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Globalization and the growth in emerging markets have driven significant changes in nearly every industry around the globe. This no different in philanthropy where the “old” standard of donations being led by wealthy Westerners is being turned upside down. Explosive growth has led to tremendous wealth creation in many developing countries and veteran donors are urging the new rich to donate to important causes. Philanthropy has also been repackaged into a businesses where consumers help donate products to needy causes.
The Giving Pledge is an initiative spear headed by Bill Gates and Warren Buffet and is an attempt to convince the wealthiest individuals in the world to donate a majority of their wealth to charity. Although originally focused on the United States, the new wealth in the world is being created in emerging markets. The pair have made trips to India and China and have experienced first-hand the difficulties they will be facing in pushing their giving plan. China has a critical structure issue in that there are many government organizations that non-profits must work with in order to receive a donation. This has caused numerous scandals and a general mistrust of charitable giving among entrepreneurs - mistrust that is shared in many developing countries. Furthermore, there is little tax incentive to donate and many countries have a culture that promotes private giving that is not highly publicized. Although privacy seems to highlight the giving instead of the publicity, many say that donations in these countries are low because they lack a popular role-model that promotes charitable giving – something that developed nations do not lack.
Charitable businesses are erasing the status quo that businesses are designed to make money and charities to give it away. Entrepreneurs are combining these separate organizations to create business plans – called “one-for-one” – that gives away a product to a needy cause every time a product is sold. These companies sell their products internationally and work with charities all around the globe. TOMS Shoes was one of the first of such companies and popularized the business idea. TOMS Shoes operates an online shoe shop and for every pair sold, they donate a pair to emerging countries on nearly every continent. Founder of TOMS Shoes, Blake Mycoskie has personally made “shoe drops” in Argentina, Ethiopia and South Africa and the company has donated over 1 million pairs since starting in 2006. The popularity and success of TOMS Shoes has spawned similar businesses including MoralEyes, WeWOOD and Edun.
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