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Spending for Impact, Round 2

A View from the Cave, aka Tom Murphy is back…and he’s not finished. Last week he wrote about Spending for Impact. He’s got more to say on the subject…

Last week, I wrote on the PDT blog that it would be more effective for people to buy a cheaper product and give the rest to an organization that will support local economies rather than buy the latest pair of TOMS shoes, water bottle from Starbucks or t-shirt from (RED). The next day Melissa Kushner, founder and Executive Director of Goods for Good and also a partner with TOMS, published a rebuttal to critics of TOMS in GOOD. I do not take it to be directed to me, but the timing drives me to address some of her points made in GOOD.

Kushner points out that interventions by TOMS and Goods for Goods are paired with existing government interventions in Malawi as a means to strengthen what is being provided.

The Malawian government provides notebooks and de-worming tablets to schoolchildren. While these are both worthwhile interventions, their impact falls short without complementary support. That’s a great scenario when goods donation works. What good is a notebook to a child who cannot write in it because she has no pen? Likewise, how effective is a de-worming tablet to a child who has no shoes to protect him from future hookworm infections?

Goods for Good helps to enhance these initiatives by distributing pens in conjunction with the government’s notebooks and TOMS along with the Ministry of Health’s de-worming program. By coupling interventions, both parties are more effectively meeting the common goal of caring for children in need.

This begs the question; where do the shoes and pens come from? Kushner neglects to mention this, but we know that the shoes are not locally sourced because the only TOMS factory is in Ethopia. This means that the distribution of the shoes, while increasing attendance and decreasing health problems, do nothing to improve the root reason children do not have shoes: their parents cannot afford them. Wouldn’t it be better to provide money so that shoes can be bought locally, jobs can be created and kids can access the same benefits?

Shoes for sale in Kpandai, Ghana

Shoes for sale in Kpandai, Ghana. Photo credit: Don D'Souza on Untapped Markets.ca

If labor opportunities are not created, the following generation will have better educated parents who are still without jobs. However, it appears that Goods for Good is supporting vocational training through its uniform program.

By working with communities, Goods for Good observed that missing uniforms weren’t the only problem of course, the reason children couldn’t afford uniforms was because many parents had no income. Instead of providing finished uniforms directly to the children, we provided raw fabric to the community to fully leverage the good, allowing us to address both problems. Through their own initiative, local tailors organize vocational tailoring courses for guardians of schoolchildren and they create uniforms for younger orphans in the community.

Assuming that the fabric was purchased in Malawi, this is a great way to spur work by providing the opportunity for people to make the uniforms, learn a trade and earn an income. In addition, the materials coming from Malawi means that other businesses are supported in the process. This is what should be done. It is not what TOMS is doing.

All in all, Kushner and Goods for Goods are doing some things right. The defense for TOMS misses the point as it does not address any of the main concerns expressed by critics. Critics of the model, such as myself, do not question that providing shoes can have a positive impact on the immediate lives of the recipients. Health will improve and attendance will rise because of it.

It is the question of whether providing free things is the most effective solution. Buying products locally will always be a better option in trying to reduce poverty. There are times when a product cannot be found locally, but shoes, pens, and fabric are certainly not part of the exception.

 

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5 Comments

  1. Tom,

    I agree with your basic argument that it would be more effective for people to buy a cheaper product and give the rest to an organization that will support local economies rather than buy the latest pair of TOMS shoes, water bottle from Starbucks or t-shirt from (RED). But, this isn’t true if the alternative is that the consumer is going to buy a pair of shoes or water bottle or t-shirt from a producer that doesn’t have any social at all. One must assume that people buy water bottles and shoes first because they need water bottles and shoes – the choice of where to buy them is influenced secondarily by the attractiveness of participating in a social mission through that purchase.

    So, of course, if the consumer’s primary purpose is to impact the world for good, there are lots of more efficient and effective ways to go about it – but that’s not the primary purpose of those purchases, is it? I mean, clearly, Joe in line at Starbucks has a more effective solution to poverty at his avail should that be his purpose. He could, in theory, take his money and give it to someone to buy a product locally produced in Malawi (and not give it to anyone because that would be providing free things). But Joe is thinking about getting a water bottle today and he thought this might be better than the options not associated with a social mission.

    And, although often true, locally sourced doesn’t necessarily mean better. One might argue that “the root reason children do not have shoes” is being addressed in Ethiopia where the jobs ARE being created. Is this bad because it’s not Malawi, where the shoes are being used? Or is it good because parents in Ethiopia can afford to buy shoes thanks to their factory job, and parents in Malawi don’t have to because they’ve been given shoes and can spend their money instead on some other necessity of priority. And what is a ‘root’ cause anyway. There is always another step back you can take and say, ‘no, the REAL root cause is such and such.’

    This said, I still love reading most of whatever you write and will continue being a fan. Keep up the good work.

  2. David Week says:

    I agree with your critique, but would like to add another.

    What is the difference between cash and a pair of shoes? Well, you can spend cash anyway you like, whereas there is basically only one thing you can do with a pair of shoes: wear them.

    Both represent extremes. Giving cash puts no constraints on the assistance. Giving shoes constrains it completely. The message in giving shoes is (and I draw here on the words of John McKnight, in “Professionalised Service and Disabling Help”):

    We know what your problem is
    We know what the solution to your problem is
    We will provide the solution to your problem.

    Giving cash is laissez-faire. Giving shoes is paternalistic.

    There is a middle road, which is the kind of negotiation produced by strong community engagement, in which problems are jointly identified, and solutions jointly produced. For a number of reasons, which I think are well known to development professionals, this approach is:

    More ethical
    More effective
    More sustainable.

    It recognises the moral right of people to control their own lives, including the solutions to their own problems; it recognises that they have detailed and essential knowledge of the challenges they face; it recognises that afterwards, they will remain while the donor is gone.

    At the same time, it recognises the donors’ right to give only to something they find acceptable; and that they too might know something helpful.

    I can’t see that there’s much that’s there’s much merit in that either the extremes, laissez-faire or paternalism, in comparison.

  3. Tom says:

    Aaron and David, thanks to both of you for your comments. I always appreciate then experience that you share.

    Aaron – I agree with you on the point of people wanting to buy goods. In my previous post, I argued that they buy the cheaper good and use the remaining sum to support a project they like or a local market. Therefore, they can get the same good and have an impact. Inherent in these campaigns is the idea that both can be achieved. On the basic level that is true, but when thinking about maximizing impact I believe it can be done through direct giving.

    You are definitely right about the shoe factory in Ethopia. That is a good thing. What I would add to that is that an even better solution would be to support a local market for that factory. In short, get shoe sellers to buy and sell the shoes from the TOMS factory. Then, people can support projects which give people in need of shoes the opportunity to buy the shoes. In the process this can support the factory and local businesses which can lead to job creation.

    Finally, the idea of getting to the root of poverty is one which is certainly hard to define. I am glad you called me out on that. To be more precise, I believe that impact should be discussed on the immediate and future returns. In the case of giving away shoes, the immediate is improved health and the future is less health problems. To me, poverty (a very large word itself) is what creates a situation where children are without the ability to own a pair of shoes. I believe the most effective programs will work to address that. For me that means creating opportunity for business growth and job creation (aka development). It can and should be done in conjunction with aid. All of that is even a larger conversation that can circle ’round quite a bit.

    David – I agree with you on the middle of the road. Giving away shoes is not completely bad, neither is giving away money completely good. Rather, I think that the two can be achieved in coordination. So, free shoes can be given away that are sourced and purchased locally by an NGO. This supports local business why addressing a local problem.

  4. […] buying a shoe or sending soap. As blogger Tales from the Hood argues, these aid projects can help (many also make things worse) but they aren’t going to solve the underlying problems of poverty and disease nor lead to […]

  5. […] buying a shoe or sending soap. As blogger Tales from the Hood argues, these aid projects can help (many also make things worse) but they aren’t going to solve the underlying problems of poverty and disease nor lead to […]


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