Toms finds one-for-one charitable model doesn’t add up for its business
Toms, the pioneer of the one-for-one charitable model, will no longer donate a pair of shoes to a child for each pair purchased. Instead, it plans to give a third of annual profits to local community-focused organizations.
The change comes amid a major rebrand and product overhaul. In December 2019, creditors took control of the debt-laden company from Bain Capital and founder Blake Mycoskie amid bankruptcy rumors and several years of sales declines.
Founded in 2006, the maker of Alpargata canvas footwear earned wide praise over the years for its one-for-one model that has also been adopted by Warby Parker and Bombas.
Toms said it began exploring the broader philanthropic model when it began working with organizations pledging to end gun violence that culminated in the brands’ $5 million pledge in early 2019 as part of its End Gun Violence Together campaign. By November 2019, Toms announced it was starting to invest $1 of every $3 customers spent with a group of humanitarian organizations to expand the scope of its charitable impact.
Tom’s decision to end one-for-one giving comes as extensive research shows Gen Z are looking for brands supporting a range of social issues. The new impact program will focus on promoting mental health, ending gun violence and increasing access to opportunity.
Amy Smith, Toms’ chief strategy and impact officer, told Fashionista that the new “1/3 of Profits for Grassroots Good” model provides greater flexibility to evolve philanthropic efforts as communities’ needs change. Toms also expects to be able to put more marketing and outreach support behind the grassroots approach. Mr. Smith said the one-for-one model likewise redistributed a third of profits, but the new model should prove more sustainable.
“We had hundreds of shoe giving partners, and that’s too much to manage,” she told Glossy.
Toms’ management recognizes that some older customers will be disappointed by the abandonment of the one-for-one model. Chief marketing officer Ian Stewart told Bloomberg, “We may lose some of them [Millennials], and that’s OK. You sometimes need to lose some to gain some.”
- 1/3 of Profits for Grassroots Good – Toms
- Toms Undergoes Its Biggest Rebrand — Inside the Company’s New Business Model – Footwear News
- Toms Is Officially Leaving The One-For-One Model Behind — And Doing This Instead – Fashionista
- ‘Chapter 2’: Toms abandons one-for-one model, in new bid for Gen Z – Glossy
- What Ever Happened to Toms Shoes? – Bloomberg
DISCUSSION QUESTIONS: What, if anything, does Toms’ decision to end its one-for-one charity model say about cause marketing at this point in time? Do you think Toms’ customers will see the change as a positive or a negative development?