I came across an article in the New York Times recently about a new cosmetics brand called Thrive Causemetics.
Started by a young woman, Thrive is giving some heavyweight brands in this heavily-contested category a run for their money. What’s their differentiator? Well, they’re not only vegan and cruelty-free but they donate heavily to causes they care about, hence the Causemetics part.
It’s a big part of why they’ve quickly become wildly popular among millennials (Thrive has 830,000 Instagram followers, as opposed to just over 150,000 for L’Oreal USA).
Buckets of dough
We’re not talking about pennies either, but serious buckets of dough. The owner — 34-year-old Karissa Bodnar — says her goal is to donate $1 billion. OK, so far she’s only managed a mere $125 million, but still, give her time — she’s only 34! The causes they favour are listed on their website and include things like cancer, homelessness & poverty, under-resourced youth, veterans, education and other things you really can’t find fault with.
The question is, why aren’t other companies doing this? There are very few with such a worthy brand profile; possibly only Patagonia springs to mind. Patagonia is iconic in this space because they’ve done it longer than anyone and are now essentially on a single-minded mission not to make money but to fight climate change.
People before profits
Founder, owner and all-round environmental guru, Yvon Chouinard, made headlines not long ago after he donated the whole company to the cause. This means the entities he set up — the Patagonia Purpose Trust and The Holdfast Collective — now control the company. The Holdfast Collective is a non-profit organization dedicated to fighting the environmental crisis.
Sounds very hippie-like and a bit crazy but Patagonia is one of the most premium brands in the multi-billion dollar outdoor lifestyle industry. And they’ve been working with this mindset since their founding in 1972. This latest move is just a manifestation of Chouinard’s original vision: “To have a for-profit business that works for the planet.”
1% for the planet
Since 1985, Patagonia, Inc., has committed 1% of its total sales to environmental groups (estimates place their donations to date at $85 million) and they’ve been active on climate change for decades.
Hasn’t hurt their sales model any either… Patagonia as a global brand is estimated to be worth $3 billion with annual sales of over $1 billion.
The bottom line is doing good for others as part of your business model is never a bad move for your brand. It just doesn’t have a downside (charitable donations are also tax deductible). So why don’t more companies do it?
I stand to be corrected but as far as I’m aware no South African businesses follow this model. I’m not talking about CSI programmes, which many of them DO have (or claim they do). I’m talking about donating a percentage of every sale they make.
Clearly, the idea of giving money away for nothing is anathema to many business people. But they need to understand that customers LOVE the idea that the money they spend with a brand is also doing good in the community.
End to buyer’s guilt
When you buy from a company with a strong philanthropic attitude, it helps alleviate the ‘buyer’s guilt’ we all suffer from and fills you with warm fuzzies. It’s also a superb way for brands to differentiate themselves. Of course, the product has to be good too — you can’t have one without the other. It doesn’t matter how big your heart is, if your product or service isn’t great, you’re not going to make it as a business.
But if you DO have a good product and you start just giving away a percentage of those handsome profits to worthy causes, you’ll immediately stand out in the marketplace. You’ll be heralded for it EVERY time your business is mentioned. You can spends millions on PR and never achieve that kind of impact.
Isn’t that reason enough to go for it?
You can read more about Thrive Causemetics’ business model here: https://thrivecausemetics.com/pages/how-we-give
