THE DEMISE OF AMAZON SMILE

Consumers and Non-Profits aren't Smiling Anymore

WILLIAM SMITH PHILANTHROPY CONTRIBUTOR @willismith_2000

nies are also looking closely at a company’s social responsibility profile. In one study, 73 percent of investors stated that efforts to improve the environment and society are factored into their decision making. There is a clear trend as well that younger investors see corporate responsibility as more of a priority than do their older counterparts.

PY IS ALL THE RAGE. CONSUMERS INCREASINGLY WANT TO KNOW THAT BUYING THAT CUP OF COFFEE OR THAT SET OF SHEETS SOMEHOW BETTERED THE PLANET, ITS PEOPLE AND ITS COMMUNITIES. THAT IS BECAUSE FOR FAR TOO LONG, NO ONE KNEW OR MUCH CARED WHETHER THEIR COFFEE BEANS WERE “FAIR TRADE” OR WHETHER THOSE COTTON SHEETS WERE THE PRODUCT OF ORGANIC AND RESPONSIBLE GROWING PRACTICES AND FABRICATED BY JUSTLY PAID, ADULT WORKERS.

All of this matters. One study found that 76 percent of consumers wouldn’t do business with a company that opposes their own views. And another study found that a majority of American consumers, 55%, believe it is important for companies to proactively take a stand on key social, environmental and political issues.

Beyond consumers, investors in compa-

Finally, companies themselves know it matters. As one example, according to the Harvard Business School, an estimated 90 percent of companies on the S&P 500 index published corporate responsibility reports in 2019, compared to just 20 percent in 2011.

For many consumers, the explicit triggering of philanthropy by buying from a company is also a powerful marketing tool that also betters the planet. I’m reminded, for example, that while Subaru continues to underscore the safety of their vehicles, most of their advertising now heavily focuses on corporate responsibility. Their “Share the Love” program, fueled by each individual sale of a vehicle, has allowed new vehicle owners to direct more than $250 million to national and local charities that address issues like food insecurity and animal welfare. It’s a win-win for everyone.

It’s all the more puzzling then, that mega-retailer Amazon has abruptly decided to shutter their consumer-facing and -engaging corporate philanthropy program known as AmazonSmile. The program directed one half of a percent of the value of a consumer’s purchase to a nonprofit of the consumer’s choice that was also registered into the

AmazonSmile program.

Launched in 2013, AmazonSmile directed nearly $450 million USD to charities worldwide since its inception. That’s no chump change and turning off the spigot is likely to have significant impacts on the small charities that have educated supporters for years to designate their organizations as beneficiaries of purchases made through Amazon.

NPR reported on a few of these small charities where contributions were critical.

There’s the Squirrelwood Equine Sanctuary in New York’s Hudson Valley, a safe haven for more than 40 horses and other farm animals, that tweeted that the nearly $9,400 it has received from Amazon Smile «made a huge difference to us.» Or Court Appointed Special Advocates (CASA) of Central Texas, who also saw the program’s end as detrimental to their fundraising efforts.

Larger charitable organizations have also benefited immensely. St. Jude’s Children’s Research Hospital, for example, has received in excess of $15 million USD from the program.

In its announcement shuttering the program, Amazon claimed, “the program has not grown to create the impact that we had originally hoped” and “with so many eligible organizations—more than 1 million globally—our ability to have an impact was often spread too thin.”

The problem with that rationale is that the impact of the AmazonSmile pro- gram was driven by the customers that utilized it to support charities they chose, not those that Amazon staff itself chose for impact. And no reputable professional engaged in philanthropy – corporate or otherwise – would define a charitable giving program where nearly every charitable organization could join and expect, at the end of the day, that big impact needles were moved. It’s utter nonsense.

Of course, Amazon has the right, as a private business, to determine how their own resources are distributed for charitable purposes. And they have underscored that their charitable work will continue.

But in the meantime, they turned nonprofits large and small and across the globe into engines for customer referrals in return for these small donations that did, indeed, matter to the many nonprofits that received them. It was a brilliant marketing plan for growing Amazon’s business in those early years before they became the behemoth they are today. But it was also a contract of goodwill between Amazon, its customers and the nonprofit sector everywhere. That bond has now been broken.

Amazon insists that the timing of closing down AmazonSmile has nothing to do with the waves of layoffs –some 18,000 positions since this past November – that the company has made across its operations. Call me a cynic, but this is a company where the bottom line is critical in returning value to their shareholders and 0.5 percent of sales is not insignificant in the current economic crunch.

I, myself, have never been a fan of mass retailers like Amazon. I only buy from them when an item can’t be found elsewhere in my immediate vicinity. Or I simply go without it. But the company’s shuttering of AmazonSmile feels like a profound betrayal. Amazon’s business practices have inalterably affected the economic vitality of communities across the globe as smaller retailers could not compete with the convenience and limitless inventory Amazon offers. Goliath has won and now wants his half a percent back, too.

Whether you utilized AmazonSmile as part of your charitable giving or not, recognize that the retailer’s philanthropic footprint has shrunk and the power to direct it has definitively shifted away from its customers, which, sadly, also means away from the smaller mom and pop organizations that might be critical to the communities where you live. Remember those organizations as you contemplate your charitable giving this year. And remember that the economic vibrancy of the communities where we live means that shopping locally should always be the default.