Amazon’s unexpected decision has closed the AmazonSmile donation program has left thousands of nonprofit beneficiaries frustrated and anxious about finding ways to replace funding.
The e-commerce giant launched AmazonSmile in 2013, donating 0.5% of every purchase made by participating customers to a charity of their choice. As of 2022, the company said it has donated $449 million to various charities.
Before ending the program next month, Amazon said it will make a final donation to each of the more than one million nonprofits that have used AmazonSmile, equivalent to 25% of what the charity received from the program in 2022.
Some of the e-commerce giant’s competitors, including Walmart and Target, have their own community donation programs that bear some resemblance to AmazonSmile.
But nonprofits say they feel left out.
Tenisha Taylor says she felt Amazon insulted the work of her Chicago nonprofit, saying its program didn’t have enough impact on the charity’s beneficiaries.
“You didn’t talk to me,” said Taylor, who founded the Ezekiel Taylor Foundation, which provides scholarships to young black men in Chicago whose lives have been affected by gun violence. “You haven’t seen my resulting impact on these brilliant young men that I play with on campuses across the country.”
Taylor pointed out the big difference between the wealth of Amazon founder Jeff Bezos and the small amounts that nonprofits use to try to make their communities healthier and safer.
“We’re making this company (Amazon) rich — we’re getting rich,” Taylor said, referring to communities of color like hers. “At least they can be good corporate citizens to pay it forward in the communities that support them.”
Amazon’s decision to end the program was part of a strategic shift to support initiatives that work on a larger scale, such as a $2 billion investment in affordable housing, said Patrick Malone, a company spokesman. After 10 years, he said, it’s time to review the program. He said the move is not a criticism of the nonprofits he supports.
The company also recently announced it would lay off 18,000 employees and lay off others less profitable parts of their business.
Taylor and other nonprofit founders say they’re angry Amazon didn’t warn them sooner about ending the program. Many nonprofits promoted AmazonSmile in their fundraising appeals because the program provided them with a passive income stream from Amazon customers.
Lauren Wagner, executive director of the Long Island Arts Alliance, based in Patchogue, N.Y., said she encouraged the nonprofits she supports to sign up for AmazonSmile. Now she’s concerned that her organization doesn’t know the identities of those customers, and wants Amazon to request permission to share that information with nonprofits.
Malone said Amazon has notified customers that the program is ending and has no plans to share customer information with nonprofits.
Wagner said she has contacted Amazon numerous times over the years to suggest improvements to the program. Among her proposals were allowing users to make donations without specifically visiting smile.amazon.com and providing the option to make donations with purchases in the Amazon app, which the company eventually allowed.
“They certainly never listened to any of the emails that were sent and they never interviewed us,” she said. “They never got our input on how to make it more impactful.”
Former Amazon employee Adam Goldstein said he also questioned how interested the company was in improving the program. Goldstein said that during his three years at Amazon, he helped nonprofits solicit donations, which he said was personally rewarding. But he didn’t get the impression that the company cared much about giving back to the community.
“I just got the feeling that it was all about Amazon’s profits and the charitable donations were marketing fodder,” Goldstein said.
Goldstein, who later became a grant writer and now works at a Seattle jobs initiative, said a senior marketing manager told him the program was designed to encourage customers to buy directly from Amazon rather than click on Google. product search. This freed Amazon from having to pay Google’s commission.
Malone said that was not true. He said AmazonSmile was launched to allow customers to direct donations to a charity of their choice, which he described as a win-win.
Kari Niedfeldt-Thomas, managing director of Chief Executives for Corporate Purpose, a business coalition that advises companies on social responsibility issues, said she was not surprised by Amazon’s decision to eliminate the program.
“Many companies start their corporate community investment programs with what we would call the ‘confetti approach’ — they give to everyone and everyone is very happy,” Niedfeldt-Thomas said. “Then, over time, we’re seeing companies shift their strategic pillars to what we would call a more ‘focused approach.’ »
In its letter to customers, Amazon said it would “continue to invest in other areas where we see we can make a difference — from building affordable housing to providing access to computer science education for underserved students.”
Niedfeldt-Thomas said her coalition considers companies that donate more than 1% of their pre-tax profits to be “good corporate citizens”. According to Amazon’s 2021 financials, it will donate much more than that. Malone said the company wants to focus its philanthropic work around its strengths — for example, by mobilizing large numbers of responses during disasters or distributing food aid.
The business coalition’s 2021 survey shows that corporate giving is down slightly from 2020, when companies accelerated contributions to fight the COVID-19 pandemic, Niedfeldt-Thomas said. She noted that the current economic climate with inflation and recession could also cause a further downturn.
​​​​​​While some corporations are “leveling off” in their giving, Niedfeldt-Thomas said her coalition found that 58% of companies surveyed increased their overall investment in the community between 2019 and 2021, and 35% of companies increased their budgets by more than 25%.
Last year, Walmart launched a community giving program called Spark Good to complement existing philanthropic efforts run by store managers. The new Spark Good program, like AmazonSmile, allows customers to choose a nonprofit they want to support when they shop online at Walmart and allows them to buy items from the nonprofit registry.
Unlike AmazonSmile, Spark Good does not donate a percentage of the customer’s sale. Rather, it allows them to round their payment to the nearest dollar.
Julie Herkey, Walmart’s vice president of philanthropy, said Spark Good was developed with nonprofits in mind and allows them to engage with customers in ways that feel relevant to their organization.
“We started with the idea that we could help customers solve the problems they were concerned about,” she said. “We could make their everyday shopping experience where they can pay whoever they want, and that, collectively, would make a big difference.”
Wagner and Taylor said they hope Amazon will reinstate the program. The small donations they received from customers, they said, were always helpful.
While working at Amazon, Goldstein said he often saw how valuable even the smallest donations were to nonprofits.
“When Amazon says we actually wanted the wrong exposure, I think the big question is: What exposure did you want?” he said. “I’m hearing that the impact on Amazon’s bottom line is not what they wanted.”