One-for-One Companies: Helpful or Harmful?

Abstract

One-for-one companies, such as TOMS and Warby Parker, have become a common occurrence in the marketplace. These companies promise to donate a good or service for every product purchased. To date, millions of products have been donated worldwide. This paper seeks to analyze the positive and negative impacts of the one-for-one model on both the one-for-one company and the people receiving product donations. A specific focus of the paper is to determine whether the one-for-one model is helpful or harmful to companies and beneficiaries. To gather information, I contacted sixteen one-for-one companies and asked for reports, gathered preliminary research completed by news outlets such as Forbes and the New York Times, and analyzed academic research. The study finds that the one-for-one model can be both helpful and harmful, depending on the conditions in which the giving is done. For example, if there is an immediate need for a good that cannot be produced in the beneficiary country, then a donation would be beneficial. However, if a donation such as shoes ultimately takes away jobs and reduces the market in the beneficiary country, then it causes more harm and long-term damage than it prevents. As this model becomes more common, it is important that consumers know the impact of their purchases on the beneficiaries and the companies know the benefits and repercussions of their actions.