Woman buys washing powder

CHOICE research has found that many social enterprise products aren't more expensive than mainstream products, but some companies are cashing in on the 'halo effect' of social enterprises to boost sales while donating very little profit to charity. 

CHOICE looked at four brands that all donate some profit to good causes: Who Gives A Crap, Thankyou, Cotton On Foundation and Community Co. While they're very different, they all produce and sell fast-moving consumer goods and can be found across the country.

Do bigger donations mean greater impact? Not necessarily. The value each social enterprise delivers is difficult to quantify. A social enterprise that donates 50% of its profits can be just as impactful as one that donates 100%. It all comes down to the change they make with the money they give.

It can be difficult to find out exactly what social enterprises do with the money from sales. If they aren't nonprofits or owned by charities, they don't have to release financial reports – so you pretty much have to take them at their word.

CHOICE warns to watch out for 'social wash'. Similar to greenwashing, it's when businesses falsely brand themselves as social enterprises or cash in on marketing themselves as genuine change makers. The only way to avoid it is to do your homework.

Read full article from CHOICE

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