In recent years, there has been a greater focus on using your power as a consumer responsibly. For many, this involves supporting brands they believe in and finding alternatives for companies that don’t share their values. With more and more companies adopting social missions than ever before, this poses an important question: Does supporting a cause-driven brand actually make a difference?
In this article, we’ll take a look at different types of cause brands and some of the considerations to make when deciding whether or not to support a particular company.
Different Ways of Giving
There are many innovative companies on a mission to help make a difference, but often their business models fall into one of a few different categories. If you’re not familiar with some of these models, we encourage you to look into some of the businesses that use them.
1-for-1, buy-one-give-one… it goes by different names, but you’re almost certainly familiar with the model popularized by TOMS Shoes. Companies using this model typically donate a product for every one they sell.
When choosing to support a company using this business model, it’s important to understand if the company is meeting a legitimate need through their donation. Does the recipient of the donation want and need the item that’s being donated? This question grows more complex when the donation is made to a recipient from a different culture. Does the person receiving the donated item want it, or do we just think they want it? This model can be great for getting a valuable resource to someone in need, but it’s best to try to understand more about the problem it’s attempting to solve.
Rather than donating a product, other companies donate money to a particular cause. Sometimes this may be a certain dollar amount on every purchase or it may be a percentage of the company’s total profit. This is particularly effective when the mission of the company is to help a cause that doesn’t benefit from the donation of a physical item. For example, researching the cure for a disease or cleaning up pollution are both issues that require funding to make a change.
Most nonprofits are constantly searching for funding sources to carry out their work. For-profit businesses donating to these causes can make a meaningful impact and support the work of these nonprofits. Unfortunately, some companies can use deceiving language to make their contributions appear larger than they really are.
Here’s a cheat sheet to know what each claim actually means:
Revenue - This is all the money that a company generates.
Profit - This is a concrete term that is calculated by taking a company’s revenue and subtracting all of its expenses.
Proceeds - This can refer to revenue, profit, or a number of other calculations. Basically, this term means whatever the company wants it to mean.
Companies using some form of impactful operations carry out their normal business activities in a way that benefits a particular cause. You may be familiar with practices like fairtrade, where businesses source products from producers in developing countries, promising to pay a fair price for the goods. Many brands are expanding on this concept, choosing to work with other businesses that are veteran, woman, or minority-owned.
Even the materials in products can be used as a way of enacting change if the company chooses to use recycled, upcycled, or other environmentally friendly materials.
As with companies donating a portion of their proceeds to a cause, there is the risk of a company simply claiming they’re using responsible operations and supply chains. Additionally, they may be operating their business ethically in one area, but cutting corners somewhere else.
As more people begin to recognize the impact of their purchases, some companies choose to align with a social cause as a marketing strategy. It’s been given names like “cause washing” and “woke washing”, but it comes down to companies wanting to look like they’re doing a good thing to help drive sales.
With the potential for brands to abuse the trust of their customers, how can you tell which ones are genuine?
Companies that are actively making a positive difference shouldn’t be afraid of people learning more about them. They should be transparent and share information about who they’re helping and the impact of their work. In addition to the information provided by the company itself, checking reviews and news articles can be a helpful way of figuring out if a brand is truly having an impact.
It’s hard to argue that mission-based brands haven’t had an enormous impact. Our friends at Woodchuck USA have been able to plant millions of trees on 6 different continents. The hat company, Love Your Melon has donated over $7.1 million to non-profits conducting pediatric oncology research and supporting children battling cancer. This list goes on.
Many companies are making a profound impact and bringing attention to important issues. Supporting charitable companies can be a great way to use your buying power responsibly, but having a positive impact doesn’t end with your purchases.
While cause brands have thrived, some traditional charities have suffered. We’ve become accustomed to getting a fun product in return for our support, but many issues aren’t a strong fit for a charitable for-profit model. Instead, it is still important to donate your time, ability, and resources.
This reaches beyond the buying habits of individuals, with some people looking to invest in charitable companies as an alternative to charitable giving. The reality is that not every cause is a good fit to generate a financial return or give you a product for your support. The issues that are important to you still need any support you’re able to provide.
We originally launched Hippy Feet on a 1-for-1 model, donating a pair of socks for every pair sold. Through the thousands of interactions with the homeless community in our area, we began to realize that donating socks was just a band-aid fix. We were simply addressing a symptom of homelessness rather than a cause. It’s this desire to do more that lead to the creation of our Pop-Up Employment program.
We believe that the most effective way to give is to empower someone in need. It is essential to respect another person’s human dignity and help provide them the tools they need to reach self-sufficiency. Our mission is at the core of our business. By providing jobs to the homeless through our packaging, embroidery, and screenprinting, Hippy Feet products don’t exist without helping someone in need. We trust and provide resources to our non-profit partners, recognizing them as the experts on homelessness.
Finally, we realize that our work is never done. There will always be a way for us to better support the homeless community and the youth we work with. We appreciate any feedback from our customers, non-profit partners, and the young people we serve as we work to have a more meaningful impact.
What are your thoughts on the subject? Do you have a favorite mission-based brand? Do you prefer to support causes in some other way?
Let us know in the comments below!