Our “why” gives our lives a sense of purpose and direction. A why can change, become unclear, or remain in sharp focus. The latter is true for Davis Smith, the founder, and CEO of Cotopaxi, a Salt Lake City-based activewear and outdoor gear company with a fuzzy llama mascot and the slogan ‘Gear for Good.’
Smith’s why is to do good, and this mission has propelled Cotopaxi’s business model since 2014. Every sale of a backpack, jacket, water bottle, or product that is sold gives back to a humanitarian cause. For example, every Cusco backpack that is purchased helps educate a child in Peru for one week. Smith’s desire to do good on a global scale began as a child.
He spent his formative years growing up in Latin America, where empathy was born and informed his response to the world. He met children his age who were malnourished and begging for food. Ecuador’s Cotopaxi National Park was his childhood playground, inspiring a sense of adventure. One of his explorations both defined and directed his why.
After graduating from Brigham Young University, he moved to Cusco, Peru, for an unpaid internship with his wife. In Cusco, he met a 9-year-old boy named Edgar, who begged to shine Smith’s tennis shoes. Smith, taken by the little boy, let him shine his shoes. However, as Smith was preparing to fly back home, he found Edgar in the street crying helplessly, someone stole his shoe-shining kit. Smith gave Edgar all of the money in his pockets. The next day Smith found Edgar selling a bag of candy to kids on the street. Edgar’s plight and perseverance marked Smith. He never stopped thinking about him, even in the thick of earning an MBA at the Wharton School, and a MA in International Studies at the University of Pennsylvania. After completing his studies, he started two business ventures, the first ended, and the second was a disappointment. However, he felt called to try again, this time merging his entrepreneurial drive with social impact.
Edgar never escaped his memory. Fourteen years later, equipped with only the young boy’s photo, Smith journeyed to Cusco to find him. After showing the photo to groups of people, one of Edgar’s friends came forward and provided Smith with his number. Smith called him and discovered that Edgar remembered him, but Edgar still faced the same set of challenges he did when they first met. Edgar’s parents both died or abandoned him and his two younger siblings, and he lived in a makeshift home made of mud. Smith decided that Cotopaxi would ensure children like Edgar didn’t have to live under these harsh conditions.
Six years later, Cotopaxi is the first company to incorporate from inception as a Benefit Corporation and raise venture capital. They’ve committed 1% of their annual sales to address global poverty and currently earmark about 4% of annual revenues for impact efforts in the company’s supply chain. While most brands made charity work a sideline project, it’s the core of Cotopaxi’s work.
Last year, Cotopaxi launched a philanthropic arm, the Cotopaxi Foundation, that formalized partnerships and programs supported by the company’s revenue contributions. They’ve awarded 42 grants in six focus countries. Their initiatives range from a letter-writing bridge employment program for refugees to the Fundacion Escuela Nueva, to ensure that Columbia children and their parents have access to quality education.
Even during this uncertain time, Smith’s why remains the same. COVID-19 interrupted 50% of their business in March, but they are continuing their philanthropic work. Smith shifted his thinking from one ruled by fear to one unleashed by the potential to give abundantly. Smith crowdsourced ideas from his entire team about how to strategically navigate this crisis. Over the last five months, they’ve developed cost-cutting and revenue-generating tactics and raised a reported $400,000 to support communities in need on a local and global scale. Forbes called Smith one of the best adaptors to COVID-19.
Cotopaxi is never paralyzed by challenges. Their response is to create, to give, and to turn trial into triumph. The company started #OneUtah on social media–their definitive response to the crisis–and along with other businesses, intends to raise $5 million to support Utah nonprofits. Their giving doesn’t end there. In the wake of the Black Lives Matter movement resurgence, they’re providing a direct grant to the NAACP through the Cotopaxi Foundation and have committed funding for additional grant programs aimed at combating racial injustice.
“We’re always thinking about what we can do to positively impact our community and help,” Davis told Deseret News, later adding, “We wanted to be part of that effort … and we have something many of them don’t have, a way to connect with our community and great physical products.”
Smith’s financial leadership has a global impact. He recounts receiving a note from Edgar on Facebook. He was in trouble and was unable to make ends meet for his family due to COVID-19. He was in a tour guide training program in Peru, but the pandemic halted training, and he lost his income. This weighed heavily on Smith’s heart. He contacted Edgar, and he empowered him with multiple streams of income. While terrible things happen daily, empathizing and acknowledging circumstances wasn’t enough for Smith. His why is global social responsibility, not just in theory but in practice.