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.

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

  1. Linda Vaughn says:

    Any contribution to any charity is some thing they didn’t have before. I was disappointed that the amount was so small but then if you multiply that by thousands of smile consumers=that adds up.

    Like

  2. Coleman says:

    Again – Amazon has far more generous affiliate relationships with various charitable organizations – you just need to ask the orgs for the right information and then make sure you are using those links instead of Smile to credit them appropriately. My kids’ school gets about 6% back through this type of program. At the same time, I can go to Smile and get 1/12th as much (0.5%) going to the school. Smart organizations will look to set up these affiliate relationships instead of using Smile – which basically sucks and offers little incentive. (Wow – you spent $1000 and sent $5 to a charity. Great job!) Amazon pays affiliates more because it’s a proven system driving value to their bottom line. Nobody gets stuff for free, to make these things work, you have to promote amazon and the links you get.

    Like

  3. David L. Fenner says:

    i must remind the author that Amazon does not even need to do what they are doing, they are not required to set aside any percentage of the sale for charity. And, by the way, in your example, you say that if you spend a thousand dollars, the Amazon gets $995.00 and the charity gets $5.00. i don’t think so, – you forgot about expenses; after merhcandising, paying for product, labor and overhead, like any business, Amazon’s profit is more like the 1 or 2 % that major stores get, – example your favorite grocery chain.
    Me thinks you protest too much.

    Like

  4. Mary King says:

    Leaving the math behind, my first thought when I read just the title of the article was that folks might be deceived into thinking they’d donated to a certain charity like Samaritan’s Purse or CRU and let it go at that. Beware of the Author of deception.

    Like

  5. Artsy says:

    On my phone i was able to create a shortcut icon that functions like the app when i click on it. Was able to create the shortcut by using the option of adding smiles homepage to my phone homescreen.

    Like

  6. suzanne E worden says:

    Excellent article!

    Like

    1. alan says:

      I know you need eyeballs on your page, but you make no worthwhile points. As a consumer, it is easy to go to smile – and how you could possible suggest that all that money isnt worthwhile is a joke. Its charity so anything anyone does can simply be categorized as a nice gesture.

      Like

  7. 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

  8. Michael says:

    I just don’t understand why they don’t just donate that amount from all the profits from purchases. Why do we have to go to smile? Just nip that 0.5% from all sales for charity? Seems simple. Doing it in the way they are doing it seems more about marketing than giving to charity. I wonder how much in comparison they spend to get the same level of marketing? Of course, it gives this money to charity which is a good thing, but it smells of marketing hidden behind kind gestures, like how to increase marketing whilst making people think you are just being kind.

    Like

  9. paleolithtoo says:

    No real disagreement, but there are simple ways to make sure your Amazon purchases are Smiled. First, I always leave at least (!) one Amazon window open, and once it’s on Smile, it stays there — Amazon does not steer you back to non-Smile. Second, I use a search shortcut. I think all browsers have this feature; I’m doing it in Firefox. I have “z” defined to be search Amazon. I did this long before Smile, and when Smile came out, I just modified the URL in the search definition to search Smile. For example, a little while ago I typed “z sanding belts” in the address bar, and if I bought any sanding belts, they were Smiled. The only time I have to switch is when someone sends me an Amazon link — which of course is seldom a Smile link.

    Like

  10. Kitty says:

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

    Like

    1. Kity Mazzarella says:

      I just signed up and tried to bookmark Smile–Amazon makes it impossible. It takes you everywhere but Smile. I’m really disappointed with Amazon. Make an offer (that makes Amazon look good) but make it really difficult to actually take advantage of the offer. I’m really surprised they would behave like this. I guess they can brag about how many Prime members signed up for Smile (but not say anything about how many have actually been allowed to use it.)

      Like

  11. 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

  12. 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

    1. Bob says:

      0.5% of $99.1 billion =/= $4.955 billion. It’s 495.5 million. You’re off by a factor of ten.

      Like

  13. Elaine Z Larsen says:

    I have not read the comments so forgive me if I’m repeating something. It’s not difficult to remember to go to Smile, and if you do – well, how hard is it to revert to the site, really? I have set up special links on my phone and laptop so if I do misremember it’s not difficult to go over to the Smile site at which point I actually “smile” because I took the time to make a little bit of a difference.

    I do like the idea of having the choice to Smile or not be a preference choice.

    And despite whether or not it’s a marketing ploy – and Amazon is not the only one, mind you – it’s up to people to make up their own minds, do their own research.

    Ultimately what’s important here is that a not-at-all paltry sum went to people’s choices of charities.
    That’s a good thing.

    Like

  14. 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

  15. 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

    1. Coleman says:

      Actually it will never add up to anything meaningful at 0.5% -which is the point for Amazon. It’s like granting half of a “mile” for every dollar you spend. Or, a credit card that gives 0.5% cash back. People would never sign up for these things. But most important, it’s disingenuous not because Amazon is not giving enough (they don’t have to give anything) but because this program makes some people direct their spending to the company thinking they are making an impact when they are not.

      Like

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

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: