“I always had in my mind that consumer spending could be an even more powerful force for change than … [+]
The power of collective movements became apparent to Cullen Schwarz as a college student, when he joined several progressive campus organizations, including one that called for an end to apparel-producing sweatshops.
“It wasn’t called ethical and sustainable fashion back then,” he says. “We would get our universities to establish codes of conduct in their apparel contracts, so any major companies that were bidding to make the university’s licensed apparel would have to be able to demonstrate that they were paying at least a decent wage and with no unsafe or forced labor.”
In addition to influencing a policy change, Schwarz saw a larger power at work: “That’s when I realized that consumer spending was a really underutilized tool that could create significant social change . I thought, even back then, if you could galvanize a large number of individual consumers to use their purchasing power to get businesses to pay better wages or produce more sustainably, we could collectively have a really huge impact.”
He carried those lessons with him as he launched a career in politics and policy advocacy in Washington, D.C., but eventually he realized the opportunity for change on a greater, systemic scale.
“I always had in my mind that consumer spending could be an even more powerful force for change than anything we were doing in D.C.,” he says. “Even as I’m working in politics and fighting for income equality and to combat climate change, it was hard for me to know whether I was giving my money to people who are fighting against me as I was making purchases. I just always had this idea that there should be a way to make it really easy for people to know whether the money they were spending was supporting their values.”
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That idea eventually grew into his current business, DoneGood: a Certified B Corporation “Best for the World” awardee that carries the slogan “the Amazon of Social Good.” The website, DoneGood.com, connects customers with companies that offer products that are good for communities, workers and the environment by providing safe working conditions and living wages and following production processes that keep the Earth healthy. DoneGood has seen steady growth since its launch in 2015 as it provides a platform for these companies and meets growing consumer demand for brands that operate with the well-being of the environment and employees in mind. On the DoneGood website, shoppers can find a wide range of goods — from apparel and home goods, to food and drinks, jewelry, personal care items, and more.
Schwarz and I spoke recently as part of my research on purpose-driven businesses when he shared more with me about his hopes for the future of DoneGood and the enormous potential of conscious consumerism to create lasting and meaningful change. Highlights from our conversation follow.
Chris Marquis: Since launching DoneGood, how has the business grown? How do you screen and select the companies on the platform?
Cullen Schwarz, co-founder and CEO of DoneGood
Cullen Schwarz: The company has grown in size and sales, and therefore the positive impact our community has on the world has grown too. Our mission is to help people make purchases that do good for people and the planet, so the more the business grows, the more of an impact we our customers make.
Another real way DoneGood has grown is with all the changes we’ve made. When we started, we were a Yelp-style app for local brick-and-mortar stores in Boston. There were a number of problems with that model. Even though we had 1,200 businesses in the greater Boston area on the app, once you put on just a few search filters in, the universe of businesses gets really small. Like if you want to go to an upscale Italian restaurant, we might have one of those on the app, but it’s way out in the south suburbs while you live in the north side of the city. The behavior change we were asking of people was to travel extra miles, and that can be a big ask, especially if they don’t have extra time. So we said online shopping is the direction we need to go. Instead of asking people to walk for more miles, we’re asking people to move their mouse a few inches.
We even looked at the impact of online shopping versus shopping local and a lot of times, online can be better for the planet. The carbon emissions of shipping to your house are often actually lower than shopping local. A lot of the items you buy in a local store are still shipped from around the world through a global supply chain, so they can have equivalent carbon emission as something shipped to your house. But if you also drive your car to the local store to get the item, you actually create a larger carbon footprint overall than if you had the item shipped to your home. So we felt like, at least on the whole, the environmental footprint was a wash. And now we offset the carbon emissions for every order made through DoneGood, so ordering through DoneGood is even more sustainable. We also considered other impacts of ordering online versus buying local. Ultimately, I would rather buy from a shop that is in another town if that business is investing in that community and paying living wages and fighting climate change and operating with eco-friendly practices, rather than shop at a store in my own town paying minimum wage and using styrofoam. I want to support the best businesses that are making the world better, rather than supporting a business paying poverty wages and killing the planet just because it exists in the town I happen to live in.
Now that we’re focused on online shopping, we can work with several hundred businesses across the country, and we can make sure that all of them truly are the kind of businesses that we feel great about supporting. We’re looking for businesses that are doing good for people and the planet. For us doing good for people means paying living wages, providing safe working conditions, no child labor or trafficked labor. Doing good for the planet means being highly more eco-friendly than the big-name counterpart in your industry.
To select brands, we aggregate data from independent third-party certifying organizations, then do our own research, then we actually have interviews with people at the company. We ask them to follow up to demonstrate that their claims are accurate, and we have them sign an affidavit that everything they’re saying is accurate.
The journey of so many people who first get into this space is “OK, we need to create objective standards, maybe we should give businesses an overall “goodness point score.” And of course that’s good in theory. It turns out it’s just really hard to create an objective standard and numerical system for “goodness.” It’s like trying to score a person on how moral they are. B Lab has done a great job with their scoring. But we ultimately deciding point scores weren’t for us.
When we started, we said we never want to make any subjective value judgments, we are only going to look at data from independent third-party certifying organizations like B Lab and Rainforest Alliance and Forest Stewardship Council and various Fair Trade certifications and similar programs. But we realized there are so many great businesses out there who are not certified, for a variety of reasons. We would find a business producing in a little town in Colorado, paying $20 an hour plus health care and running their production with all renewable energy. But they’re not certified, so we can’t let them be on DoneGood? We knew we’d have to start doing our own research and making our own decisions.
We also realized that it can be confusing for consumers to get a lot of numbers thrown at them—this business gets an 8.8 overall, this other business an 8.6, but the first one has an 8.4 on workers and 9.2 on environment, but the second one has an 8.5 on workers and an 8.7 on environment… which business do I like better? It’s too many numbers. And what do the numbers really mean?
Our mantra now is “stories not data.” We tell our customers the story of what these companies are doing, and then they can decide. With too many data points, your head starts to swim and you wonder what does this all mean. And say you have a bigger clothing company that powers their production facility with 100% clean energy and uses organic cotton and non-toxic dies, and a little company that’s a few people in a garage making dog collars out of upcycled cowboy boots—who gets a better environmental score? On the one hand, the bigger company is helping to show other companies that it’s possible to produce at a larger scale in really innovative, highly sustainable ways. On the other, the folks making dog collars are removing waste from the waste stream and probably have a lower carbon footprint overall. How would you score each of them? So now we just tell you that this clothing company is running purely on renewable energy and describe their other sustainable practices, and that the other company is making dog collars out of upcycled cowboy boots, and you can make your choice about which companies you want to buy from.
Marquis: Speaking of consumers, how do you convey to them what it means when they’re buying from these “good” businesses? Related to that, are you seeing growing consumer interest in buying from sustainable and good companies?
Schwarz: Conscious consumerism is exploding. We’re on the leading edge of a consumer revolution in America, and even more so in some other countries around the world. The market for sustainable goods is now $114 billion in the U.S. alone, and 50% of the growth in consumer product goods (CPG) in recent years has been driven by sustainable consumer goods.
Nielsen puts out a report every year that shows that consumer focus on sustainability continues to increase, especially among millennials and Gen Z. They said this is the beginning of a fundamental shift in consumer spending, and brands that fail to recognize it will be left behind. And they don’t mean eco-friendly brands or organic brands, they are talking about Coke and Nike and everybody. Sustainability and other moral issues are starting to be as important in a consumer’s decision as traditional factors like price and product specs. You see the explosion of social enterprises in the past decade. The explosion is also evidenced by the fact that we have words like social enterprise, impact investing, ethical & sustainable fashion, words we didn’t even have when I started thinking about this 20 years ago.
You also see it in Morgan Stanley marketing a sustainably index mutual fund. You see it in BlackRock’s announcement a couple of years ago that they’re not going to invest in companies that can’t articulate some kind of a social mission. You saw it when Nike stood up for Colin Kaepernick—their marketing team knew that was a move for which their core customer base would reward them. You see it when all these companies speak out for Black Lives Matter or turn their logos to rainbow during pride month. You see it when Major League Baseball moves the All-Star Game from Georgia to Denver because of Georgia’s voter-suppression legislation. You see it in the rise of impact investing as more and more people realize where they invest, where they choose to work, and where they spend their money makes a huge impact on the world.
Speaking out is increasingly important. In the past, some have said to me, “Hey be careful, if you speak out on issues considered political too much, you’ll alienate 40% of the people.” But those people are not shopping on DoneGood in the first place because they don’t believe climate change is real and they vote no on minimum wage increases, so why are they shopping on a site focused on ecofriendly products made by workers with living wages? What is better – if we get 100 new customers and offend no one, or we get 1000 new customers and offend 10,000 people? Especially as a startup trying to grow, I’ll take the latter every time. Especially when you consider the 1000 customers you got are going to be more passionate and love you more and tell their friends about you more, while the 10,000 people you offended were never really going to shop with you in the first place. When I started, I didn’t plan on having us be political whatsoever, I thought I was leaving that part of my life behind. I mean, I’m sure we would always speak out on certain major issues because it’s just the right thing to do. But now we speak out even more than I’d first expected because our customer base is just so behind us. Taking a stand is better for business too. We don’t have to make a choice, there’s no choice to be made between doing the right thing and what’s in your business interest. Because consumers increasingly reward companies who stand up for what’s right.
Companies know that consumers are paying attention to their practices and the stances they take or don’t take, to the impact they have on the world and the things they stand for more than ever and that’s only going to increase. It’s almost like there used to be a brick wall between our actions in the economy and a moral decision. In the economy, we would say things like “Well, that’s just business” to justify total selfishness. You work where they pay the most, you buy what’s the cheapest, and as a business leader you do whatever is most profitable for that quarter, and that’s it.
Now people increasingly understand that our actions in the business world have probably even more impact than do our non-economic decisions. Where we choose to work is where we’re going to spend the majority of our waking hours on Earth. More and more of us want to know that we are using our time on Earth in a way that has some purpose, some meaning. Companies then recognize that they have to be a business that has some more purpose behind it other than maximizing profit so they can attract top talent.
In the same way, we’re all understanding that who we give our money to is the biggest impact we have on the planet. When we give our money to someone, we help them do more of whatever it is they’re doing. So we give our money to a business that is empowering people and helping them lift themselves out of poverty and fighting climate change, we get more people out of poverty and a stronger fight against climate change. It’s a supply and demand economy, so the market will supply whatever we demand. In a market economy, consumers have total power. More and more people are starting to demand not just a good product at a reasonable price but they’re also demanding that companies give a damn and act a little bit moral in the world.
I wrote a paper back in school for one of my philosophy classes about the new Utopian ideal. In the 21st century, the new Utopian ideal is a market that provides a living wage for everyone and protects the environment. Getting to that place where every business operates in a way that’s good for people and the planet will be a multi-decade or possibly multi-century campaign. However, every time we choose to use our money to support businesses that are doing good for people on the planet, we take a step closer to that world.
Americans gave $450 billion to charity last year, but we spent over 300 times more than that buying stuff. So if even a tiny fraction of that huge amount of consumer spending can help alleviate global poverty, address climate change and do other things to make the world better the impact is huge.
And I think that impact will likely be bigger than most or all of the things that are going to come out of D.C. in the next few years. Elections are important, and everyone should vote. Public policy matters. All the work that NGOs are doing is incredibly important. But if those of us who care about social and environmental justice aren’t trying to unlock this huge mountain of resources that is consumer spending, then we’re really ignoring a an incredibly powerful force that can create massive change.
Marquis: How is your business run in a way that distinguishes it from other online retailers?
Schwarz: Not only are we a Certified B Corporation, we’re also legally incorporated as a public benefit corporation. In addition, one of our investors paid for me to go to conscious capitalism boot camp. I’m both kind of a hippie and also skeptical of corporate buzzwords, so I went in with a mindset of “We’ll see what this is all about.” It was actually a really formative experience in the development of DoneGood.
All of our partners are screened for social and environmental impact, and all our workers are earning a living wage. Our governance incorporates things like transparency and an equitable pay structure. I actually make less than I used to in my old career. I’ve always been at least tied for last among the lowest-paid full-time DoneGood employees, so we’ve always had a negative or equal CEO-to-lowest-paid worker ratio.
There are also the more intangibles of conscious capitalism that are more about how you feel, how your team feels, and really ensuring that you are always set up to truly make your customers and your suppliers and the lives of anyone your business comes in contact with better. It’s about asking questions like: Is your product truly a gift to the world? Or constantly asking ourselves whether we are always creating value for our partner businesses that sell products on our site. That has determined how we’ve set up our business model. We don’t take any money from our partner brands upfront, we only take a percentage of products sold. That means are partners are always making money, they’re never paying us more than they earn, and we’re always helping them be more successful. And of course that’s the goal behind everything we do. So our business model was designed to make sure that the money we earn is always dependent on how much value we’re creating for our partners, in other words, how much we’re accomplishing our social mission.
We’ve also worked really hard to develop technology that makes it super quick and easy for our partner brands to work with us. They take 15 minutes, they hook up to DoneGood once, and then orders that come through us automatically go into their existing fulfillment process. The payment to them is handled automatically, so they spend 15 minutes of time and pay us zero dollars upfront, and then they just get more money because of the sales that we make for them on our website. They always win.
I truly believe that keeping in mind those thoughts about your product being a gift to the world and truly creating value for every other business or organization that you come in contact with helps your business be more successful. And helps you feel better as a human about your work. The national Conscious Capitalism organization has studied this for I think around two decades now, and they’ve found that large companies adhering to conscious capitalism principals performed 14 times better than the S&P 500.
