Selling to the haves, giving to the have-nots

Blake Mycoskie with recipients of TOMs shoes

TEXT OF STORY

Kai Ryssdal: Much as consumers like to spend, companies do too. On boring stuff like capital investments and debt servicing.

And on stuff they like to crow about. Things like charitable spending. Companies don't often make charity the centerpiece of their business plans. But this weekend a Southern California shoe company will be holding house parties across the country. Where for every pair of shoes a customer buys, the company will give a pair away.

From the Marketplace Entrepreneurship Desk, Brett Brune reports.

Brett Brune Two years ago, Blake Mycoskie traveled to Argentina to learn how to play polo.

After long days on the fields there, he saw players slipping on what they call "alpargatas." They're basic shoes with canvas tops and rope soles. Cheap, but not cheap enough, Mycoskie discovered.

Blake Mycoskie: The last week of my trip, I actually was doing volunteer work in Los Piletones. And I saw lots of children who did not have shoes. And I saw the negative health effects of that — they had blisters and there were cuts and they were swollen.

When Mycoskie returned to Venice, California, he couldn't shake the image of the shoeless kids. He developed his own line of alpargata, with rubber soles. He calls them "shoes for TOMorrow," or TOMS, and sells them for about 40 bucks.

For every pair he sells, he gives another to an impoverished child.

Mycoskie: If I started a charity, I'd have to go raise money every time I wanted to give them shoes. But if I started a business and made a shoe where the consumer liked it for what it was, then the consumer will be my natural provider of the shoes every year.

Mycoskie sold more than 8,000 pairs the first year. He expects to sell 80,000 this year and 175,000 pairs in 2008.

Courtney Rotolo buys shoes for American Rag, a boutique in Los Angeles. She says TOMS is the only shoe she buys that involves charity.

Courtney Rotolo: It appealed to me before I even knew there was a cause behind it, just because it's an easy sell in Southern California.

Thanks to stores like American Rag, TOMS gave away more than 8,000 pairs in Argentina last year. This fall, Mycoskie and 50 volunteers will put TOMS on the feet of 50,000 kids in South Africa.

Mycoskie [on video]: When you have TOMS-itis, every time you see a child, you want to give them a pair of shoes.

Filmmaker Kenneth Kokin documented the first shoe giveaway. His film, "Capitalist Revolution," shows Argentine kids playing soccer in their new shoes. They use fallen trees for goal posts and wrapped-up garbage bags for a ball.

Kokin says Mycoskie hasn't spent a dime on advertising.

Kenneth Kokin: You know, I told people I made a documentary for TOMS and they're like, "Oh, I have a pair of those." I'm like, whoa, you got a pair? "Oh yeah, it was in Vogue and I bought it online."

TOMS may be a charitable enterprise, but it's no not-for-profit. Mycoskie knows he has to stay focused on the basics if he wants the charity to survive.

Mycoskie: Getting better at making shoes, shipping on time. All the thing that make it a business.

There'll be time for play, too. At the parties this weekend, TOMS will hand out white canvas shoes and paint to decorate them with. Mycoskie could walk away with a few original designs — for free, of course.

In Los Angeles, I'm Brett Brune for Marketplace.

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