No one expects a financial institution to be a charity. That being said, credit unions do so because that’s part of what makes the cooperative difference. Cooperatives are living proof that it’s possible to thrive not despite but because making a difference in member’s lives is the cause and the effect.
TOMS Shoes founder Blake Mycoskie, of Amazing Race fame, decided to take this idea a step further when he took a vacation in 2006. While traveling through Buenos Aires, he happened upon a community of children running around the semi-paved area barefoot. This prompted further research and revealed that children in Argentina routinely went without shoes. They were either too expensive, or they wore out so quickly, that most parents couldn’t justify the expense. While even Mycoskie admits that this wasn’t exactly news to anyone, actually visualizing this poverty changed him, and he decided to take a personal stake in the matter.
When he returned home to Santa Monica, he had found the cause that would eventually drive the model for his business. He decided to found a company with one goal: give people a chance to give back through consumption. For every pair of somewhat overpriced shoes sold, a second pair would automatically be donated to children in impoverished areas all over the world – colloquially referred to as the “one for one” program, and now a household name. All profits would be reinvested in future philanthropic endeavors or used to fund other companies with similar missions.
Unlike the philanthropic tech titans of the aughts, he didn’t wait to turn a profit to begin helping people. He didn’t pledge to donate 5% of total income. He didn’t ask his customers for donations, and he didn’t fund decadent charity galas. Instead he made giving back the goal from the get go – not just to consumers, but to people in need in no way connected to his company. As a result, a multi-million dollar business was founded. In addition to providing millions of pairs of shoes, and now eyewear to children in Southeast Asia, South America and Central America, Mycoskie also found a way to give more to consumers than perishable goods – the opportunity to give without thinking of it as a separate act.
While the TOMS model might seem novel to some, it shouldn’t sound new to anyone with cooperative experience. One of the founding principles of the credit union industry is “Concern for Community.” Credit unions launch programs to serve members every day. They also consistently run charity events and other community programs that enhance members’ lives as well as members of the community at large. (Looking for specifics? Take a spin in the CreditUnions.com Press Center to read more about what your peers are doing. )
Since TOMS was founded in 2006, the company has inspired several other businesses to launch with the same model. While they haven’t all found the perfect synergy between cause, product and consumer, the fact remains that they are committed to keep working towards it. As cooperative institutions in the midst of a resurgence representing over $1 trillion in assets, credit unions are well placed to show these businesses how it’s done. As the trend towards focusing more on the community line than the property line continues, banks aren’t positioned to lead the way. (While they have a long history of giving to charity, the founding principles behind donation have been different.)
After over a century of introducing members to the cooperative model, credit unions are better placed than any to guide business with similar missions. Whether it’s through SBA Loans, community outreach programs or simple in-branch advertisements, credit unions have a unique opportunity to take a place outside the cooperative sphere and guide these businesses as they find their footing.