The AmazonSmile tagline—You Shop. Amazon Gives.—has become ubiquitous in all manner of U.S.-based nonprofit communications. It’s hard to miss the encouraging reminders to, “Support us when you shop online!” in e-newsletters, social media posts, email signatures, and website banners. But is it really worth the effort… for any of us?
How it works: the basics.
When you shop with Amazon, you have the opportunity to generate a donation to a nonprofit of your choice. For your purchase to generate a donation:
- you must be shopping using the smile.amazon.com link (purchases made through www.amazon.com will not apply)
- select an eligible 501(c)(3) public charitable organization
- the products you purchase must be marked as “eligible for AmazonSmile donation”
Additional exclusions from donation-generating eligibility include:
- recurring ‘subscribe & save’ purchases
- subscription renewals
- purchases made via mobile app
Each quarter, Amazon then donates 0.5% of all eligible purchases to the charitable organizations designated by its customers. These donations are made through the AmazonSmile Foundation by electronic funds transfer approximately 45 days after the end of each calendar quarter.
Most folks seem to consider this a simple, win-win program for both consumers and nonprofits with no perceivable downside. Yet, the program does have critics and detractors, including charitable organizations that have made a deliberate choice to opt-out of participating, or at least to forgo any active promotion of the program. But, why?
A few things to consider
The caveats for consumers and nonprofits differ somewhat, but should be considered by both groups for their potential collective impacts.
As a customer, it’s important to consider:
- these donations are made by the AmazonSmile Foundation and are not tax deductible by you
- unless you are making extensive purchases, your donation is likely to be quite modest; for example, to generate a $20 contribution you’ll need to spend at least $4,000—excluding shipping, handling and taxes (0.5% = your purchase x 0.005)
- if your designated charity has not already registered with AmazonSmile, Amazon will contact the nonprofit to provide instructions on how to register; the funds will be held for up to eight quarters (2 years) and if the nonprofit has not registered by that time the funds will be reallocated to other registered charitable organizations
As a nonprofit, it’s important to consider:
- whether there are any real or perceived conflicts between your organization’s mission and values and Amazon’s business practices (e.g., labor practices, tax avoidance, packaging waste, allegations of anti-competitive or monopolistic behavior, etc.)
- utilizing AmazonSmile may give consumers an inflated sense of their level of giving that could suppress or reduce direct giving
- actively promoting Amazon may unintentionally redirect business from local merchants in your community
- based on a rough count of contributions pulled from AmazonSmile Foundation’s 2018 Form 990-PF, the vast majority of recipient nonprofits (73%) earned between $5 and $99 in total contributions for the calendar year—here’s a back-of-the-envelope break down pulled from pages 19 through 2121 of the document:
- receiving over $1,000,000: 2 organizations
- …between $100,000-839,000: 13 organizations
- …between $10,000-99,000: 103 organizations
- …between $1,000-9,700: approx. 2,200 organizations
- …between $100-999: approx. 60,700 organizations
- …between $5-99: approx. 171,700 organizations
- …exactly $5 (minimum): approx. 1,200 organizations
Strategies to optimize impact
Despite all of this, many nonprofits will continue to participate for a multitude of reasons, including being:
- large and well-resourced or sophisticated enough in their AmazonSmile strategy to generate significant funds—remember, this will be an extremely small minority!
- lured by the perception of ‘free money’—at a minimum there is an opportunity cost to the time spent promoting this program vs. something else
- pressured by board members or community supporters who feel good about using AmazonSmile—because of an outsized perception of the impact they are making
For organizations that make an informed decision to participate, there are ways to maximize contributions and leverage Amazon’s powerful platform.
1. Encourage consumers to match Amazon
While this idea may be a bit of a creative stretch, it’s shared in the spirit of developing a way to both educate your supporters about how much (or little) your organization receives from AmazonSmile and encourage a direct donation. For example, as part of a year-end appeal, you might challenge supporters to log into smile.amazon.com, view their ‘AmazonSmile Impact’ and then make a matching donation directly to your nonprofit. The amount is likely to be small, but when they make a gift directly to your organization you’ll be able to thank them (Amazon doesn’t provide you with a list of donors who selected your charity while shopping). As a bonus, some supporters may be surprised at just how small the contribution is and opt to donate even more. Alternatively, in reviewing their AmazonSmile giving history they may discover that they haven’t previously selected your organization and decide to designate your organization for their next purchase.
2. Utilize AmazonSmile Charity lists
In late 2018, Amazon introduced a new feature to AmazonSmile: Charity Lists. Essentially, nonprofits registered with AmazonSmile can create a wish list of needed products and supplies that are available for purchase on Amazon. Supporters can then be directed to these lists from which they can select, buy, and donate items which will be shipped directly to your organization. Products on your wish list that are marked as “eligible for AmazonSmile donation” also generate a 0.5% donation when purchased through smile.amazon.com.
3. Explore the Amazon Associates program
Amazon Associates is an affiliate marketing program through which your organization advertises selected products available for purchase through Amazon on your organization’s website, mobile app, and/or social network(s). Anytime a person clicks through one of these special links and buys the product from Amazon, you earn referral fees. If you’re interested to explore this program, be sure to carefully review the application review process to ensure you understand and meet the program requirements before you apply. If your initial application is rejected, you will not be able to reapply. There are a few other important considerations, including the fact that any revenue generated through this program will likely be subject to unrelated business income tax, and extensive participation guidelines that govern how you promote your participation.
4. Plan a calendar of promotions
Whether you opt to participate in AmazonSmile or not, creating some kind of communications plan is essential for all nonprofits—regardless of size or mission! In this case, having a simple calendar of notable ‘shopping holidays’ is key to ensuring that the timing of your email and social media reminders—and website updates—align with periods when more folks are likely to be doing a little online shopping. Fewer, well-timed messages promoting AmazonSmile in tandem with other timely mission-focused updates can be a helpful strategy to boost supporter participation and make communications easier to manage. And remember: if your nonprofit doesn’t see a boost in its annual contributions from AmazonSmile, it may be time to redirect your time and attention to other activities.
If you have additional thoughts or tips to share, or if you found this post helpful, please be sure to comment below!
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I’d never heard of Amazon Smile and I wouldn’t have participated anyway. Doesn’t feel right not because of your assessments (which I appreciate and agree) but rather because it isn’t Malama it’s purely transactional from Amazon’s practice.
This is super helpful, Jen! I never quite knew how it worked. Mahalo for the clear and thoughtful assessment! – Ku’ulani