People living in poverty often can’t afford to buy essential things like clothes and shoes. People living in richer countries often have an excess of these things. So it would help if the rich sent some of their spare products to poor countries … right?
This is the conclusion that many projects have come to before, only to learn that shipping off ‘spare’ products to give away in developing countries doesn’t always lead to poverty reduction or sustainable development and can do more harm than good. The products given away can undercut the local market, putting the local producers and sellers out of business and even pushing more people into poverty. The cost of collecting, shipping and distributing the products could go a lot further if spent buying the products locally, thus supporting jobs and wealth creation at the same time.
In recent years different businesses and charities have tried new ways to convert the purchasing habits of richer countries into benefits for poorer ones. One example is the RED project– where big name brands release a ‘RED’ version of their product, and a percentage of the profits goes to support HIV and AIDS programs (up to 50% in some cases). These types of projects have not been without controversy– some claim that they equate supporting poverty alleviation to a purely transactional relationship and don’t go far enough in engaging consumers in the root causes of the issues they are supporting – "I have a RED™ iPod so I’ve done my bit for HIV and AIDS this year, right?"
At The Global Poverty Project we are passionate about effective aid and building awareness about the differences between ‘good’ aid and ‘bad’ aid. This has led to many heated debates over the merits of different models of giving and donating and we haven’t been able to reach a consensus. This week we decided to look at two consumer giving projects that have generated the biggest debates at the office – TOMS Shoes and the relatively new Project Repat.
TOMS Shoes
TOMS Shoes are manufactured in Argentina, Ethiopia and China and are sold in developed countries such as the US and UK at a competitive price. For each pair of shoes sold, TOMS gives a pair to a child in need around the world, even in the US. They partner with local humanitarian organisations that have a long-term presence and experience in the countries they work in, to identify and distribute to the communities that would benefit from their shoes without jeopardising small, local businesses.
TOMS promote a ‘One for One’ motto and have given over 1 million shoes to 23 countries in 2010. They continue to supply these same communities as the children grow out of each pair, creating a lasting partnership for change.
How does this contribute to poverty alleviation?
Most people would question the importance of shoes to poverty alleviation. However, TOMS was founded as a solution to the “hundreds of millions of children at risk of injury, infection, and soil-transmitted diseases that most can’t afford to prevent and treat.”
Shoes are more important than we think. Do you remember the saying ‘no shirt, no shoes, no service’? Going barefoot is a major barrier to things like school or jobs even in developing countries. TOMS protects more than a million children from health risks to their feet and spine but also allows many to get a step closer to an education, a job or inclusion… and they provide children with a brand new pair of shoes, not a second hand pair that no one else wanted.
But the thing I like most about the company is that they’re creating jobs. So far, TOMS has opened 3 factories in the regions they serve, creating fair wages and working conditions that help support more families. People love their shoes, so it’s more of a sustainable business model than most NGOs since they will continue to generate profit to increase their capacity to give.
What are the risks / missed opportunities?
My biggest concern with the TOMS model is that at the end of the day, it’s just another handout. Although they’re creating jobs, they’re not supplying local businesses with free shoes to boost their profits. Although I think they’re doing great things by finding a solution to the problem right away, you could still argue that TOMS avoids the root of the problem in these communities, which is that these families can’t afford basics like shoes. And if these families can’t afford shoes, chances are they can’t afford things like school fees or health care. While this model has many benefits, it doesn’t empower communities to make their own change, instead mimicking an established pattern of dependency.
Project Repat
 “Project Repat purchases amazing t-shirt castoffs from secondhand markets around the world, brings these spectacular t-shirts home with our team of volunteers, and then rebrands and resells the shirts in the United States in support of nonprofits active in the developing world. At Project Repat, we're harnessing the power of your old t-shirt to support developing world markets far away and local nonprofits around the corner.”
– Project Repat Website
How does this contribute to poverty alleviation?
Project Repat are not suggesting that those who live in poverty are waiting for someone to bring them a t-shirt and do not give handouts. Instead, the project exploits the existing market of second hand tees in the developing world and sells them in the US – making a double profit that goes directly to community projects in the country where they were bought. Exploiting this relationship to raise funds for charity is taking advantage of a great opportunity.
Like RED, this project is a fundraising model rather than a donation model, which is important as it can respond to the shifting priorities of the communities it supports. 100% of the profits go to the non profit organisations working in the countries where the t-shirts are sourced and the purchase of the t-shirt before resale supports local markets in Costa Rica, Tanzania, Hawaii, Kenya and other places.
This model doesn’t require a new product to be made and so doesn’t encourage manufacturing issues or costs – it recycles ones which are already out there. And for those concerned with the carbon footprint of shipping the t-shirts back - their website explains how small this actually is compared to making a whole new product. It also reminds us of how interconnected our world is – a t-shirt donated to charity in the US can end up in a market in Tanzania, which is then bought back to be resold in the US with profits going to projects in Tanzania… The shirt is a physical link to these communities and would provide a reminder to the consumer each time they wore it.
What are the risks / missed opportunities?
Project Repat is pretty new – so it will be interesting to see how they can scale up the model to create lasting change. At the moment, shirts are sourced by volunteers, but how much time would their volunteers need to search for shirts if demand grew? Is that sustainable?
The flooding of African markets with cheap or donated clothes is responsible for damage to local textile industries. Rescuing these few shirts doesn’t make a difference to that in the long term, although it does raise awareness of the problem.
Finally, there is no symbolic connection between the t-shirt purchased in the west and the problems of poverty in Tanzania– some might argue that this is an important awareness raising element of one for one models such as TOMS that is missed by Project Repat.
Conclusions
So what can we learn from these two models?
First, we all agree that with any type of project like these, there are important questions that need to be asked: is this making things better or worse for the community it’s serving, and what are the long term impacts both abroad, and at home on the public’s perception of aid? If they’re having a negative impact, the model needs to be changed.
But we can also conclude that although some of these projects may not be the best or most holistic solution for the problem they’re trying to tackle, they may be at least part of the solution. Water charities only focus on water and don’t address hunger, education-based charities don’t address health issues, women empowerment charities often leave out men. Most organisations and projects don’t have the capacity to tackle more than one issue, but that doesn’t mean they’re not still needed.
It might sound like we are asking a lot of aid projects – they need to be effective, responsible, have long term sustainable, scalable impacts and also inform, engage and inspire the public to act for change. But bad aid projects literally have the ability to endanger lives and livelihoods of the communities they serve, and cause people in developing countries to become disenchanted and misinformed about development.
This is a debate that we hope to continue at the Global Poverty Project. We believe in supporting good aid.
What do you think? |
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