Socially conscious spending has trended upward for years, but when the social justice movement took center stage in 2020, it seems to have ascended to greater heights. For instance, "The Social Consumer Spending Index," compiled by marketing firm GoodMustGrow, revealed that in 2020, social spending leaped forward by 15%—a sign that consumers are more interested in giving back when they shop.
Amazon, though, caught on to these trends early. One of its most visible and popular ways to engage socially aware shoppers has been with its signature program, Amazon Smile.
What Is AmazonSmile?
AmazonSmile, a separate portal from Amazon's main site, offers the same items, prices, and benefits as Amazon.com, but with one distinct difference.
When users shop on AmazonSmile, the retailer's Foundation contributes 0.5% of the price of eligible purchases to the charity of your choice.
There is no cost to charities or customers, and 100% of the donation generated from eligible purchases goes to the consumer's charity of choice. For frequent Amazon users, this additional perk is a great way to give back to charities effortlessly.
It's the ease of use that attracts socially responsible shoppers to AmazonSmile. They can choose the charity they wish to support, change that charity later if they wish, and shop on the website or with the Amazon app on their mobile devices.
While AmazonSmile is not the only example of giving to charity while shopping, its tech solution seems unique in its convenience.
How Amazon Smile Works for Consumers
Using AmazonSmile is easy once you are set up. However, for new Amazon users, it might be a bit daunting.
How to Set Up Your AmazonSmile Account
Go to the AmazonSmile hub and click "Get Started." If you already have an Amazon account, you'll be asked to sign in. If you don't have an Amazon account, you will need to set one up. It doesn't cost anything to set up a basic Amazon account.
If you already are an Amazon Prime member, all Prime benefits will be available at AmazonSmile. If you are not a Prime member and want to join, there is a fee to set up an Amazon Prime account, although there is also a trial membership.
How Do I Choose My Charity?
Once signed into AmazonSmile, you will be prompted to pick a charity. You can choose one from the provided list or type in another of your choosing. There are more than 1 million eligible 501(c)(3) charities listed.
Once you do that, a percentage of your purchase price on many, but not all, items will be donated to the charity of your choice. During future visits to the site, AmazonSmile will remember your charity and apply eligible purchases towards your total contribution—it is that easy.
How Does the Donation Work on AmazonSmile?
Keep in mind that, unless your nonprofit or charity has registered with AmazonSmile, your accrued donations will go to another registered cause after eight quarters.
If you are wondering if your preferred organization is registered with AmazonSmile, you can reach out to it via email or social media before selecting them from the AmazonSmile charity list. Many charities promote AmazonSmile on their websites.
AmazonSmile will also notify that organization that they need to register to receive donations from your eligible purchases once you select them in your account.
You must remember to go to AmazonSmile each time you shop for all of this to work. So, consider bookmarking the site or use Amazon Assistant.
You can also use the Amazon mobile app on your phone or other mobile devices to access AmazonSmile. Just log on to the app, look for AmazonSmile in the menu, and follow the directions.
What Items Are Eligible for AmazonSmile Donations?
On AmazonSmile, there are millions of items for sale. Many but not all are eligible for a donation. When you purchase an eligible item, the AmazonSmile Foundation will donate 0.5% of the purchase price. The purchase price does not include rebates, shipping & handling, gift-wrapping fees, taxes, or service charges.
In short, only the individual cost of the eligible item (after sales and discounts) will qualify for the 0.5% donation.
Before you check out, make sure your purchase qualifies. Look for the "Eligible for AmazonSmile donation" stamp in the product's description. If it is not there, the product will not count toward your total donation.
Returned items do not count toward the donation amount, and "Subscribe and Save" purchases are also ineligible.
Are AmazonSmile Contributions Tax Deductible?
Because the AmazonSmile Foundation makes the donations, they are not tax-deductible by the consumer. You must donate cash or property yourself to qualify for charitable tax deductions.
How AmazonSmile Works for Charities
If you are a charitable nonprofit or fundraiser wondering if AmazonSmile is a good option, you probably have a few questions and concerns.
First, you must be a registered 501(c)(3) public charity in good standing with the IRS.
You can sign up quickly on Amazon's Org Central page. Once you have entered your qualified 501(c)(3) organization name or employer identification number (EIN) and submitted all necessary information, you will be able to receive donations from the AmazonSmile Foundation once your account is approved.
Why Should You Register for AmazonSmile?
You should register with AmazonSmile just in case your supporters have already designated you to receive their donations.
Consumers can search for your organization, and your charity may be listed but unclaimed on AmazonSmile. When the charity has not registered yet, the consumer's eligible purchase donation will go in a "communal" fund. At the end of eight quarters, that fund will be donated to other registered charitable organizations.
It is also essential to check your organization's status on AmazonSmile, even after you have enrolled. Changes in standing with the IRS or "violations" of the AmazonSmile Participation Agreement can eliminate your organization for eligibility.
You could be dropped if your bank account changes or even your email. While Amazon will notify you if you are dropped, you must respond promptly and fix the issue.
Claiming your account on AmazonSmile does not cost anything. But if you don't claim it, you could lose any donations that might accrue.
How Do Charities Receive Donations?
Once a customer places an eligible order, AmazonSmile applies the donation amount and puts it into a fund for that individual organization.
Each quarter, the AmazonSmile Foundation deposits the donation funds via electronic funds transfer. Your organization should receive the funds approximately 45 days after the previous quarter ends or when the amount reaches a minimum threshold.
Pros and Cons of AmazonSmile for Consumers
Easy and free
- Requires double-checking
- One-at-a-time donations
- Small donation amount
Pros for Consumers Explained
- It's easy and free: Most of us shop to some extent on Amazon, so it's fairly easy to include a charitable donation. It's easy to sign up, pick a charity and have a small portion of your purchase price go to that charity. There is no additional cost to the consumer beyond the purchase price.
Cons for Consumers Explained
- Requires double-checking: AmazonSmile does require you to double-check that you are on the correct site. While it is easy to shop and donate on Amazon, you still have to make sure that you are on the AmazonSmile shopping portal for it all to work seamlessly. Amazon may remind you to switch to AmazonSmile sometimes.
- One-at-a-time donations: On AmazonSmile, you cannot donate to more than one charity at a time. Many of us support more than one charity and would like to donate to all of them. However, on AmazonSmile, one would have to go to the trouble of switching one's charitable choice periodically to cover more than one charity.
- The donation amount is small: It takes a really long time for your donations to add up to anything significant. These tiny donations should not substitute for larger donations made directly to your favorite charities.
Pros and Cons of AmazonSmile for Organizations
- Can be lucrative
- Easy to set up
- Most supporters shop on Amazon
- Offers passive, long-term donations
- Donations are small
- Can dampen giving habits
- Cannot access personal data
- Need to advertise
Pros for Organizations Explained
- It can be lucrative for the right organizations: For large organizations with millions of supporters, AmazonSmile donations can add up even though individually they are small. Some charities bring in quite a lot of money in this way. Even CharityNavigator, the charity watchdog, approves of AmazonSmile, pointing out that some charities have reaped millions from the program.
- It's easy to set up: As long as you are a 501(c)(3) charity, it's easy to get set up for AmazonSmile. After that, it takes precious little to keep it going. AmazonSmile for some charities is an easy way to bring in more funds.
- Most of your supporters shop on Amazon: Even for small charities, this fact is persuasive. If your supporters are already on Amazon, why not register so you can receive any donations that come along?
- AmazonSmile offers passive, long-term donations: AmazonSmile offers donations based on already engaged consumers. It also remembers each consumer's chosen charity, automatically collecting donations as the consumer shops. The AmazonSmile platform has millions of users a month, making it one of the largest platforms for nonprofits to access passively.
Cons for Organizations Explained
- The donations are small: For many charities, AmazonSmile's 0.5% of eligible purchases may seem negligible. It takes a long time for them to add up. Only the site's ease of use and massive audience counteract this drawback.
- Can dampen consumer giving habits: Some nonprofit experts speculate that using AmazonSmile will dampen consumers' personal (and much more substantial) giving habits, meaning. By feeling like they have already "contributed" through their purchase, your supporters may think they don't have to do anything else to support you. Fundraisers might worry that their previously engaged donors will not donate directly to their favorite causes.
- You cannot access any personal data about your donors: Charities are unable to access donor data through AmazonSmile. This eliminates a huge source of information that could make it easier for nonprofits to access new opportunities for donations. In other words, your organization will not be able to add that donor to your database or send a thank you.
- Need to advertise: You will need to advertise AmazonSmile on your website and social channels to make it worthwhile. Although AmazonSmile does perform some marketing for its program, it is essential that your nonprofit also market it. Let your supporters know that your organization has signed up with AmazonSmile and nudge them to use it when shopping at Amazon.
- For the right charities, AmazonSmile might be a welcome source of significant income.
- For smaller organizations, AmazonSmile may not be the best option, especially if data and personally engaged donors are essential for your cause.
- It is not the path to large-scale giving, nor will consumers make a massive difference for their chosen charities by shopping online a few times a year.
- The critical thing for consumers to remember is that AmazonSmile is not meant to replace personal donations, but offer them one more opportunity to support charities while going about their daily lives.
- Think through the pros and cons and make the right decision for your charity.
Frequently Asked Questions (FAQs)
Does AmazonSmile have higher prices?
The prices on AmazonSmile are the same as on the main site. Adding a donation does not raise the price. Amazon's Foundation pays .05% of the purchase price for the donation.
Is AmazonSmile only available to Prime Members?
Consumers do not have to be Prime members to use AmazonSmile. If you are a Prime member, all the benefits you earn apply also to purchases on AmazonSmile.
How do I change my AmazonSmile charity?
Changing your charity is very easy. While on AmazonSmile (desktop or mobile), select "Your Account" from the navigation menu on any page and select "Change Your Charity."