As the holidays approach, many of us are asking ourselves how to give gifts that balance pleasure with purpose. But how do we use our consumer dollars most effectively to create the change we desire in the world?
The confluence of pleasure and purpose has worked to great effect raising impact capital through cause-based marketing. Over the last 10 years, a handful of consumer brands have built cause-based marketing campaigns into their core retail models. Toms, by leveraging their buy-one give-one model, has put shoes on over 2 million children. Patagonia founded 1% for the Planet, a charity that asks businesses to contribute 1 percent of their total revenue to support a broad range of environmental causes. But are these models ultimately able to create and then sustain impact on the scale of the underlying problems?
It’s important to distinguish between cause-based marketing and social enterprise. While each can make meaningful contributions to improving the lives of others, the difference is this: where a cause-based marketing campaign will only make donations, a social enterprise will cultivate and apply its full breadth of technical and market expertise towards solving social problems. The social enterprise model forces companies into an existential search for life-enhancing solutions that end users both want and will pay for, thereby aligning the financial success of the company with the achievement of its social objectives.
At BioLite, we’re pioneering a model that pairs the long-term potential of social enterprise with near-term scaling capital provided by cause marketing.
Across the world, 3 billion people still cook on smoky open wood fires, leading to nearly 2 million premature deaths each year. That’s twice as many people as die from malaria. It’s hard to envision enough philanthropic resources to sustainably address a problem of this scale. If Toms gave a clean stove for each pair of shoes they sold, they would still have addressed less than 0.1 percent of the need. This observation drives us to the conclusion that only a market-based solution will have the ability to achieve impact on the scale of the underlying problem.
To address the problem of indoor smoke, our team at BioLite created the HomeStove, a low-cost, wood-burning stove. By generating electricity from the heat of the fire, the HomeStove is able to power a fan that reduces smoke by 90 percent while providing users with economically valuable electricity to charge mobile phones and LED lights. We believe that the combination of consumer desired electricity access with the health benefits of reduced emissions has the potential to revolutionize the purchase and adoption of clean cookstoves.
While our stoves will dramatically reduce the impact of indoor wood fires, we also recognize that large-scale development problems are difficult to solve and require considerable time, expertise, and capital investment. To address this, we follow a model of parallel innovation. We take the same technology developed for emerging markets and redesign it for the United States and European recreation and emergency preparedness markets as the BioLite CampStove.
This parallel approach has two distinct benefits. First, by incubating a single technology for multiple markets, we ensure that all of our research and development investments and capabilities directly contribute to our impact potential. By contrast, only a fraction of Patagonia’s financial resource and technical capability is applied to improving the environmental concerns that are central to the brand’s identity. Second, BioLite leverages the near-term revenue from well-developed markets to incubate our emerging markets to self-sustained scale.
As consumers, we ultimately make our selection on the merit of the product we’re buying. But as you consider the impact potential of your purchases, you can either support a company that gives away a share of its profits to good causes, or invest in a company that brings to bear all of its resources to create scalable social change.
Images (cc) BioLite