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Social Good is Always Good Branding—Or is It?

Stanford Social Innovation Review | March 18, 2016

CREDIT: Shutterstock.

The following excerpt has been republished with kind permission from Stanford Social Innovation Review. It was written by Anne Miltenburg.

These days, businesses that put their social mission in the spotlight are taking the world by storm. But building a brand solely on social impact is not a guarantee for success, and it comes with risks. Social enterprises and other businesses should consider these five points before making social good the star of their show.

1. When a business's impact model comes under fire, the entire business can suffer.

To make their social impact clear cut to the public, businesses often simplify transactions: A purchase means another product is donated to someone in need, or the percentage of a sale goes to a good cause. But it's not always so simple, and when this social impact model comes under scrutiny and is intertwined with the brand, companies risk losing credibility and sales.

Tom's Shoes is a well-known case in point. Tom's has built its business on the now much-replicated buy-one give-one model, resulting in more than 35 million pairs of shoes donated to children across the world—one for each pair sold through its commercial channels. The company has put buy-one give-one at the front and center of its brand—an easy-to-understand impact model its customers love to support and be associated with. But in recent years, Tom's philanthropic model has garnered criticism pointing out that products donated to developing countries often distort the local markets, undercutting local suppliers and contributing to unemployment. The company has faced headlines linking it to social harm—the exact opposite of what it set out to achieve. Tom's is developing a new impact model—one that addresses these issues—but it will be far less easy to capture in a four-word phrase.

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Read More: Business, Development, Ethics, Sustainability, Innovation

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