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Goodbye to AmazonSmile: Exploring the aftermath for charitable organizations
June 8, 2023 — In February 2023, Amazon shut down its AmazonSmile program, which allowed customers to pick their favorite charitable organizations to receive donations from Amazon.
This type of “giving by proxy” is a unique approach to fundraising and an emerging source of resources and support for nonprofit organizations. These programs create a hassle-free stream of funding for nonprofits that helps them further their cause.
Launched in 2013, AmazonSmile was a charity donation program that allowed people to purchase products from Amazon via amazonsmile.com - an alternative way to shop on Amazon. While checking out, customers could designate a charity of their choice. Amazon would then donate 0.5% of the purchase total to that charity, out of Amazon’s pocket, on behalf of the customer.
According to Patrick Malone, a spokesperson for Amazon, the company's choice to discontinue the program was motivated by a strategic shift to prioritize larger-scale initiatives, such as its $2 billion commitment to affordable housing development.
Malone emphasized that the discontinuation was a result of the need to reassess the program and should not be seen as a criticism of the supported nonprofits.
After announcing the shutdown of AmazonSmile, the company expressed its commitment to assisting charities in their transition by offering a generous one-time donation, equivalent to three months' worth of their earnings from the program in 2022. Additionally, these charitable organizations had the opportunity to receive donations until the program officially concluded in February 2023.
According to Amazon, the program raised and donated over $400 million to charities in the U.S. and $449 million on a global scale in its span of 10 years. In 2022, AmazonSmile's average donation per charity was $230 in the U.S., NPR reported.
“After almost a decade, the program has not grown to create the impact that we had originally hoped. With so many eligible organizations—more than 1 million globally—our ability to have an impact was often spread too thin.” Amazon stated in its press release announcing the shutdown of the program.
United Food Bank is a nonprofit based in Arizona that aims to eliminate hunger. It was also a participating organization with AmazonSmile.
United Food Bank serves the Phoenix metro’s East Valley and eastern Arizona. It delivers food to its 150 partner agencies, who then get it out to the neighbors that need the food.
AmazonSmile disbursed donations on a quarterly basis. United Food Bank started to receive deposits from AmazonSmile in February 2014. Since then, a total of $4,156.01 had been donated to the organization by AmazonSmile.
“For United Food Bank, we’re a lot larger and so [those donations] had a smaller impact. So we didn't get much money from it,” Megan Montalvo, the CFO of United Food Bank, says of the relative impact on the organization.
The first sum of money received by United Food Bank was the lowest that they received over the course of nine years. The highest monthly amount they received was $454.97, in March 2022.
With $1,142.52, 2022 was also the year of the highest amount of money received on a yearly basis.
Although the overall amount of money received by United Food Bank over a span of nine years was not particularly significant, there was a noticeable and consistent growth in annual donations.
Montalvo suggests that smaller nonprofits appeared to benefit more from AmazonSmile. For instance, a small-scale nonprofit would find $400 significantly more valuable than a larger nonprofit that has a huge operating budget.
Habitat for Humanity Central Arizona is a nonprofit organization that works to bring people together to build homes, communities and hope. Similar to United Food Bank, they received a total of $3,971 since 2014 from AmazonSmile, according to a representative from the organization.
On the contrary, AmazonSmile donations provided substantial support for certain organizations. St. Jude reported $15 million in donations from AmazonSmile throughout the program's existence and became the first nonprofit to reach the $10 million milestone in partnership with AmazonSmile in 2020.
“AmazonSmile is a great way for consumers to give back. Every AmazonSmile shopper who donates to St. Jude is helping make a difference for patients and families worldwide,” said Richard C. Shadyac Jr., president and CEO of ALSAC, the fundraising and awareness organization for St. Jude Children's Research Hospital.
Other "giving by proxy" programs remain
Despite the end of AmazonSmile, nonprofit leaders have alternative programs to explore for receiving funds. By leveraging these programs, nonprofit organizations can continue to secure funding and further their respective missions.
Walmart Spark Good
Walmart’s Spark Good program is an umbrella for all of the company’s philanthropy. It offers a comprehensive platform for philanthropy, including fundraising, volunteering, marketing and grants.
As of 2023, only public charities (those falling under 501(c)(3)) are eligible to enroll with Spark Good. Once a nonprofit is eligible to participate, it needs to become a verified member of the Spark Good program.
A verified member-charity of the program is then eligible to request space in front of Walmart stores for marketing and promotion.
Organizations can also apply for up to 25 grants per year, create registries to share with their supporters, and receive funds through the “round up at checkout” feature of the program.
Fry’s Community Rewards
Fry's Community Rewards program, similar to AmazonSmile, allows individuals to contribute effortlessly by linking their Fry’s card to a chosen organization. This is a platform that allows nonprofits to widen their reach and maximize their impact.
By linking their card to an organization, individuals can help direct Fry's charitable giving while shopping at the store. "Fry’s donates annually to participating organizations based on your percentage of spending as it relates to the total spending associated with all participating Fry’s Community Rewards organizations," according to the program website.
Learn more about Fry’s Community Rewards.
Target Circle Community
The Target Circle Community is a unique approach to the “giving by proxy” method of philanthropy. Individuals are required to become Target Circle members in order to take part in the program.
They then have the opportunity to earn votes with each transaction at Target. These votes can be used to determine the allocation of funds, supporting both local and national nonprofits. Target distributes grants to nonprofits based on the percentage of votes they receive during each voting period.
What sets this program apart is its unique voting-based system. The funds are directed based on the votes cast, rather than being influenced by the amount spent on purchases. Since the donations are granted, there is no additional cost incurred by either the nonprofit or the consumer.
Learn more about Target Circle.
eBay for Charity
eBay for Charity is another program that allows customers, as well as sellers, to donate to charities of their choice.
Buyers can designate a certain amount of their transaction during checkout, donate gifts, or participate in eBay’s time-sensitive special campaigns.
Sellers, on the other hand, have the convenience of selecting a charity and specifying a donation percentage ranging from 10% to 100%. In return, eBay waives the corresponding percentage in fees. Once the item is sold, the donation is automatically forwarded to the chosen charity, and the seller receives a donation receipt.
In order to be a part of the program, nonprofits must register themselves with eBay. Once in the registry, buyers and sellers can choose to donate to any qualifying nonprofit organization.
Nonprofit organizations with access to quality inventory are encouraged to sell it on eBay. The company waives 100% of the basic selling fees so sales proceeds directly benefit the organization in the form of unrestricted funds.
Learn more about eBay for Charity.
Story by Riva Surana, ASU Lodestar Center.
Illustration by Yuxin Qin for the ASU Lodestar Center.
This story is part of the Nonprofit Social Innovation Hub, where organizations can find ideas and inspiration from their colleagues in the nonprofit and philanthropic community, from new operating models to fresh technology solutions.
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