Around this time of the year, many shoppers are looking for the perfect gift for their loved ones, and some want their gift to go that extra mile that makes a difference.
A 2013 Cone Communications/ Echo Global CSR Study revealed that, if given the opportunity, 92% consumers would buy a product with a social and/or environmental benefit. But despite great success with consumers, businesses based on a social entrepreneurship model still have a long way to go to overcome prejudice.
Critics argue that social entrepreneurship, especially businesses based on the "buy one, give one" model created in 2006 by Blake Mycoskie, with the founding of TOMS, are unethical, and hurt more than they help:
"First and foremost, aside from the fact that I find the majority of BOGO businesses extremely unethical - 'Buy a pair of our glasses--that cost $1 to make-- for $150... and we will give a pair of different, cheaper-made glasses to someone who needs them!' - ... I completely agree with the statement that the BOGO model actually hurts more than it helps," Ali Maadelat, President of The Lorenz Marketing Group said in email interview. He added "When you do a BOGO for a local area, you effectively demolish the well being of anyone in the area who had a profession in that industry."
Maadelat is not the first critic of the BOGO model, nor the last. He joins countless experts who believe that the "The TOMS buy-one-give-one model does not actually solve a social problem."
However, BOGO models are not designed to "solve" problems. Instead, they are designed to make a difference, to inspire social entrepreneurship, and change. Because many critics consider this model unethical, BOGO businesses need to find ways to overcome prejudice if they want to thrive. The best way is to prove that their business model is ethical - that they don't sell crap at inflated prices in the name of charity.
Runway Baby Organics founder and owner, Ana Cristiana, found just the way to address this issue:
"BOGO businesses can and should be based on an ethical model, that stimulates growth in underprivileged areas. For my Book in a Blanket product line, I use Pakucho Organic Cotton from Peru, the best, most luxurious organic yarn in the world, GOTS certified at the source. I design the items myself, and have them produced in the local factory in Peru, at their prices. This stimulates growth, instead of slowing it down."
For every candle sold, Altered Seasons, a traditional candle making company based in Buffalo, NY, provides a warm meal to an American in need through the Feeding America Foundation. While this is not necessarily a BOGO model, it is still a great example of how social entrepreneurship can make a positive impact without being unethical.
"Altered Seasons uses all natural eco-friendly soyblend wax to hand-pour our 100% American made candles in 42 unique fragrances," said Kelly Reddington, company founder and owner. "We shouldn't let the fear of undermining local businesses deter us from doing the good that we can do now. If we observe that the aid is contributing to an unsustainable economy, then we would take our new found knowledge and create a better way. There's so much that needs to be done to help people, that any criticism is really just going to fall flat on the ground."
Even if BOGO businesses approach social entrepreneurship ethically, they are still facing many challenges:
"In my opinion, there are no effective and/or ethical BOGO companies out there," added Maadelat. "They are either taking advantage of people by making it seem like they're making a difference... Or they are woefully uninformed about economics and are hurting more than they help."
Still criticism doesn't stop BOGO advocates. Blake Mycoskie found another effective way to bring social entrepreneurship in focus, by creating TOMS Marketplace this November, reinforcing the belief that everyday purchases can create positive change. This could be the best approach for BOGO and social responsible businesses to fight prejudice: united for a better cause. In this, TOMS Marketplace is special, and effective:
"Many items here give in different ways. Some provide improved livelihoods and economic opportunity to individuals who otherwise might not find employment. Other products use a portion of their proceeds to support education, fight hunger or fund reforestation."
BOGO is no longer a trend, but a strong business model, with more and more advocates around the world. It is a response to customer demand, and will grow stronger and stronger, in spite of its critics. With TOMS Marketplace launched, media experts expect "One for One" gifts to be among the most popular choices this holiday season.