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- Journal of Management for Global Sustainability
- Review of Business
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- Advances in Management & Ethics Research
- Journal of Jesuit Business Education (JJBE)
- Society for Case Research
Direct Selling Industry Defined
The direct selling industry, in fact, is uniquely positioned for CSR success – not only given its ability to mobilize millions of salesforce members, but also because many direct selling companies were founded upon philanthropic principles that have defined their respective cultures. The term “direct selling” refers to a business model in which independent distributors market and sell a company’s products directly to consumers. The channel offers a flexible, low-risk business opportunity along with company support like digital tools, a personal website, third-party advertising and a wealth of personal and professional development resources. Independent sales representatives pride themselves on offering quality products and highly personalized service – an element that their customers have continued to prefer in our Amazon-driven retail environment.
Direct selling companies and their foundations contribute annually to charitable organizations. However, their independent sales force represents a significant percentage of total donations raised through charitable campaigns. The World Federation of Direct Selling Associations (WFDSA), a non-governmental organization representing the direct selling industry worldwide, reported that in 2016, corporate donations comprised 76 percent and representatives’ donations comprised 24 percent of overall charity or cause-related contributions. Thanks to social media, consumers of every generation now have greater awareness of those organizations committed to philanthropic causes. Often, new distributors are often motivated to start a direct selling business because it gives them the opportunity to support a cause they believe in while they earn a meaningful income. In turn, they attract customers for similar reasons.
A Crisis of Trust
The 2018 Edelman Trust Barometer determined that trust in U.S. institutions, including government, business, media and NGOs, suffered the largest recorded drop in the survey’s 17-year history. Further, the survey found that nearly two-thirds of its respondents believed that CEOs should take the lead on policy change rather than wait for the government to take action; and that building trust (69 percent) should be the number-one responsibility of CEOs, surpassing the production of high-quality products and services (68 percent).
The direct selling industry is filled with companies whose very DNA is philanthropy. In its 2017 Global Philanthropy Report of the Direct Selling Industry, WFDSA states that more than four in five direct selling companies (82 percent) have corporate philanthropy activities; and nearly one in four direct selling companies actively engaged in philanthropic activities has had that commitment in place since their founding.
Shaklee Corporation: Inspiring the United Nations Billion Tree Campaign
Shaklee Corporation, a manufacturer and distributor of natural nutrition, weight management, beauty and household products, has a history of environmental responsibility dating back to its inception in 1956.
In 2006, Shaklee Chairman and CEO Roger Barnett named the late Kenyan activist, and 2004 Nobel Prize recipient, Dr. Wangari Maathai, founder of the Green Belt Movement, its Global Ambassador for a companywide campaign to plant one million trees, a formidable challenge for any company. But Shaklee wasn’t your average company. It was a direct selling organization comprised not just of employees, but also an independent contractor sales force of 700,000 strong. If each of those distributors planted just one tree each, the company would be nearly three-quarters of the way to its goal. Barnett knew that those distributors, as ambassadors of the company’s environmental philosophy, would gladly rally behind the cause – and they did. Shaklee planted its one-millionth tree just three years later. “The initiative became the model by which the United Nations launched its own Billion Tree Campaign,” says Shaklee board member and consultant Marjorie Fine.
Encouraged by the overwhelming success of the million trees campaign, Barnett has moved the goal post and announced his intent for Shaklee to be the first corporation to win the Nobel Peace Prize by eliminating child malnutrition. While it remains to be seen if Shaklee will achieve that remarkable goal, the contributions this company and others have made to environmental sustainability – and its ability to garner tremendous support for its mission – are a source of inspiration for organizations seeking to implement CSR initiatives at a time when trust in corporations continues to wane.
Trades of Hope: Creating Compassionate Entrepreneurs through a Sustainable Business Model
Founded in 2010, Trades of Hope is a fair-trade direct selling company created by two mother-daughter teams to empower women all over the world through a sustainable business model. Its 7,000 “Compassionate Entrepreneurs” in the U.S. sell products created by 13,000 female artisans in 16 developing nations, through dignified partnerships. The artisans’ products, ranging from jewelry and bags to home décor and accessories, are handmade from locally-sourced materials. Trades of Hope aims reach millions of women around the world in poverty, sexual exploitation and slums who need a sustainable income to find hope for themselves and their families. To date, the company has helped more than 9,400 women find full-time employment, more than 3,900 find part-time employment, and impacted nearly 43,000 people living in the artisans’ communities. An additional 14,500 are receiving health aid, and more than 16,500 children are receiving education as a result of this sustainable business model.
Gretchen Huijskens and Holly Wehde and their then-teenaged daughters, Elizabeth Huijskens and Chelsie Antos, met through a homeschooling co-op and quickly bonded through their shared interests in entrepreneurship and mission work. The Huijskens had been very involved in philanthropy, having opened an orphanage in Haiti. They knew from their experience in Haiti that well-intentioned efforts can cripple an economy; for example, shoe donations to Haiti following its 2010 earthquake drove local merchants out of business. The key to creating lasting and positive change, then, isn’t coming in and saving the day through short-term assistance. Rather, it’s through sustainable solutions.
The two mother-daughter pairs decided to go on a mission together, and over the course of that trip, an idea was born: What if they could create a sustainable solution to poverty that provided women in the United States with a flexible means of income at the same time? It wasn’t long before the four founders chose direct selling as their business model of choice. “In an age where so much technology was taking off, the direct selling model was bringing women together at home parties and allowing them to find that community,” says Antos. The founders recognized that home parties could provide a setting for women to share artisan stories, educate consumers and mobilize them for the greater good. Trades of Hope was founded to “provide a mom in the U.S. with an opportunity to earn part-time income. She has the opportunity to share products she loves and advocate for women in a developing country. At the same time, through their own sustainable business, artisans are able to feed their babies and send their kids to school for the first time.”
Damsel in Defense: Strength in Numbers
Sometimes the worthiest cause of a direct selling business is the sales representative herself. Mindy Lin, Founder and CEO of Damsel in Defense, created a company that has helped thousands of women find healing and empowerment after an assault. Lin started Damsel in Defense to empower, educate and equip women to protect themselves and their families not just through products and a business opportunity, but also a community of survivors. Independent Damsel Pros sell such products as stun guns, pepper spray, RFID wallets, and emergency auto kits, along with a line of safety education products for children. Like Trades of Hope, the company’s mission is at the forefront of its identity.
“I believe in the power of strength in numbers. If I operate solely through traditional online sales, I am disconnected from the customer and I have to hope that those who are being abused or are vulnerable will come looking for me,” Lin says. At home parties, Damsel Pros are able to educate, equip and empower in a highly personal, yet safe environment.
“One in three women will be abused. Every single one of us knows someone who will at one time or another need to defend themselves, but we need a personal connection to her in order to help her -- boots on the ground. Our nationwide network of independent salespeople, who serve as advocates, is educated on the signs of abuse and the statistics about who is vulnerable to attack. They have the passion to protect along with the personal connections to reach and help the ‘1 in 3s’ within their circles and communities.” Those circles can include friends, neighbors, soccer moms, family members, anyone with whom women interact in their daily lives.
The company’s grassroots mission and sales force mobilization for good provide yet another example of how the direct selling business model remains so relevant today. Self-determination, along with a connection to a purpose larger than oneself, have attracted millions of aspiring entrepreneurs throughout the world to direct selling.
“It's the most beautiful business model I can think of, “ Lin continues. Through education, product sales and the opportunity to earn meaningful income, “I get to reward justice-driven men and women for caring for their neighbors and keeping them safe. Our culture to protect is not unmatched by our culture to give, and I couldn't be prouder of that. The hearts that God has brought to this mission are beyond incredible.”
Being socially responsible is part of the industry’s proud history, and direct sellers everywhere are carrying forward this legacy of giving to make a better world for future generations. The Direct Selling Education Foundation (DSEF) shares these and other stories with students in the United States and worldwide through our academic partnerships. To learn more about the DSEF Fellows program, visit https://dsef.org/dsef-fellows-program/.