0Z67 [...]

  2. [...] A tryst with TOMS – Aid Watch [...]

  3. By Bem de luxo « De Gustibus Non Est Disputandum on November 12, 2010 at 10:24 am

    [...] Ser de esquerda e verde quando se tem grana, Sony Vaio, e dois carros na garagem é um comportamento típico do adolescente rico que se envergonha da riqueza (Simon Schama era o nome do autor-referência aqui, né?). E isso não é uma exclusividade do Brasil, como se vê aqui. [...]

  4. [...] econ grad student Vivek Nemana’s echos these thoughts much more eloquently in an AidWatch blog post: We buy TOMS Shoes or Fair Trade chocolate or poverty-fighting water bottles because we genuinely [...]