Last week’s big news was that AmazonSmile is closing shop after ten years.
What can you say about AmazonSmile? What can you say about a corporate behemoth that undertakes an ill-conceived and manipulative plan to remake its image on the backs of the nonprofit sector; that then spends a decade overpromising, underdelivering, causing serious distractions for the causes it professed to support, and damaging small businesses; and that finally tosses the whole thing in the scrap heap? What can you say?
Well, give me a few minutes.
For those of you unfamiliar with AmazonSmile, this was a scheme marketed as a way for Amazon to share its success with charitable organizations. The notion was this: Amazon customers would designate particular nonprofits to receive a donation equivalent to ½ of 1% of their purchase costs. Then, on a quarterly basis, Amazon would send out a check reflecting the aggregated amount for customers who chose that particular organization.
Amazon pitched AmazonSmile as a cost-free way for charities to earn some extra revenue. The nonprofits allegedly wouldn’t have to do a thing. “Everyone” buys from Amazon, it was implied, so charitable organizations might as well get their cut with no effort. And Amazon flattered its customers by saying they could support good causes through their purchases, and it wouldn’t cost them a thing – so long as they bought at Amazon, of course.
Except that in order to encourage donors to name their organizations as the designated AmazonSmile beneficiary, nonprofits ended up slapping the AmazonSmile logo and link everywhere: on their website, in their email signature blocks, in special cyber-blasts, in newsletters, and on social media.
And that meant giving a lot of nearly-zero-cost advertising to Amazon, a company with a dubious reputation for labor relations and competitive practices, sullying the nonprofits’ own reputations in the process.
And that meant giving Amazon charitable cover for its corporate misdeeds. (Along with convincing countless customers that buying from Amazon somehow made them philanthropists.)
Meanwhile, by shilling for Amazon, nonprofits undermined their local businesses – many of which were donors to these very same nonprofits, and many of which were anchor institutions in their communities.
Finally, this scheme caused nonprofits to “waste an ask” by urging their supporters to name the organization as their designated AmazonSmile beneficiary. (Thoughtful fundraisers are careful not to ask too frequently. But thanks to AmazonSmile, many organizations did just that.)
I ranted about AmazonSmile on this blogsite a bit more than eight years ago, and a version of that post was also published by the Chronicle of Philanthropy. The Chronicle piece probably earned me more readers than anything I’ve ever written, but I did regret the headline the Chronicle editors picked out: “Is It Immoral for Charities to Push Amazon Smile?” The headline writer misinterpreted the gist of my article. My point wasn’t that charities were immoral to push Amazon Smile. The nonprofits weren’t immoral. They were dumb. Nonprofits were selling out to Amazon and receiving pennies back – certainly nothing worthy of the effort they put in.
That New Cool Neighbor!
Ten years ago, when it began, AmazonSmile came across like that charming, charismatic, seemingly wealthy and well-connected new arrival in your neighborhood. We’ve all met people like that in our lives: all sizzle, no substance. At first, everyone loves the guy. He makes lots of promises. He volunteers to drive you to the airport whenever you need a lift. He implies that he could get your kid a job at his company, or introduce you to the governor, or treat you to box seats at Fenway Park. He offers to join the neighborhood clean-up committee and to sponsor the local Little League team. But nothing ever comes of any of his promises. He always disappoints. He’s the guy who volunteers to bring steak to the neighborhood barbeque, but then shows up with nothing in his hands but a bag of generic hot dog buns from the 7-Eleven. And finally one day he disappears, slipping out of town one step ahead of the creditors, and everyone realizes at last that they’ve been suckers all along.
AmazonSmile has left town. Good riddance! But this might be a good time to think about what the AmazonSmile phenomenon says about the interface of corporations, nonprofits, and government.
Why’d It Start? Why’d It End?
As part of this post-mortem, we should ask why Amazon’s honchos created AmazonSmile in the first place, and why they eventually pulled the plug. Notably (spoiler alert!), the real reasons for both actions (as I can figure them out) bear little relationship to the reasons stated in the official Amazon announcements.
Amazon says its motive for creating AmazonSmile was to support worthy nonprofits. But, of course, it wasn’t that at all. Amazon wanted to look like it was supporting the charitable sector. It wanted to paper over its reputation as a rapacious competitor and brutal employer with a charitable shimmer. It also wanted to gain even more market share by looking like a caring corporation. And, to a certain degree, it worked. There were hundreds of thousands of good nonprofits that willingly gave free advertising to Amazon in exchange for a (very) few bucks each year. There were millions of customers who came to think they were doing good by buying through Amazon. From a marketing standpoint, Amazon got a lot out of the arrangement.
But Amazon also received a lot of guff and bad publicity, none of which the company anticipated. That’s because the Amazon execs who divined this scheme thought that all charities were, well, charitable. They figured, in fact, that there was no risk in empowering their customers to choose the charities that were most deserving. But the problem is, there are a lot of bad “charities” out there, and there are a lot of Amazon customers whose taste in nonprofits led AmazonSmile to give funds to some awful people.
We have to recognize that the Internal Revenue Service, underfunded and terrified of Congressional attacks, at this point simply waves new organizations into 501(c)(3)-Land without more than the most cursory of examinations. Moreover, once an organization is deemed a charitable nonprofit, the IRS almost never removes that designation. That means some organizations have charitable status that are actually pushing heinous agendas. If an organization applying for charitable status is in fact a hate group working against immigrants or Muslims or LGBTQ rights, well, whatever! Let ‘em in! If some 501(c)(3) organizations are Three Percenters or local branches of other seditionist groups that stormed the Capitol on January 6, well, so what?! Essentially, the federal government has abdicated the responsibility for regulating the charitable sector.
The Hubris of Amazon Leadership
And into this mess rolled the know-it-all colossus that is Amazon. If any of the Amazon higher-ups has asked those of us who actually work in the nonprofit world what they should think about before launching AmazonSmile, we would have told them straight up that if they agree to make their grants to any and all 501(c)(3) organizations, then they’re bound to support some terrible actors. (This is something that donor-advised funds have been dealing with for years.)
But the Amazon guys, these great disrupters who used technology to remake the world of retail, these masters of the universe, vastly underestimated the complexity and divisiveness of the charitable sector. They decided they’d be “cause neutral” in their support and give to any qualified 501(c)(3), because all charities were good, even if by the standards of a great many people certain nonprofits were doing terrible things. They also missed the rather obvious truth that in today’s hyper-partisan environment, certain charitable causes may be loved by some but are considered the devil’s spawn by others. Planned Parenthood and an anti-choice pregnancy crisis center are both considered charitable organizations. Did Amazon realize that a gift to one would alienate the supporters of the other? Stunningly, apparently not.
And then, when belatedly the AmazonSmile leaders said, “Oops!” and started blocking grants to some of the more heinous organizations, like the openly racist VDare, or groups that worked against LGBTQ equality or that stoked anti-Muslim sentiment, the right-wing media roared in anger about how Amazon is just another woke, socialist, God-hating power destroying the country. (Now, I happen to agree that Amazon has done its share of destroying the country, but that’s not because it’s run by a bunch of leftists.) Conservatives also railed against Amazon for relying on the hate group designations of the Southern Poverty Law Center, which the right wing considers a leftist organization.
This was a no-win quagmire for Amazon. (I’d put in live links for some of these stories, by the way, but frankly, there are too many to choose from. Just Google “Amazon Smile Hate Groups.” You’ll be busy reading all day.)
The Real Reason
Amazon’s stated reasons for ending AmazonSmile were as disingenuous and nonsensical as the reasons given ten years ago for its creation. Amazon claims that they’d come to realize that their giving was spread too thinly over a million charities to have the impact they desired.
Ha! The real reason for shutting down Smile is that Amazon realized that its scheme to charity-wash its corporate sins was more trouble than it’s worth, that they were getting terrible publicity, and that they had had no idea there are so many bat-shit crazy people running alleged charities. The Amazonians came to understand that, customer designation or not, the $20 that went out to a hate group was technically not from Customer Harry or Customer Jane, but from Amazon itself. “Amazon Funds Hate Groups” was not the headline Bezos and pals anticipated or sought. Nor was “Amazon Is a Left-Wing Tool.” Amazon tried to look good through this scheme, but they ended up looking clueless, ham-handed, and, yes, like the funder of evil causes.
So sayonara, AmazonSmile. I won’t miss you – because, as you know, I never liked you. That said, a few of my nonprofit friends have said something to me on the order of, “I know AmazonSmile was a waste of my time and was utterly foolish… but I did like getting those $85 checks.”
To which I say: Now is a great chance to take the time and energy you put into marketing AmazonSmile and turn that into something productive. Go sit down with your donors, build your relationships, and get some big gifts! Go ahead and finally shut down that golf tournament or art auction that’s been eating all your time and driving you crazy! Build up your legacy giving program, so some of your donors’ end-of-life money goes to you and not to some Ivy League university (or undeserving heirs)!
I promise you: nearly anything you do will be a better use of your time than shilling for Amazon. Plus, you’ll sleep better, because after ten years of collaborating with Amazon, you and other good nonprofits will no longer be compromising your values and reputations. And it’s good for your health to stop waiting for that cool neighbor next door to fulfill his promises. It was never, ever going to happen. Now, you can stop pretending that it ever will.
Copyright Alan Cantor 2023. All rights reserved.