As it continues to grapple with financial uncertainty, Toms Shoes today released a report outlining the effects of its giving strategy.
Toms has donated more than 95 million pairs of shoes to date, the brand revealed. Shoes have been donated to people across 38 states and 82 countries. According to the report, the gifting produces positive educational outcomes and improves self-confidence for students, leading as well to a 60% decrease in foot-related infection and injury.
In 2020, Toms expects to reach a major milestone: 100 million pairs of shoes donated.
Toms began in 2006 with a simple premise: For every pair of shoes sold, a pair would be given to someone in need. It expanded that model to include eyewear in 2011, with 780,000 sight restorations achieved so far. Safe water donations began in 2014, following the founding of Toms Roasting Co.; five years later, 722,000 weeks of safe water (over 100 million liters) have been provided free of charge.
While Toms is the one-for-one model’s pioneer, it moved beyond this in 2018. The company now supports a variety of social causes — a decision the company came to amid a push to reboot, following a period of financial difficulties.
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“We have a formula, but it only works if it’s fresh, provocative, radical and somewhat newsworthy — that’s what drives people to join,” Toms founder Blake Mycoskie explained in a March FN cover story.
The shift comes at a critical time for the business, which has been dogged by bankruptcy rumors and negative credit ratings. Meanwhile, the clock is ticking on a $307 million loan — amortization brings it down a little each year — that’s set to be repaid in October 2020. Amid these difficulties, there is talk that private equity owner Bain Capital, which purchased a 50% stake in the company in 2014 at a $600 million valuation, could sell the brand.
“That’s a very big moment for us financially,” Mycoskie said. “We need to prove this business model, get growth going and get the debt renewed.”
Since 2018, Toms has been gifting Impact Grants, with $6.5 million so far allocated to nonprofits focused on physical safety, mental health and equal access to opportunities. In the United States, the brand has made a push toward stricter gun laws, including the founding of the End Gun Violence Together initiative.
Young people are probably most passionate about this issue, but it affects everyone,” Mycoskie told FN in March. “We’re connecting with consumers who never would have cared otherwise.”
Rather than give a pair of shoes for each pair purchased, Toms is now donating one third or more of its annual net profits, in the form of shoes and grants.
“Truth be told, we haven’t quite figured everything out yet, but we do know that directing our shoe giving and grants towards the promotion of physical safety, mental health and equality of opportunity is the right next step for Toms,” Amy Smith, Toms chief giving officer, wrote in the company’s impact report.
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