Nonprofit Chronicles

Journalism about nonprofit organizations and their impact

Amazon-Smile-LogoAmazonSmile brings to mind the observation of late great media critic A.J. Liebling about The New York Times’ fundraising campaigns on behalf of its Neediest Cases.  “Readers are invited to send in money,” Liebling wrote, “while the newspaper generously agrees to accept the thanks of the beneficiaries.”

AmazonSmile is bit like that. The website, created by Amazon.com in 2013, offers

the same products, prices, and shopping features as Amazon.com. The difference is that when you shop on AmazonSmile, the AmazonSmile Foundation will donate 0.5% of the purchase price of eligible products to the charitable organization of your choice.

Nice, right? Well, yes, but not nearly as a nice as it could be.

Two questions need to be asked about AmazonSmile.

First, what has it done to increase the quantity of charitable giving?

Second, what has it done to increase the quality of charitable giving?

The answer to both: Not much.

Let’s begin with the numbers, starting with that 0.5 percent figure. If you spend $20 at Amazon.com, that’s 10 cents. Spend $2,000 and $10 goes to charity–provided, that is, that you remember to bookmark or navigate over to https://smile.amazon.com before making a purchase. Predictably, most shoppers don’t. It’s hardly worth the bother to surf over to a new URL to give away a dime.

The results reflect that friction: In 2015, the AmazonSmile Foundation, which administers the program, donated $12,867,013 to charity, according to the foundation’s latest Form 990-PF filed with the IRS. That’s less than 0.5 percent of Amazon.com’s retail sales.

How much less? In 2015, Amazon generated about $99.1 billion in U.S. and international retail sales, its annual report says. (See p. 68). If my math is correct, that means that the $12,867,013 in charitable giving amounts to 0.00012 percent of sales. That’s $1.20 in donations for every $10,000 of sales.

Now, you could argue that this is the fault of shoppers (and, admittedly, I’m one of them) who are less than rigorous about finding their way to the AmazonSmile portal every time they make a purchase. Instead, I want to make the case that the low numbers are the product of a deliberate effort by Amazon.com to depress, rather than increase, giving.

After all, it would be a trivial matter for Amazon.com’s software designers to allow shoppers to make a one-time request to have 0.5 percent of their purchases go to charity, and make that the default option every time a customer visits the Amazon.com site.

As one perceptive Amazon shopper wrote on the company website back in 2014:

This is a wonderful program with a big BUT! Here’s the ‘BUT’: Why do shoppers have to go to the smile link in order for donations to kick in? Why can’t the contributions simply be linked to the shopper’s account? I want to support a nonprofit, but i frequently forget to go to smile. Is Amazon trying to get organizations to encourage their members to use Amazon, but secretly hoping they will forget to go to the smile link so Amazon doesn’t really have to make a donation? A truly noble approach would be to make it automatically link to the shopper’s account.

Exactly.

Further evidence of Amazon.com’s intentions come from the the fact that there are no cell phone or tablet apps for AmazonSmile. Users have asked for AmazonSmile apps, which is no surprise, given the growing share of e-commerce purchases made by phone. One survey found that about 40 percent of all e-commerce was conducted on phones or tablets last Thanksgiving, ReCode reported.  It’s not impossible to buy from AmazonSmile over the phone, by using the phone’s browser to reach the website, but it’s clunky so few people bother.

It’s sure looks as if Amazon.com wants to make it hard, not easy, to use AmazonSmile.

To put the $12.9 million donated by the AmazonSmile Foundation in a broader context: The Walmart Foundation made $166 million in donations in 2015. Microsoft, its Seattle neighbor, donated about $500 million last year. Amazon makes other donations as well, but they don’t add up to much and the company won’t release numbers, GeekWire reports.

Laziness, stupidity, indifference or caution?

What about AmazonSmile’s influence over the quality of giving? By that, I mean the potential for AmazonSmile to recommend charities  that do the most good, or at least those that are more transparent than their peers about their performance. As it happens, there’s an easy and useful metric to identify such charities–the Platinum designation awarded by GuideStar, which I blogged about last year. Alternatively, AmazonSmile could boldly turn to trusted evaluators such as The Life You Can Save, a nonprofit that recommends charities, based on evidence, that help the world’s poorest people. The Center for High Impact Philanthropy at the University of Pennsylvania also does a fine job of identifying effective nonprofits.

This wouldn’t limit consumer choice. AmazonSmile permits shoppers to choose from nearly 1 million charities, it says, and it could continue to do so. But, since its early days, AmazonSmile also has nudged shoppers to give to what it calls Spotlight Charities. The company says:

We do this to make it easier for customers to choose an organization to support from the almost one million available, but we do not endorse any particular organization or the causes they support.

The five current Spotlight Charities are the ASPCA, charity: water, Doctors without Borders, The Nature Conservancy and the American Red Cross. A less interesting list is hard to imagine. These choices can be explained only by some blend of laziness, stupidity, indifference or an abundance of caution. Since the people who work at Amazon.com are neither lazy or stupid, we can chalk this up to indifference or caution.

Of AmazonSmile’s five spotlight charities, only one, the American Red Cross, has a Platinum Rating from Guidestar. If you believe Pro Publica (here) or Senator Charles Grassley (here), the Red Cross is a disaster charity in every sense. Giving to The Nature Conservancy, for all of its good work, is like giving to Harvard: It had nearly $6 billion in net assets and brought in $786 million in revenue last year. The ASPCA has never been ranked among the most effective advocates for animals by Animal Charity Evaluators. As for charity: water, it is at core a fundraising platform, and a very good one, but most of the work it funds is carried out by partners, some better than others.

These recommendations have enormous impact. In 2014, which is the latest year for which grantee data is available, Spotlight Charities outpaced the rest by huge margins. AmazonSmile gave $602,495 to St. Jude’s Children’s Research Hospital–more than 10 percent of all the money that passed through the foundation that year. It also gave $436,338 to the Wounded Warrior Project (!), $265,557 to the American Red Cross and $167,316 to The Nature Conservancy. All were Spotlight Charities. The vast majority of charities brought in less than $100 apiece. (I pulled these numbers from AmazonSmile’s 575-page Form 990, and might have overlooked a big recipient or two. The document isn’t searchable.)

Finally, consider the possibility that AmazonSmile could ultimately lead to less, not more, charitable giving. If it leaves shoppers feeling that they have done their part, they may be less likely to respond to a direct appeal from a nonprofit, as Brady Josephson, a fundraising consultant, wrote on Huffington Post back in 2013.

What, then, is AmazonSmile? It’s marketing, dressed up as altruism. Hundreds, perhaps thousands, of charities put the AmazonSmile logo on their websites (here, herehere and countless other places). They’re promoting Amazon.com. It’s revealing that the president of the AmazonSmile Foundation, according to its latest Form 990, is Steven Shure, who is vice president of worldwide marketing at Amazon.com. Shure doesn’t mention the AmazonSmile Foundation on his LinkedIn profile. His only visible nonprofit experience is as a board member of US Rowing.

In the end, though, to understand the purpose of AmazonSmile, all we need to do is the math. Imagine that you spend $1,000 this year on AmazonSmile. Amazon gets $995. Your favorite charity gets $5. Someone’s doing well, and it isn’t the charity.

No wonder Jeff Bezos is smiling.

A note on sourcing: I tried every which way to get Amazon.com’s response to all this. I emailed two people in the company’s communications department, asked a DC-based Amazon exec to refer my request to its PR department and left a message on the AmazonSmile website. I’m aware that the company can’t respond to all media requests. If I do hear from Amazon.com, I will post a response below.

110 thoughts on “Why Amazon Smile doesn’t make me smile

  1. suzanne E worden says:

    Excellent article!

    Like

  2. CONSTANCE says:

    I just googled”Why does AMAZON make it so difficult to give with their Smile program?”….We have multiple users in our family and like to shop on Amazon. Sure you can bookmark the page, but everyone has to always remember to go into it. I find their program is cumbersome and inconvenient. When we enter the Amazon Prime site there is no direct link to smile either which creates more inconvenience. If you place your order in and switch to Smile, your order gets erased. It would make a huge difference if AMAZON would make your giving preferences part of your profile. Then it automatically can be connected to any orders you make. This would help us in our household and the giving would certainly go up!!!!

    Like

    1. paleolithtoo says:

      I find that my shopping cart is saved when I switch sites as long as I’m logged in, which I always am. I posted suggestions on making it easier to stay on Smile — that was a week and a half ago but my post is “awaiting moderation”. Summary: keep a tab open in the browser, and use a search shortcut directed to Smile.

      Like

  3. Kitty says:

    Why not just bookmark the Amazon Smile website? Problem solved.

    Like

  4. Sarah says:

    Thanks for the post informing how stupid, lazy and/or indifferent the average Amazon user is that they can’t manage to type “smile.” before “amazon.com” to help contribute in any small way to a charity they allegedly care about. This is Amazon’s fault for counting on their users’ laziness and stupidity and using it to lessen minimization of profit. I somehow remember to type the extra 6 characters, but I guess I’m just skewing statistics over here.

    Like

  5. Carl says:

    Paul is correct. .013% was Amazon Smile’s donation for 2015. I have to agree with Marc though. .5% of $99.1 billion = $4.955 billion, not $12.9 million. If Amazon were to make it a 1 time request and lets say 5% of sales are linked to Smile that would have resulted in about $2.48 billion for 2015, not just 12.9 million. I just checked today and Smile says that the total donations generated through Feb 2018 were $80.13 million Not much when you consider what it could have been.
    On selecting charities, I like that Amazon allows me to pick a smaller local charity. I believe that people that do not donate regularly would rather donate to local charities if there were an easy way. But having to place a request at Smile first translates to $0 because it’s just not the easy way. Like Marc said, if the purchase is small, say $40.00 why bother for a $.40 donation?

    Like

  6. Nick says:

    Leaving a comment on a blog post from a year ago, but since it’s the first result on Google when looking for an analysis of Amazon Prime, I figure it’s probably worth it to point a couple things out.

    First, in spite of the fact that Amazon could probably do more in their charitable giving, I don’t really see how Smile is bad given what’s been explained here. Something is better than nothing and as long as the amount of money Amazon brags about giving is actually going to the charities (as opposed to keeping a percent of that 0.5% for administrative fees or something like that) then it’s honest charitable giving.

    Second (and this is what really bugged me the most) in the last paragraph you say that for ever $1000 you spend, Amazon keeps $995. This assumption seems to be the driving force behind the negative perception that pervades this post and it’s either hilariously naive or maliciously deceptive. Amazon handles a ridiculous amount of money, but their profits are only a tiny fraction of their revenue. Amazon is notorious for having razor thin profit margins and then turning around and reinvesting the bulk of their earnings back into the company. According to their financial disclosures, their net profit margin for the quarter ending Mar ’18 was 3.19%. So in reality, for every $1000 you spend Amazon keeps $31.90 as profit. All things considered, giving $5 for every $30 you take doesn’t strike me as very stingy.

    Like

  7. Paul says:

    I came here to see how this all works, and whether I want to participate in this program. In your article you say, “If my math is correct, that means that the $12,867,013 in charitable giving amounts to 0.00012 percent of sales.” Well, your math is NOT correct. You are off by a factor of 100! That comes out to 0.01298%. To see a percentage, you have to divide the $12M by the $99B, and them multiply by 100. That’s how percentages work.

    I don’t have a horse in this race. But 12 or 13 million bucks ain’t hay. I’m sure they could do better. But using this increases my charitable contributions without another dime out of my pocket. If all the members of our organization do this, it will add up to something meaningfu.

    Like

  8. Many thanks for the nice post, it was very interesting and informative.

    Like

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