I am currently conducting preliminary research on the impact and sustainability of the Buy-One-Give-One model, as a means for effective fundraising options.
For those who are familiar with this model, could you kindly share your thoughts/insight for the following questions? it will be highly appreciated and of good use for doing "good."
- For over a decade or more, TOMS, Warby Parker and Pampers have been incorporating the B1G1 (Buy-1-Give-1) model to sell their products and to ‘do good’. To date, TOMS has given away over 88 million pairs of shoes, WP tens of millions of glasses and eye tests, and Pampers over 300 million MNT vaccines. Would the Centre for EA define these companies as “effective” forms of altruism?
- How does the EA team measure “effectiveness?” Is compassionate consumption really the best way to alleviate global suffering and to reduce economic inequalities? Can you really change the world, one purchase at a time?
- What are your primary reservations of the B1G1 model and the causes that they support (free shoes, eye wear or vaccines)?
- Are these companies making a lasting difference to global health and development or is it merely a marketing gimmick?
- How could these companies ‘do good’ better or is the model fundamentally flawed? For example, they are not handing out de-worming tablets or insecticide treated bednets, which are proven to be more effective?
- A core part of EA is cause-neutrality. However, the three B1G1 companies all focus on a cause linked to their products, rather than a value for money/ effective product (You can’t eat shoes nor specs). What are your thoughts?
- TOMS, in response to criticism of its shoe giving model, has partnered with local shoe manufacturers to make a third of their products in the communities that they give to. This seems like a more efficient way of giving and creating local capacity. Does this iteration of TOMS make it a more effective form of altruism?
- Should Pampers not be looking at more institutional/systemic issues around newborn and maternal child heath? When over 5 million children under 5 continue to die each year, is it fair to call the Pampers initiative a ‘simplistic’ stop gap measure for children who may not even make it beyond 5 years of age?
- These B1G1 companies have mobilized millions of consumers to ‘do good’. I argue that they should keep the momentum going by encouraging these customers to do more on the giving scale. For example, they could inform them about GiveWell, 80,000 hours, GiveDirectly or other proven measures that offer more than just a fleeting, one-off transaction and ‘feelgood’ moment. What are your thoughts?
- Some argue that Millennials are the driving force behind the growth of B1G1 companies and the desire to do good via ‘compassionate consumerism’? Agree/disagree?
- Does the EA movement believe that there is a growing trend for people – especially over the past decade of so – to try and do more ‘good’? After all Peter Singer has been arguing for this for almost five decades. What has triggered this more recent change/interest?
- Could B1G1 brands do more for their chosen causes by motivating their customers to make a more meaningful, long-term contribution/difference to the plight of the world’s poor?
Epistemic status: I am a university student who has read a lot of EA material but has little knowledge about B1G1 programs. I thought carefully about this post for a few hours.
I think there's a wide spectrum of possible effectiveness depending on implementation, but in practice they seem unlikely to be much more effective than the average non-EA charity, and a factor of at least 10 behind many EA causes.
Overall, the strictest forms of B1G1, where a company gives the exact same product they're selling, seems gimmicky to me. The reason is that needs of people in the developing world are vastly different from those of the wealthy people buying the products. I think market forces might even dictate that these programs are not much more effective than direct cash transfers: If they were much more effective, the target population would be willing to buy them, which would cannibalize the sales of the company.  None of the 3 companies you list is so naive-- they mostly outsource their work to charities. But this comes with its own problems: they don't apply their own domain knowledge to their interventions.
Warby Parker works with Pupils Project and VisionSpring. Pupils Project operates in the US, so it's unlikely they are cost-effective. VisionSpring at least works in Bangladesh. According to a [GiveWell interview], they do undercut commercial prices by a factor of 2 by selling glasses at cost for 150 taka ($1.77) , but I doubt that glasses are a leveraged intervention in the developing world. GiveWell does not currently recommend VisionSpring as a top or standout charity, instead recommending charities that can beat cash by a factor of 5-60 and are supported by very strong evidence.
TOMS has stopped distributing shoes in favor of donating 1/3 of their profits to a fund managed by their giving team. Their 2019 impact report is basically a marketing document full of infographics; it appears they make some attempt at evaluating impact of charities, but don't follow effective altruist principles. For example, they fund projects in the US, and clean water programs (The Gates foundation has studied the water, sanitation, and hygiene sector extensively and finds better opportunities in sanitation).
P&G's MNT vaccine program is through UNICEF, which is massively overfunded by comparison to charities recommended by GW and the Open Philanthropy Project.
There are more fundamental problems. The B1G1 website says they primarily evaluate causes by "progress of the project activity" and financial records; it's likely they're falling for the overhead myth and vastly underemphasizing the effectiveness of the cause area, which is left up to the company. EA has at least three branches where effective cause areas are found: global health/poverty, farm/wild animal welfare, and existential risk. It would be ideal if companies' B1G1 programs either supported effective programs in one of these areas, or found a unique niche. B1G1 programs need to yield good PR, and sometimes have the additional constraint of providing a tangible product, so it appears they're limited to a small subset of global health interventions, which in these three examples look no better than the average charity in terms of effectiveness. I don't see any companies with B1G1 programs in farm or wild animal welfare, probably because it is politically contentious. Existential risk causes seem even less likely to yield good PR because they're the exact opposite of the tangible transaction at the heart of B1G1. And B1G1 seems unlikely to let companies find a unique niche given that they're outsourcing to nonprofits.
Finally, I have other concerns. B1G1 companies could be decreasing the amount given to more effective charities, which given that some charities are hundreds or thousands of times more effective than others, might cause net harm. They also might be using such programs to cover up being socially irresponsible (e.g. poor treatment of factory workers, or contributing to high-suffering animal agriculture).
Since this comment is rather long, I've split it into two, with the second comment directly answering the 12 questions.
: See https://www.givewell.org/international/charities/income-raising-goods for why. Other GiveWell charities manage to outperform cash because they don't sell commodities-- individual families can't buy a school deworming program.
: Strangely, they sell glasses for $0.85 each on their website. Perhaps they have high distribution costs.
I just wanted to say I thought this was overall an impressively thorough and thoughtful comment. Thank you for making it!
Sorry for getting back to you so late but WOW. I was mind-blown by your insightful responses. It will be a tremendous help to my preliminary research and simply delightful to have been posted my inquiry here on this forum. Thank you so much tkwa!
Glad I could help. By the way, it came to my attention that GiveWell is investigating the cause area of providing glasses in developing countries: https://www.givewell.org/international/technical/programs/eyeglasses#How_cost-effective_is_the_program
This is promising, but I still endorse the general stance that B1G1-type programs have obstacles to overcome to reach effectiveness.
It looks like you're fairly new to effective altruism, so you might want see my other comment or read the EA Handbook for more of the reasoning behind these answers.
1) I'm not affiliated with the CEA (nor are most of the people on this forum), but there are certainly forms of philanthropy more in line with the principles of effective altruism.
2) Effectiveness is often estimated as importance x neglectedness x tractability. There are good reasons for this, as when correctly formalized it's an estimate of the total good one can do in the world; see below. I think most consumers are better off either buying from socially responsible non-B1G1 companies, or buying from any company and donating the money saved to either GW top charities (which rate much better in importance and neglectedness) or high-impact existential risk, farm animal welfare, or wild animal welfare causes, which can rate even better depending on your value system. https://concepts.effectivealtruism.org/concepts/importance-neglectedness-tractability/
3, 4) The incentives of B1G1 companies seem to push them towards relatively ineffective causes, and they might indirectly be causing net harm.
5) I would be happy if P&G switched from MNT to bednets. It's possible the marketing could be equally good since malaria affects so many children under 5.
6) This is a valid criticism. Since highly effective causes are rare, any restriction makes it hard to find one.
7) Not sure.
8) I don't think this is fair. Neonatal tetanus causes infant mortality, and the MNT vaccine reduces it, even if there are more effective causes to address. In general, addressing institutional/systemic issues can sometimes be more complicated and costly than directly attacking the problem.
9) Given that these companies aren't currently giving to EA causes themselves, it's hard for me to imagine such companies recommending them to consumers.
10) I'm skeptical of claims that millennials cause this or that trend because they're such a broad group. But you could look at data for this one. For example, polls that ask about inclination towards buying B1G1 products, broken down by age range.
11) EA has grown over the last decade, but total donations as a percentage of GDP are more or less flat. If you mean the growth in EA, that's too complex a question for me to answer.
12) Not sure.
I think whether or not B1G1 is effective depends on what you care about. It's clearly not the most effective way to, say, give shoes to people without shoes, since its creating an inefficiency by tying the supply of free shoes to the demand for shoes from wealthy people. And this is to say nothing of whether or not giving shoes to people without shoes is an effective use of money relative to the alternatives.
But, maybe B1G1 is effective in making people more altruistic, and is an effective intervention for creating the conditions under which people will give more effectively. Intuitively I doubt it and expect it fails on this measure because of effects like people feeling their good doing responsibility is discharged by their purchase and so may feel they less owe others more altruism because they already bought $X of "good" goods, thus decreasing their giving on the margin. But I'm not an expert here so I could very well be wrong.
The difficulty is that B1G1 potentially has many effects to consider other than just the direct good done via giving, although that we even need consider those effects is itself evidence in my eyes that it's not effective since we don't, for example, think much about how people giving money to AMF will influence their charitable thoughts since we already feel pretty good about the outcomes of the donations.