Vivek Nemana is a graduate student in economics at New York University and works for DRI. I remember wanting to save the world when I bought my first (and only) pair of TOMS Shoes. I was a freshman at NYU and involved in a handful of Save the Child Soldiers/Darfur/Fair Trade student clubs. With TOMS, just $50 of my (parents’) money would buy two pairs of shoes – one for me and one for a poor shoeless child somewhere – plus raise a few dollars for one of these clubs. Besides, those shoes were hip.

Looking back—and looking around me now at the high TOMS saturation on campus—I realize that TOMS Shoes is extremely well-marketed, extremely popular, bad aid.

TOMS follows a Buy-One-Give-One (BOGO) model where a customer pays for both pairs of shoes. But buying poor children $25 shoes is simply not cost-effective. Donating clothes to the poor in poor countries is not the same as, say, donating winter clothing to the homeless in New York. For one, shoes don’t cost $25 in the areas where TOMS donates; local shoe salesmen will sell footwear for much, much less. While TOMS insists their giving is considerate of the local economy, they don’t explain how. At its worst, local shoe merchants can’t compete with the continual influx of free shoes. (TOMS produces its shoes in China, Argentina and Ethiopia and gives them in 24 countries.) It’s funny how TOMS can call itself a “movement” and yet get away with offering very little information on the movement’s business practices or measured impact.

Consider how else you could spend those $25 you invested. If the aim of wearing shoes is to prevent soil-borne diseases such as hookworm, then $25 would go much further if invested in sanitation. You might give to an NGO that builds latrines, for example, which serve more people and last years longer than a pair of shoes. (For an extensive explanation of these and other problems with the TOMS model, read Peace Corps volunteer Zac Mason’s blog or the Good Intentions are Not Enough blog.)

So why did I buy TOMS that day? I’d venture that my personal reasons weren’t all that different from hundreds of other college kids like me. We come to college wanting to do good. At the same time, we want to buy cool things. So it’s exciting when these two come together, and we get the chance to give back as we consume. TOMS is literally a prime example of what Slovenian philosopher Slavoj Zizek calls “cultural capitalism”: you combine acts of goodwill with acts of consumption (Zizek sees this as a sort of personal redemption for being a consumer).

We buy TOMS Shoes or Fair Trade chocolate or poverty-fighting water bottles because we genuinely want to help. But in the frenzy of do-gooder consumption we stop thinking all the way through. We fail to ask how our money will help, and we overlook how our good deeds might actually do harm. We forget that what we want to do for others might not be the same as what they really need.

It’s too convenient to hand our credit cards to businesses that promise to do good; making a real difference also requires information, accountability and careful consideration. We talk extensively on this blog about NGO accountability. Shouldn’t customers ask the same of their favorite social entrepreneurs?

-- Photocredit: Flickr user loveandmusic18