18 Jan How Product Philanthropy and Good360 Fits Into the Circular Economy

The explosive growth of the global economy has been underpinned by a linear “take, make, dispose” economic model that churns through endless amounts of raw material and fossil fuels — and produces massive waste.

Fortunately, forward-thinking companies are beginning to realize that this wasteful cycle doesn’t have to be the only model for industrial growth.

Meet the circular economy.

A circular economy emphasizes the use of renewable energies and keeping products in use as long as possible, then recovering and regenerating materials at the end of their (first) life so they can be reused.

To use an example from the automotive industry, a car manufacturer pursuing a circular economy strategy might choose to produce higher-quality tires that last longer, assembled with sustainably sourced rubber in a solar-power factory. Then, when those tires need to be replaced, they’re returned to a facility where they’re broken down and recycled into car bumpers, giving them a highly useful second life.

This entire “closed-loop” process would require fewer resources, give consumers a better product, and generate less waste than tires produced under a traditional linear model.

According to the Ellen MacArthur Foundation, the circular economy is based on three key principles:

• Designing out waste and pollution
• Keeping products and materials in use
• Regenerating natural systems

But a circular economy doesn’t just attempt to reduce the negative impact of finite resource consumption. Rather, the circular economy aims to rejigger the entire industrial economic model to create growth, jobs, and environmental benefits through holistic, sustainable practices.

Of course, we are big believers in the benefits of the circular economy at Good360. We also believe that product philanthropy can and should be an integral part of a company’s circular economy strategy.

By donating products that are cannot otherwise be sold to consumers, businesses prevent these items from going to landfills and, thereby, contribute to the circular economy’s goal of zero waste. Last year alone, we facilitated over 900 semi-truckloads of product donations — the vast of majority of which would have ended up going to landfills.

According to Carrie Snyder, an expert on the circular economy and a consultant to Fortune 500 companies and a variety of other organizations, product philanthropy is “one of the highest uses of the circular economy.”

“Product donations fit in perfectly with the circular economy,” Snyder said. “In fact, it’s one of the best uses for the product because it’s keeping the product as is, rather than breaking it down. Within the stages of a circular economy process, you’re taking out components and reusing them, or refurbishing or recycling a product. All of those processes require extra labor and energy because most of the time, you’re destroying what was originally created. So, when possible, you should be trying to use the product whole. Donations are a perfect way to do that. It’s a great demonstration of the circular economy.”

Another way to look at reducing waste under the circular economy strategy is finding uses for product that would otherwise sit idle in a warehouse or unsold on the shelves. Our model of facilitating the transfer of needed goods from businesses to nonprofit organizations supports this strategy.

Additionally, our emphasis on compliance and mapping donated products with the actual needs of vetted nonprofit organizations ensures that the benefits of this circular economy process are realized.

In a circular economy world, returned products wouldn’t be unwanted, as they are today. Returns would actually become a part of the closed-loop process where they become regenerated into second-life products.

For example, during her 15-year career at Cisco Systems, Snyder was part of a group that transformed what was an $8 million cost center for Cisco into a $100 million profit center, mostly by funneling returned and refurbished equipment for resale to customers.

While it’s easy to talk about the circular economy, it requires a lot of thought and action to actually implement. Companies that truly want to participate in the circular economy need to undergo a major mindshift, not just make small-scale adjustments to their supply chains, Snyder said.

“It’s more than just philanthropy,” she said. “It’s more than just supply chain. It’s a whole lot of different parts collaborating together. You need a lot of cross functional work within companies and with their network of partners, whether it’s upstream or downstream, to figure out how they’re going to make the circular economy flow operate seamlessly.”

Fortunately, Good360’s unique nonprofit model allows us to be an integral part of these collaborative schemes. We can help companies figure out how to fit product donations into their circular economy strategies, while giving nonprofits the tools that they need to improve their communities at the same time.

That’s a good thing because there’s so much more that can be done in terms of developing circular economy systems in the U.S. and abroad.

“We’re just at the beginning of this journey,” Snyder said. “There’s a lot more to be done. There’s a lot of embedded waste in structures and systems that we can eliminate.”