Come February 20, AmazonSmile will shutter its doors. Amazon announced last week it would suspend the program and refocus its charitable giving to initiatives that make a broader impact.
At first blush, this news seems detrimental for nonprofits. But AmazonSmile’s demise shouldn’t impact most organizations’ bottom line by more than a few bucks. In fact, the change might just be a good thing.
How the program worked
AmazonSmile let shoppers select a charity to receive 0.5% of their eligible purchases. Amazon billed it as an easy way to support nonprofits while shopping at the world’s largest retailer. But is it? You’d have to spend $1,000 to generate a $5 donation for your favorite charity. Plus, Amazon, not shoppers, gets to claim the contribution on their taxes.
Even so, the program has generated income for nonprofits. Since 2013, Amazon says it contributed some $450 million to more than 1 million nonprofits around the globe. The bulk of the money ($400 million) went to U.S.-based charities.
Some nonprofit leaders have publicly lamented the loss of AmazonSmile funding, but a closer look reveals no cause for concern.
David vs. Goliath arrangement
According to the Washington Post, only four nonprofits received more than $1 million from the program.
- American Red Cross
- American Society for the Prevention of Cruelty to Animals ($10 million)
- Nature Conservancy (at least $6 million)
- Jude’s Children’s Research Hospital ($15 million)
Another 24 group groups received at least $100K, and 230 nonprofits earned upwards of $10,000.
The bulk of the other program participates – some 999,742 organizations – received a pittance.
That’s not an opinion. A development officer with the Catholic Foundation of Greater Philadelphia says most of its partner organizations made less than $100 a year from AmazonSmile. Amazon itself reports that the average annual payout to organizations is $230. It’s fair to assume organizations spent more promoting their “partnership” with AmazonSmile than they ever received.
Inherent program issues
That leads to perhaps the biggest issue with the program. Amazon didn’t promote it, nor did they make intuitive to donate.
To have purchases count, shoppers had to log in through the dedicated AmazonSmile portal. This was an easy step to overlook, and many shoppers innocently assumed they were helping their favorite cause during Amazon shopping sprees.
It fell to nonprofits to instruct supporters on how to access the program. That takes time, effort, and staff many small organizations simply don’t have. Plus, it basically turns nonprofits into de facto Amazon advertisers. As Marc Gunther of the Nonprofit Chronicles put it, AmazonSmile is just “marketing dressed up as altruism.”
What’s more, contributions were based solely on shoppers’ behavior. The amount was variable, so nonprofits couldn’t accurately predict how much they would arrive each quarter. Any professionally managed nonprofit should never have paid fixed costs with AmazonSmile donations.
So what now?
While most didn’t get much funding, some organizations received enough to provide for budget flexibility. Don’t panic. The change gives you the opportunity to seek more sustainable options that let you do more, better.
If you need to make up for these lost dollars, here are some suggestions.
- Apply for a grant from another retailer. Wal-Mart’s next community grant cycle opens on Feb. 1. Eligible nonprofits can apply for up to 25 grants per year or a total of $5,000.
- Join Target Circle Community Giving. Target Circle members vote on which nonprofits the corporate will support in their community. Target awards grants to the nonprofits based on the percentage of votes they receive.
- Launch a fundraising campaign. Tell your supporters how much you stand to lose with the suspension of AmazonSmile. Remind them they get the tax break by donating directly to your organization instead of going through an intermediary like Amazon.
- Create on online merchandise store. Companies like Broken Arrow, Bonfire, or Fundly let you upload t-shirt designs of your own or create them using online tools. The company then creates a webstore where you sell your merch. All you have to is share the link with your supporters.
- Improve your grant-writing skills. You never know when a corporate funding opportunity will show up in your inbox. Be ready to write a winning application by taking our on-demand grant writing course.