One of the odd things about corporate philanthropy is how it’s often one step behind the rest of the sector. While major companies take pains to portray themselves as on the cutting edge, charitable giving is one arena where they like to play it safe. Even when they do shake things up, reorganizing long-standing giving programs to better align them with company prerogatives, the result can feel at odds with where today’s philanthropic momentum is headed.
As the latest example of this, look no further than Amazon’s decision to axe its charitable initiative AmazonSmile on the basis that it lacked “impact.” AmazonSmile isn’t that old — it dates back to just 2013 — but that decade represents a period of immense growth for the online retail behemoth, which surpassed Walmart’s market cap in 2015 and hit $1 trillion for the first time in 2018.
For most current Amazon customers, AmazonSmile has been a constant in the company’s ever-expanding range of offerings. The program let customers direct a tiny fraction (a half of a percent) of the cost of their purchases to charities of their choosing. More than a million potential nonprofit recipients signed up to get a piece of the action, and since AmazonSmile began, the company has donated a total of roughly $449 million through the program.
Of course, AmazonSmile hasn’t constituted the company’s only philanthropy during that time. It’s given in a more traditional manner through vehicles like its Housing Equity Fund, which supports affordable housing construction in cities where Amazon has a major corporate presence. But AmazonSmile was the firm’s most well-known and public-facing philanthropic endeavor, and in a certain sense, it could be said to have “democratized” the company’s giving — sometimes with unintended consequences.
Amazon’s rationale for ditching the initiative, meanwhile, sounds like something straight out of the heyday of strategic philanthropy. “The program has not grown to create the impact that we had originally hoped,” the press release reads. “With so many eligible organizations — more than 1 million globally — our ability to have an impact was often spread too thin.”
This decision to adopt a more tightly focused (read “strategic”) approach echoes similar moves by other corporate philanthropies. From big banks to tech giants and auto manufacturers, many major companies have been on a quest to better integrate their giving with their primary modes of business. As Dana Brakman Reiser and Steven A. Dean put it in a recent op-ed, “Corporate giving programs have become fully enmeshed in — ceasing to represent an exception to — these firms’ business strategies.”
In many cases, as those authors argue, this has resulted in the “sidelining” or even the dismantling of separate corporate foundations. In Amazon’s case, it represents the sidelining of Amazon customers’ preferences (from that press release: “In 2013, we launched AmazonSmile to make it easier for customers to support their favorite charities”) in favor of what the bigwigs in Seattle want to support.
This sort of thing is hardly shocking from corporations, whose reason for being is to profit their shareholders, not to back a bunch of eclectic causes. The real question is why it took so long for many major firms to jump on the strategic philanthropy bandwagon. You’d think, after all, that these places would have been among the first to update staid old giving practices in favor of what would better benefit the boardroom.
But oddly enough, it seems like the philanthropic sector spent the initial years of the 21st century more enamored with corporate-inspired strategy than corporations themselves, at least where their giving was concerned. And now that many of these companies have come on board, strategic philanthropy is already going out of fashion here in the philanthrosphere. Though still far from the norm, the cutting edge in institutional philanthropy now lies in more decentralized forms of grantmaking — steering away from impact-obsessed project grants, inviting community members to guide giving, and of course, MacKenzie Scott showering hundreds of nonprofits with unrestricted funding.
I should note that there was a strategic element to the rollout of AmazonSmile, which the New York Times says coincided with the company’s efforts “to expand its then-middling Prime membership business.” Now that Prime is so predominant — and as the company looks to trim costs, including by laying off thousands of workers — maybe the program just wasn’t useful anymore.
Whatever the case, given the fact that a main function of corporate giving is to burnish the company’s brand, it’s still a bit baffling to see Amazon pare away a popular, customer-driven charity program in favor of a limited-reach, more top-down approach. Instead of abandoning AmazonSmile entirely, perhaps the company could have opted for some sort of redesign, say, around a more limited range of charities to choose from.
No one’s expecting Amazon or other corporate mammoths to pull a Patagonia and fully restructure themselves around nonprofit causes. But just as bottom-up, more “democratic” forms of philanthropy come into style and strategic philanthropy comes in for criticism, it seems premature for Amazon to ditch its signature point-of-sale charity program. Unless this was really just all about the company’s bottom line, which is a good bet.