Does the philanthropic startup – companies that look to address issues like global poverty—need to be reinvented? Despite waves of feel-good publicity, critics have taken issue with the “one-for-one” model of global charitable entrepreneurship—an approach perhaps most closely associated with Toms shoes. If you buy one pair of Toms shoes, says the company, then another pair will be donated to someone in need. One for one, say the critics, doesn’t actually solve any social problems. In fact, it can make them worse.
Businesses like Toms, wrote Cheryl Davenport at Fast Company, aren’t designed to build the economies of developing countries, but simply “to make western consumers feel good.’” Harsh? Yes. Unfair? Quite possibly. But the critics have a point.
However, some entrepreneurs are using one for one as a more comprehensive and enduring way to develop human capital. And as it turns out, one of the most important new for-profit philanthropic startups—Giveback Homes—draws its business DNA straight from Toms itself. Giveback’s CEO and founder Blake Andrews spent three years at Toms with Blake Mycoskie, its founder (and “Chief Shoe Giver”).
On a trip to Nicaragua, handing footwear to a little girl, Andrews was struck with a simple vision: “If someone buys a home,” as he puts it, “we help someone get a home.” Giveback Homes was born.
Obviously, Andrews admits, “a pair of shoes is a lot cheaper than a home.” But although that means initially much higher volume for a business model like Toms, Giveback Homes has gone from an idea to a prestigious multinational operation in just over a year—while creating a groundwork for the kind of sustained social development that critics have worried about.
Partnering with Habitat for Humanity at all its locations, Giveback has enlisted its members—real estate agents and brokers who donate a percentage of sales commissions—in homebuilding projects across North and Central America. More than 260 members in 12 states have extended its U.S. build locations from Los Angeles and San Francisco to Denver, Phoenix, and New York City, for a domestic total of 13 cities. Abroad, it has built 21 fully-funded homes for Nicaraguan families, with two more ready in February, and is planning to add sites this year in the Dominican Republican and the Philippines.
On one of Giveback’s Nicaraguan builds last year, I watched Andrews’ crew in action. (Disclosure: Giveback covered the cost of my participation.) Under punishing heat and amid flash downpours, crew members worked side by side with the beneficiary family and its friends (a Habit for Humanity norm) to construct stout houses in a town where many homes lacked front doors and fourth walls.
As Andrews sees it, Giveback elevates the one-for-one idea into more than a string of one-offs. For the residents of San Cayetano, a remote village in the west of Nicaragua, “these homes that we’re building” will be “in their families for generations.” With their possessions and children secure, “they’re allowed to leave and go to work.” After Giveback Homes packs up for the States, he believes a new logic of cumulative, incremental philanthropy will stay behind.
Rather than an abstract sense that “the possibilities are endless”, Giveback lays the foundations for a clear sequence of tangible, productive, and dramatic developments. “Do I think other companies will come out that will find another problem that they can fix?” Andrews asked. “Yes.” From the basics of a home to safety, schooling, and the all social improvements a home unlocks, Andrews says something bigger than the sum of its parts emerges when you start adding them all together. Importantly, the same effect is mirrored on the entrepreneurial side. Different companies offer overlapping solutions that bring bigger returns than they could achieve working in isolation.
Of course, there are challenges. Winning over the realtor community was the initial one. At first, Andrews said, “everybody we talked to said the realtor or brokerage already gives back.” Only on second thought did many prospective members realize that their giving changed “every month,” with the fate of their money ultimately unknown. Often, Internet charities funnel modest percentages of gifts to their intended recipients. “So why not do something,” Andrews asked realtors and brokers, “where you can actually grow your business, differentiate yourself from the other 2 million realtors, turn your client into a humanitarian, and actually have tangible results, where you get to see the family you’re actually helping?”
It’s an effective sales pitch. Although the Internet has begun to change the way Americans buy a home, sites like Zillow and Redfin mostly reshape the process by making agents and brokers less relevant. Surprisingly, little has been done to match buyers with agents in the way that Americans enjoy in pursuits as divergent as finding a date and choosing a short-term rental. By letting agents differentiate themselves in a way that appeals to a specific kind of buyer, Giveback is showing the industry how to move away from printed mailers and bench ads—and toward the personalized online marketplace.
On the San Cayetano build, we took a bumpy van ride to introduce one realtor to the family his donations had given a home — at their new address. As they met for the first time, the mutual joy was palpable. “Having a safe haven to call ‘home’ is a universal need,” says Rebecca Brooks, a member at Climb Real Estate. “I love it that I can contribute to a cause that makes it happen for families in other countries.” Cindy Ambuehl, of Partners Trust, says she loves “being able to share the Giveback Homes story with all of my clients, and turn them into humanitarians too.”
As Andrews scales up this year, he’s keen to keep Giveback Homes focused enough to keep its unique character front and center. The goal is to ramp up to 50,000 or 60,000 members—less than 3 percent of America’s two million realtors—by partnering with influential brokerages and growing recognition among homebuyers. For Andrews, staying relatively small can leverage a close-knit community of members to produce transformational change across international borders. To help select for those who give out of choice, not obligation, members are free to customize the size and frequency of their contributions, so long as they donate at least once a year.
“We don’t just give a product that gets old. We change the way our members feel about the way they do business,” he says. “We change the way clients feel about their realtor. We change the lives of families forever when we give them a home. And we push 100 percent of what’s given to go where it’s supposed to.”
It’s the kind of model that won’t just appease critics, but scale far beyond the literal and figurative foundations of Andrews’ homes.