The end of Amazon’s charity donation program will be another blow to small nonprofits that are already struggling to make ends meet in an uncertain economy, nonprofit leaders told MarketWatch.
is scrapping AmazonSmile, the program that lets Amazon customers direct donations to nonprofits while shopping on the online retail giant. Customers who sign up for the program can send donations of .05% of the purchase price of eligible purchases to nonprofits of their choosing. Amazon foots the bill for the donations; there is no extra cost to customers.
Launched in 2013, AmazonSmile had donated $400 million in the U.S. and $449 million worldwide as of this past December, an AmazonSmile spokesman said.
“However, after almost a decade, the program has not grown to create the impact that we had originally hoped,” the company said in announcing that AmazonSmile will end in February. “With so many eligible organizations — more than 1 million globally — our ability to have an impact was often spread too thin.”
The average amount donated to a U.S. charity in 2022 through AmazonSmile was less than $230, the spokesman said.
But that amount isn’t insignificant, others say. “That may not seem large when you’re talking about the scale of Amazon, but to that nonprofit, it probably meant helping a couple more people in that community,” said Rick Cohen, the chief communications officer at the National Council of Nonprofits. “$230 still means a lot to a small nonprofit; $50 means a lot.”
AmazonSmile’s demise is the latest cost-cutting move by Amazon. The revenue boom it saw early in the pandemic has stalled, and the company is in the process of shedding 18,000 jobs. Given the resources involved in sending a few dollars at a time to the more than 1 million different nonprofits in the AmazonSmile program, Cohen said he could “understand the fiscal reasons they did it, but it could not come at a worse time for nonprofits, with all the challenges that nonprofits are facing now.”
Many nonprofits are still seeing increased demand for their services as a result of the pandemic, especially groups that serve low-income and moderate-income communities, according to a November Federal Reserve survey. At the same time, nonprofits are coping with higher costs because of inflation, labor shortages and a lack of child care, the survey found.
Smaller nonprofits are being squeezed in other ways, too. The number of people who donated to nonprofits dropped in 2022, with “micro” donors — people who donate less than $100 — falling by 13.2% compared to 2021, according to the Fundraising Effectiveness Project. Giving trends suggest that larger nonprofits are still receiving big donations from well-resourced donors, while smaller groups are increasingly overlooked, Cohen said.
“‘It’s a little annoying that Amazon is describing this is as a shift in their giving. What it is is taking the decision about where these dollars go away from their customers and into their corporate offices.’”
Despite the end of AmazonSmile, Amazon says it “will continue to pursue and invest in other areas where it can make meaningful change.” That includes investments to build and preserve affordable housing in cities where Amazon has offices, donations to support computer-science curriculum in schools, delivering meals from food banks and providing disaster relief, among other initiatives, the company said.
Both Cohen and Jan Masaoka, the chief executive officer of the California Association of Nonprofits, said they had doubts about whether smaller nonprofits will be able to benefit from Amazon’s philanthropic priorities.
“It’s a little annoying that Amazon is describing this is as a shift in their giving,” Masaoka told MarketWatch. “What it is is taking the decision about where these dollars go away from their customers and into their corporate offices.” To Masaoka, that means Amazon will probably lean more toward supporting groups that could be “strategic partners” for the company.
“For multinational corporations, philanthropic giving is a strategic part of increasing shareholder value,” Masaoka said. “I’m not arguing with that, but the way they do that is by partnering with high-profile, large, non-controversial organizations.”
She worries that could shut out more obscure groups, like the Japanese American Museum of San Jose, a volunteer-run nonprofit that Masaoka supports with her own AmazonSmile account. The museum’s annual revenues were $253,696 in 2020, according to public filings. Aside from providing monetary support, AmazonSmile helps smaller nonprofits maintain a sense of community and loyalty among supporters, she noted.
“It makes me feel closer to the museum, even though they’re getting maybe $1.22 from my purchase,” Masaoka said. “It’s community-building for them.”
Animal-related causes were the top recipients of AmazonSmile donations as of 2020, the company said then. Education, health and disaster-relief groups were also popular choices for donors. Many public-school PTAs use AmazonSmile to raise funds, as do chapters of the League of Women Voters and Girl Scouts and Boy Scouts troops.
The program has also faced some criticism in the past. Though AmazonSmile’s participation agreement prohibits groups that promote intolerance, discrimination, hate or violence, the program routed donations to dozens of anti-LGBT groups, and to anti-vaccine activists during the pandemic.
Many nonprofits that receive donations through AmazonSmile slammed the company’s decision to end it on Twitter, with several asking Amazon to reverse its decision.
“Amazon claims the Amazon Smile program didn’t have an impact,” wrote a New York state animal sanctuary. “I can tell you as an animal not for profit it made a huge difference to us. That $9400 meant the world. That isn’t nothing to us.”