Amazon Gets More Serious About Charity

As recently as last year, Amazon was responding to inquiries about how it gave back by saying things like, "If we do our job right, our greatest contribution to the good of society will come from our core business activities: lowering prices, expanding selection, driving convenience, driving frustration-free packaging, creating Kindle, innovating in web services, and other initiatives we'll work hard on in the future." While that sentiment may be nice, it left a lot of people who pay attention to the charitable contributions of successful corporations, particularly those as large as Amazon, shaking their heads. With the launch of its new AmazonSmile program, however, the world's largest online retailer can now say it is giving back by doing something more than just looking out for its bottom line.

Customers can access Amazon through the new portal login using their existing accounts and will have to the same shopping experience that they get through the regular Amazon site. The only difference is that when they log in for the first time, they'll be asked to choose a charity to support. Whenever they make a purchase through the AmazonSmile site, 0.5% of the total will be donated to that charity.

"We think customers will love the opportunity to support their favorite organizations without changing how they shop, and there's no cap on how much Amazon will donate," said AmazonSmile General Manager Ian McAllister. There are some limitations, however. While every physical product available through the site will be eligible for the program, Amazon will not make donations on the purchase of digital products such as eBooks, mp3s, or subscriptions, although McAllister says that could end up changing.

To save itself the time and expense of having to come up with its own qualification system while ensuring the donations are going to legitimate charities — and to give customers the level of choice they have come to expect — Amazon has teamed up with Guidestar, a charitable organization that maintains a database of registered charities based on tax filings. With nearly a million nonprofits listed, you can find a charity for just about any cause, whether local, national, or global. And if your favorite charity isn't listed, then you probably need to check with that charity or contact Guidestar. And, of course, you can change the charity you're supporting at any time.

It's still too early to tell how much money the program will raise for charity, but with the overwhelming majority of Amazon's products being eligible for the program and its total sales of $60 billion-plus last year, the program could easily start raising more than $1 million per month in the first few months. In fact, a quick calculation shows that it would take slightly less than 5% of existing customers using the AmazonSmile website for their regular purchases to reach the $1 million per month mark.

If one thing is for certain, though, it's that charities are excited about this potential new revenue stream. Many will likely urge their supporters to use the program through their websites, social media, and newsletters. "Working with AmazonSmile gives us a new way to support our mission that's simple for both us and our supporters," said Richard Shadyac Jr., CEO of ALSAC/St. Jude Children's Research Hospital, when asked about the program.

"AmazonSmile will make charitable giving easier, which is a big win for our supporters and, most importantly, the 800 million people on the planet who don't have clean and safe drinking water," echoed Scott Harrison, founder and CEO of charity:water.

AmazonSmile will also be a test to see if this sort of program can deliver a measurable increase in sales. But either way, McAllister has made it clear that the company intends to keep AmazonSmile around for a while. At the end of the day, it will probably do more good for Amazon in terms of brand image and free marketing than it will to raise a significant amount of funds for any single charity. When it comes to charity, however, every little bit helps, and this is a painless way for people to raise money for good causes by doing something that they were going to do anyway.

This story will be updated as we receive more information.