Last year, GiveDirectly made headlines for doing just that: giving cash directly to the poor. The charity makes monetary transfers to households in Kenya and Uganda. There are no eligibility requirements for the transfers and no strings attached to the funds. Ninety-two cents of every dollar donated to GiveDirectly goes directly into the pockets—or, more specifically, onto the mobile phones—of recipients.
GiveDirectly offers a simple solution to the complex problem of poverty, promising to avoid the overhead, corruption, and inefficiency that plague many charitable schemes. It’s a return to one of the oldest solutions to poverty, yet in the age of cause marketing and corporate social responsibility it seems new and novel. The market has seduced us into believing that buying goods is doing good.
It’s not a choice between the perfect and the good, only a parade of wolves masquerading as sheep.
Most of us want to do good, but few of us know how. Take the meteoric rise of activist brands like Toms Shoes and Ethos Water. Toms is a for-profit company that has thrived on the “buy one, give one” model of consumer spending: for every pair of shoes hipsters buy in Brooklyn, the company donates a pair of shoes to children in need. With business booming, the company is expanding its empire from shoes to eyewear. Ethos Water is a Starbucks subsidiary that donates five cents to water and sanitation projects around the world for every bottle sold.
Pay $1.80 for a bottle of Ethos Water every day for a year, and you’ll have donated less than $20 to the cause of clean drinking water. For the $48 you might have spent on ikat-patterned, soft-soled Toms Shoes, you could buy a similar pair of cloth shoes and have $24 left over to direct to charities meeting children’s needs: not just shoes, but food and health care. In almost every instance, we can do more good by buying fewer goods or less expensive substitutes and donating the surplus directly to charities instead of filtering it through a corporation.
There very well may be such a thing as caring capitalism, but the last few years of cause marketing evidence the opposite: corporations re-branding themselves with charitable causes seem to have funded the brands more than the causes. Both Toms and Ethos Water have made hundreds of millions of dollars while donating a million pairs of shoes and a few million dollars; both companies have also come under additional scrutiny for failing to honor their philanthropic promises. For Toms, it’s where they manufacture their shoes and how their shoe donation practices fail to generate long-term benefits like jobs or infrastructure; for Ethos, it’s their steep mark-up on the designer water and the environmental costs of millions of plastic bottles.
When criticized, these companies usually claim that beyond dollars donated, they are raising the profile of some of the world’s most important causes. But they’ve shown how it is more expensive to raise awareness than to simply raise money directly. Take Product Red, the branded campaign to end HIV/AIDS that partners with companies like Apple, Gap, Hallmark, Nike, and Theory. These partners license the Product Red logo for their products and then donate a portion of their profits on those Red products. Today, Product Red claims to have donated $240 million to The Global Fund to fight AIDS, malaria, and tuberculosis, but in 2007 it was lambasted for having invested $100 million in advertising and raising only $18 million for its cause.
The perfect can certainly be the enemy of the good, and these corporations have shielded themselves from criticism with the defense that any donation is better than no donation. But this suggests consumers have no alternatives, in their consumption or in their charity. It’s not a choice between the perfect and the good, only a parade of wolves masquerading as sheep. There are more than a million charities in the United States alone; we even have charities that rate and rank other charities. There is no shortage of deserving organizations to which you can donate your money, and your donation will likely do more good if you make it directly.
Ethics don’t often scale well, so why outsource your charitable giving to a corporation? In the case of Toms, buy their shoes if they’re what you want, but if you are only buying them because you care about children in need, then just buy the brand your heart truly desires and donate the equivalent amount or support manufacturing where those children live by buying shoes from Sole Rebels, Nisolo, or Oliberté Footwear.
One of my resolutions for the New Year is only five words: buy less; donate more dollars. I’m not buying that $39 Product Red iPhone case, instead I’m donating directly to The Global Fund; rather than buying a new pair of shoes to advertise my charity on my feet, I’m making do with the shoes in my closet; instead of buying bottles of Ethos Water, I’m drinking from the tap.
It’s not that I won’t ever buy accessories or shoes or bottled drinks, though I do hope to buy less of everything this year, it’s that when I do buy things I don’t want to mistake my shopping for charity. I want my spending to reflect my ethics, not corporate gimmicks.
