Dead Aid & The Fine Line Corporate Social Responsibility Treads On
It’s undeniable that the phrase “corporate social responsibility (CSR)” has become a buzzword in the 21st century, popping up in mission statements for large multi-national corporations and small mom-and-pop shops alike. Whether it’s to build up a brand, develop a connection with a consumer, or to foster a better workplace environment, it’s pretty much unanimous that CSR, as a movement to help reduce inequities for marginalized communities, is a beneficial step forward. However, as companies push CSR, it is increasingly common to see irreparable mistakes being made in their development and implementation. And it’s becoming such a large issue that we’ve given it a name – dead aid.
Dambisa Moyo, a Zambian international economist, coined the term in her breakthrough novel, which investigated the paradox of why trillions of dollars of development aid have not equated to trillions of dollars worth of growth in African countries. In fact, Moyo claims that this outpouring of aid has actually left African communities worse off – hence the dead in dead aid. Why? Because of a “dependency mindset” in which aid-receiving countries are not growing economically since they rely too heavily on monetary aid. These countries stop investing in their own local economies and use monetary donations as a band-aid solution to larger economic issues, causing market distortions and corruption to run unchecked . While much of her novel details these effects of monetary aid given by large organizations; her ideas have important implications in the realm of CSR and how companies perpetuate dead aid.
Take TOMS for example: their CSR model – one shoe bought equals one shoe donated – was touted as a model for all companies to follow, and many millennials bought into the idea that the pair of shoes they were buying would directly benefit the malnourished boy pictured on the TOMS fliers. However, after economic research on the impact of one-for-one models was published, TOMS’ model was put under heavy scrutiny by NGOs and the public alike. Their model fell into the dead aid trap since it caused many beneficiary communities to form a dependency on TOMS’ shoes, collapsing local shoe-making industries due to their inability to compete with free shoes. Studies even showed that kids who received TOMS’ donations were 13% more likely to agree that “others [foreign aid] should provide for the needs of [their families],” proving development of a dependency mindset . In addition, seeing the “helpless” African children on TOMS’ CSR campaign developed a savior-complex in consumers, helping many feel moral about buying shoes, while leaving them no more educated about issues facing global communities. Ultimately, TOMS’ CSR model was proven ineffective because the company did not properly research the needs of the communities they were helping nor did they develop a solution to sustainably empower them.
By no means is TOMS the only company that has fallen into this trap, but it does serve as a case-study for corporations pursuing a CSR agenda to think critically about how they are using their money. Many of the issues that TOMS’ had could have easily been avoided if they had pursued their CSR through the appropriate framework of:
- Conducting a proper needs-assessment into the target communities.
- Designing a program for allocation of their resources with community involvement.
- Monitoring impact with proper strategies to identify progress towards CSR goals.
- Marketing a responsible and educational social agenda to the public.
At the end of the day, CSR is not something that should be taken lightly or tacked onto the end of a meeting, but rather should be an aspect of corporations that receives the adequate resources, energy, and dedication. Pursuing CSR should no longer be a way for companies to brand for a new-generation of socially conscious consumers, but rather be a community-driven program that effectively reduces the inequities across today’s global society.