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3 Things You Don’t Know About TOMS

In an age of soaring corporate profits and bloated CEO salaries it may seem like fantasy for a company to put charity before profit. In this Breakout profile, we meet TOMS. On the surface they look like just another trendy footwear company, but for every pair of shoes TOMS sells, a pair gets donated to a kid in need. Last month, after less than seven years in business, they donated their ten millionth pair.

The company’s founder and “chief shoe giver” Blake Mycoskie started the company after vacationing in Argentina in 2006. He competed in there with his sister as a part of CBS’ “The Amazing Race” in 2002, but it was when Mycoskie returned that he met a group of aid workers collecting used shoes and handing them out to children who had none.

I saw the absolute joy that these kids got and their families got and the gratitude from a simple pair of shoes,” Mycoskie explains in the attached video, “and that’s when I really wanted to do more to help.”

He started small. Mycoskie brought back 250 pairs of shoes from that first trip. They were modeled after a traditional Argentinian shoe called an "alpargata." The plan was to sell them on the boardwalk near his Venice, California home, go back to Argentina with the profits, and make shoes to donate to the kids he saw on his trip.

“I said if we sell a pair of shoes today, we can give away a pair tomorrow and we’ll call them 'tomorrow's shoes,'” Mycoskie explains, “but tomorrow is too long for the little tag, [we] shortened it to TOMS, and of course people have called me Tom ever since.”

Business has exploded since those first 250 pairs of shoes and here are three things you may not know about this philanthropic company, even if you're wearing a pair as you read this.

1. TOMS has no advertising budget

Success came by word of mouth and profiles in publications like the L.A. Times and Vogue. The company has succeeded without outside investors and has never had to buy an ad. “It allows us to stay focused on our mission,” says Mycoskie, “and also allows us to have a long-term vision. That’s a very rare situation in business.”

2. TOMS donations are the highest quality products

TOMS doesn't produce a low quality shoe that's meant to be donated. In fact, it's the opposite. The shoes that are given away are often higher quality than what's for sale on store shelves.

“We have a winter boot now that we make for kids who get frostbite and we have an athletic shoe that we’re giving to kids in America that they can play on the blacktop and do some sports,” says Mycoskie.

3. TOMS donates new shoes when kids grow out of their old pair

“Our giving is all about repeat giving,” Mycoskie says. “So we’re not just dropping them off once, we’re building relationships with these communities so not only do the kids gain these shoes as they grow out of them or wear out of them, but they’re also building self esteem because they know those shoes are coming and someone cares about them in that way.”

What started in Argentina has now spread to more than 60 countries around the world. And Mycoskie says it's not just about shoe donation; he's trying to have a positive impact on local economies as well.

“One of the things we’re working on doing over the next couple of years is creating more jobs in the countries where we give shoes," he says. "My goal is by the end of 2015 that a third of our giveaway shoes will be made in-country.”

Another goal for the future is to give away the secrets of TOMS charitable "one for one" business model to other companies.

“I really outline kind of how Toms has done it, how other organizations have done something similar. It might not always be one-for-one but how they incorporate giving into their business, or if they’re a charity, how they’ve used business practices to make their charity more robust and powerful.”

And he's seeking to make TOMS' pace of donation more robust, setting his sights on donating another ten million pairs of shoes in less than two years. Not bad for the 36-year-old businessman from Texas.

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About Breakout Profiles

Breakout Profiles offers an in-depth look at some of America's most successful companies as well as start-ups hoping to be the next big thing. We'll take you inside the front office, talking directly to the company's CEO. These hard-hitting interviews focus on what you need to know as a potential investor and on just how, in these tough times, business leaders have found a way to succeed.


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