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Bain Makes Deal with Charitable Business, TOMS

Toms Footwear
Toms Footwear

Earlier this month, TOMS, charitable footwear company announced that it sold a 50 percent stake to Boston-based private equity firm Bain Capital. The company is best known for its canvas casual shoes and buy-one-give-one campaign, which gives shoes to children in need. TOMS was reportedly valued by Bain at $625 million.

TOMS did not disclose financial details otherwise. The senior vice president for marketing and communications at TOMS, Doug Piwinski,  said that founder Blake Mycoskie will still retain 50 percent ownership of the company and utilize half of the money raised by TOMS in the deal to help create a new fund benefitting social entrepreneurship.

“One of Blake’s main goals is diversifying the product offerings,” Piwinski said. Since the founding of Toms in 2006, it has grown to serve other basic needs beyond shoes. The new TOMS Eyewear business will provide a person in need with a pair of eyewear for every pair purchased. TOMS Roasting Com will also give one week of clean water to a person in need for every bag of coffee that is purchased. In the past eight years, the company has given over 25 million new pairs of shoes to children in need and helped provide restored sight to over 250,000 people.

“This partnership will enable TOMS to grow faster and give to more people in more ways than we could otherwise,” said Mycoskie. “In eight short years, we’ve had incredible success, and now we need a strategic partner who shares our bold vision for the future and can help us realize it. We’re thrilled that Bain Capital is fully aligned with our commitment to One for One, and clearly they have the expertise to help us improve our business and further expand the scale of our mission.”

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6 Tips on Becoming an Ethical Shopper

How to Become an Ethical Consumer
IMG: via Shutterstock

While a lot of us may know in the back of our minds that a lot of the food or clothes we purchase may not be ethically made, a lot of us choose to forget it. Not everyone has money to donate or time to volunteer, but you can help make a change by paying attention to what you buy.

Buy Fair Trade

“Fair trade” products are always the best option – this guarantees that whoever made the product you purchase was paid a living wage. People who are able to sell their items at a living wage can fend for themselves and don’t require more charity – helping the economy to grow.

Read the Fine Print

When a product says that “A portion of this purchase will be donated to ____,” make sure to read the fine print before buying. Companies know that a consumer is more likely to buy a product that says this – but how much of your purchase is actually going to help a cause? Unfortunately, many companies only actually donate 1-5% of your purchase to charity – and while that is better than nothing, it is not a reason to buy the product if you wouldn’t normally.

Buy Products That Match Your Purchase As a Donation

Companies like Toms are known for donating a pair of shoes to a child in need for every pair you buy. Buying products like this may be a bit more expensive, but your are basically buying two: one for you and one for someone else.

Buy From Farmer’s Markets

Farmer's MarketIf you are close to a farmer’s market, take advantage of it! The food is fresh, local, generally organic, and helps to support your community. Farmer’s markets are usually cheaper than groceries stores, and generally taste better!

Go Through Your Closet

First off, go through your closet and donate anything you haven’t worn in the past year. Then, take a good look at your clothes. While a $10 shirt may seem like a great option – was the company really able to pay their workers a living wage off of that? That doesn’t mean that a $50 shirt is any better – but get to know the brands that you buy. Find out what type of labor practices are used for the stores you shop at, and decide if you need to make a change.

Shop Small Business

While buying a book off of Amazon may be easier – supporting your local bookstore can be just as cheap. I generally try and buy everything in stores to help support local businesses – unless of course the only place I can find something is online or it is significantly cheaper. If you want to have local and independent businesses in your town, make sure to support them.

Have any tips to share? Post them in the comments below!

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Philanthropy: Available at a Store Near You

For a long time, causes and capitalism ran on parallel yet separate tracks: philanthropists and entrepreneurs alike worked endlessly in order to gain attention and support from the public. Companies sought profit while charities sought aid. Today more consumers are seeking products, services, and retailers that use their influence and their means to support a good cause. Some  People want companies that give back to the community, and retailers have eagerly met this demand. Some companies host short-term campaigns in order to raise awareness and funds for a cause while others have established long-term, committed associations with philanthropies that they believe in. The companies and campaigns highlighted below illustrate how when a capitalist and a philanthropist collide, a new wealth of opportunities arise.

Target, one of the largest discounters in the U.S., is proud of their long history of philanthropy. Target has been donating 5% of their income to local communities since 1946. Their focus on charity has expanded since, and last year they launched an agenda called “Here for Good” that hosts programs surrounding education, the environment, safety & preparedness, and well-being. These programs, coupled with their social services, crisis relief, and their military and veteran support, Target has received accolades for their corporate social responsibility.

A brand-new glasses retailer, Warby Parker, had combined their cause with their product before the first pair of spectacles sold. For every pair of glasses that the company sells, they provide funding and/or glasses to a non-profit organization VisionSpring that trains men and women to sell glasses in developing countries. This model creates jobs while also providing glasses to a few of the almost one billion people worldwide in need of glasses. So far Warby Parker has distributed over 150,000 pairs.

Warby Parker’s model follows in the footsteps of the capitalism-cum-charity giant, TOMS. TOMS began in 2006 as a socially-conscious shoewear company that donates a pair of shoes to a child in need. TOMS founder Blake Mycoskie’s motivation for the company is simple: “If I started a charity, I’d have to go raise money every time I wanted to give them shoes. But if I started a business and made a shoe where the consumer liked it for what it was, then the consumer will be my natural provider of the shoes every year.”

TOMSBy September of 2010 TOMS had donated over 1 million pairs of shoes, and their popularity had exploded. Since its founding, the company has also put on an annual event called One Day Without Shoes that raises awareness for their cause, and they have established campus programs for passionate, involved students. TOMS has been praised as one of the most innovative retail companies of this decade, and it has been the exemplar of the for-profit-as-non-profit movement of the last decade.

These companies have created an easy link between consumers and charity; consumers are able to feel socially conscious and philanthropic while they get to buy the products and services they want. Meanwhile non-profit organizations get access to reliable funding sources and widespread exposure to their cause. The relationship benefits both parties, and most importantly, it benefits the people who need it most.