Passive charity initiatives are easy and appealing to consumers. Simply by buying a particular product or visiting a restaurant on a particular night or shopping through a specific web link, they can support the causes they care about, because the companies commit to making contributions in return for their patronage. One of the largest such programs, over the past decade or so, has involved one of the largest retailers, namely, Amazon. Shoppers who made a point of visiting “smile.amazon.com” could select their preferred charity, which would receive .05 percent of the cost of their purchases from Amazon.
For customers, it was an easy way to feel better about their purchases; for the nonprofit beneficiaries, especially small ones, the program often made a notable difference in operating budgets. That is, for tiny charity groups, operating on shoestring budgets, even a few hundred extra dollars each year can make a big difference. And for Amazon, the Smile program seemingly provided benefits in the form of an improved brand reputation and an example the firm could point to when claiming its corporate responsibility bona fides.
But those reputation benefits evidently were insufficient for Amazon to find it worthwhile to continue the program. In announcing the end of AmazonSmile, the company noted that, having signed up more than 1 million nonprofits eligible to receive contributions, the impacts that any individual group received seemed too minor. Instead, it highlighted more substantive contributions it made at the same time, such as to local food banks, disaster relief efforts, and educational programs.
Those larger initiatives certainly feature some impressive numbers. For example, Amazon notes that by donating more than $2 billion to affordable housing initiatives, it has aided in the completion of approximately 14,000 affordable houses. But for small nonprofit organizations, such contributions are largely out of reach, especially if they focus in other domains (e.g., animal rescue, environmental protection). By moving money away from a lot of small groups, and toward fewer and larger actors, Amazon believes it can have a greater positive effect. The small groups might disagree.
For consumers, the switch also seemingly came as an unpleasant surprise. It takes away an ethical justification they might have used to “excuse” their continued patronage of Amazon, even if their ethics tell them they should be shopping small and avoiding the environmental costs of shipping products. Furthermore, the shift takes away their choice of which charity organization to support. Buying cleaning supplies no longer means a contribution to their local school’s art fund, for example.
Finally, some critics have called foul on the move, alleging that rather than shifting its contributions, Amazon is really just trying to keep more profits for itself. Yet the company consistently gives more than 1 percent of its pre-tax profits to charity, a level that often gets used as a threshold to define a good corporate citizen.
Discussion Questions:
- What reasons did Amazon give for ending the AmazonSmile program? What other reasons might it have?
- Should Amazon reconsider its decision? Does it have any effect on your shopping habits?
Sources: Natalie Neysa Alund, “Amazon Discontinues Charity Donation Program that Raised Nearly $500 Million as Layoffs Continue,” USA Today, January 19, 2023; Thalia Beaty and Glenn Gamboa, “AmazonSmile’s End Is Alarming, Say Nonprofits that Benefited,” AP News, January 25, 2023; About Amazon, “Amazon Closing AmazonSmile to Focus its Philanthropic Giving to Programs with Greater Impact,” January 18, 2023, https://www.aboutamazon.com/news/company-news/amazon-closing-amazonsmile-to-focus-its-philanthropic-giving-to-programs-with-greater-impact
Photo from iStock.com/Sundry Photography