When Bain Capital, one of the world’s largest private equity funds, bought 50% of hippie-idea-turned-conglomerate TOMS Shoes in August 2014, some observers in the philanthropy world questioned the seemingly strange marriage. But not Blake Mycosckie, the TOMs founder who created his shoe and accessory company on a “one for one” philosophy: for every pair of TOMS shoes (or eyewear) sold, another is donated to someone in need.
Mycoskie sees the $625 million Bain-TOMS partnership as an innovative, trend-setting way of doing the business of philanthropy in 2015 and beyond – literally and figuratively. Corporations, major brands, investment firms and high-profile foundations are increasingly getting involved in nonprofit, charitable or public-private programs focused on the common good.
Growing Corporate Involvement
TOMS is by no means the first business nor the first successful business person to conscientiously earmark company profits to worthy causes, campaigns and foundations with lofty goals. Here are a few examples of others:
- The Bill & Melinda Gates Foundation, created by the founder of Microsoft, has donated more than $31 billion to initiatives around the world in four key areas: economic development/poverty, global health, education, and public-private policy research and advocacy support.
- Goldman Sachs, another major global investment firm, has a division dedicated to Social Impact Bonds, public-private initiatives that address and solve community problems with funding from private investors in partnership with agencies and service providers. Current projects: educational programs for Chicago preschoolers and a New York City program to reduce recidivism rates among teens who have served time in jail.
- YUM! Brands, the company behind KFC, Pizza Hut and Taco Bell, has long been a corporate supporter – money, donated food, volunteers — of World Hunger Relief programs around the world, with donations of $150 million to date.
Why do corporations and brands get involved in philanthropic and corporate social responsibility programs? Because doing so makes good business sense all around – for the people who are helped, for employees, and for consumers. Nielsen’s 2014 global CSR survey found that more than half of consumers (55%) are willing to pay for products and services from companies that are dedicated to causes that support positive social and environmental change, and other studies find that employees of such companies are more productive and exhibit higher morale, as well.
Because they know their way around budgets and bottom lines, businesses that engage in charitable efforts should also be able to bring a sense of accountability to the process. They can layer tried-and-true business practices and data-tracking to the process to make sure that outcomes are real and results are measureable. The ability to prove a program’s tangible impact satisfies the needs of consumers and donors who want assurances that something good happens as a result of their donations or involvement. And participating companies and brands earn the respect of a public eager for deeper business participation in efforts that create a better world.
Look for increasingly accountable business giving and CSR initiatives in 2015: more corporate involvement, more transparency, and a greater insistence on results-oriented data that can keep involvement high and donations flowing. Consumers, and the modern marketplace, are demanding this kind of change – and we think 2015 is the year we’ll see it finally start to happen.