The Social Impact of AND 1

“I also have one big regret: When I left school, I knew little about the world’s worst inequities. It took me decades to learn.” Bill Gates, 2017

“If your dreams don’t scare you, they’re not big enough.” – Ellen Johnson Sirleaf

I make no claims that AND 1 ‘created’ anything of value, but I do want to offer some reflections.

ESTIMATED AND 1 – CUMULATIVE AMOUNTS FROM 1993-2005
GROSS SALES $950,700,000
COGS $570,420,000
S,G & A $313,731,000
PRE-TAX INCOME $66,549,000
CHARITABLE DONATIONS $3,327,450
TAXES $12,264,981
   
NET EARNINGS $54,284,019

It is a very hard thing to gauge the value of a single person or company. Did AND 1 grow the economy in any real way? I don’t know. If we hadn’t existed, it is possible that all of these sales would have simply gone to some combination of our competitors. Having said that, let’s assume that all of this was ‘economic value’ we created. Let’s unpack these a little.

The biggest item is clearly the revenues. We ‘meant something’ to enough basketball players that they paid us a total of nearly $1 Billion US to be part of this movement. Depending on where you sit, the core set of values we sold may have been positive and may have been negative – but we meant something to a lot of young adults.

We also paid out roughly $570 Million to contractors. Most of these were overseas, and mostly in Asia. The largest amount of this was paid to material suppliers spread all over the world – for example, we were buying leather from South America and China, and plastics from all over Asia. We were also employing more than 5,000 contractors in factories in Asia – many of whom were young women from rural towns working to earn enough to return home and get married. People criticize US factories working in foreign sweat shops, but we attempted to follow best practices, including not using known carcinogens (even when they were legal) within our factories. We impacted countless lives and small business owners with our purchasing choices and habits, and this is likely one of the greatest cumulative impacts we had.

We paid out another several hundred million dollars to people in the form of wages. These were, primarily, people who were a direct part of the AND 1 family. And AND 1 was a family. We created a workplace where people were valued, and where we tried to help them grow. We created a workplace with paid paternity leave, and paid continuing education and world-class health and dental care – and more than that, a community that supported each other in good and bad times.

We invested roughly one hundred million dollars ‘speaking’ in public with our AND 1 personality and voice. The work of Albert Bandura and many other social psychologists points to the likely very powerful impacts of media and, by extension corporate speech to shape public behavior even at the level of societies.   It would require an entire book, and many experiments, to fully measure the impact of this public speech. There are parts of it that likely promoted self-expression, creativity and pride and belonging that were likely very good. There are parts of it that also likely promoted ‘me-first’, ego, self above team and insult driven values of lifting myself by putting others down. These were likely damaging. I don’t know the net-net.

We paid between fifty and seventy five million dollars in local, state and federal taxes, and donated somewhere between $2 and $4 Million to charities, mostly to inner city related education funds. Seth and Jay were both committed to this from founding, and it grew on me. But Jay drove these efforts. We funded some great organizations, like the KIPP schools and City year – and we also gave generously to children orphaned after Taiwan’s earthquake and to 9/11 causes in the US.

Let’s examine where these ‘tax dollars’ went more closely to look at some ‘second order impacts.’

FEDERAL TAXES  
ESTIMATED FEDERAL CORP TAXES $12,264,981
FEDERAL TAXES ON PERSONAL WAGES (14%) $28,000,000
TOTAL FED TAXES (EMPLOYEES + CORP) $40,264,981
   
FEDERAL USES OF AND 1 TAXES:
Health Insurance Subsidies (Medicare, Medicaid, Marketplace, etc) $10,066,245
Social Security $9,663,595
Defense $6,442,397
Safety Net Programs $4,026,498
Benefits to Government workers $3,221,198
Interest on Debt $2,415,899
Education $1,207,949
Research $805,300
Transportation Infrastructure $805,300
   
STATE TAXES PAID – JUST ON WAGES
PERSONAL WAGES PAID $200,000,000
STATE TAX RATES (3-5%) $8,000,000
USES:  
EDUCATION (38% K-20) $3,040,000
HEALTHCARE (17%) $1,360,000

The impacts of our ‘giving’ through taxes dwarfed the impacts we made through charitable giving. There were also ‘ripple effects’ to all payments. For example, we sold goods to retailers, who used the profits from selling our goods to hire workers, etc.

However, the largest impacts of AND 1 were not financial or economic. We created a family environment and a ‘tribe’ for hundreds of people working at AND 1, and for the millions we touched through our marketing and products. This sense of belonging and community in which to grow (for better and worse), was by far the biggest impact of AND 1.

Finally, AND 1 gave many of the founders the ability to choose what to work on with the rest of their lives. Seth went on to coach basketball and impact dozens, if not hundreds of children and families.

Jay and Bart went on to co-found B-corps – a network of thousands of businesses working to do more for their communities and the world at large and not just maximize profits.  Chrissy, our COO after Bart (and his better half) is now running to be a Congresswoman – and she will be great at it.

And, I was able to raise my children and invest countless hours with them, and to mentor dozens of entrepreneurs for free, and to coach girls’ softball and to write screenplays. It’s impossible to measure the impact any life has, but I am grateful for these experiences.

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