Amazon Says It’s Shutting Down Its Charity Service So It Can Save Money

Amazon is axing its Smile charity website to cut costs amid a tightening economy and continuing layoffs.

By Jennifer Hollohan | Published

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After drastically increasing their staffing levels during the pandemic, tech companies have had to make an abrupt about-face in recent months. Tens of thousands of workers have lost their jobs, which is rough news. However, even programs like Amazon Smile are now impacted by tightening tech wallets.

Amazon Smile is a charity program started by the e-commerce site. The program launched in 2013 and has amassed over $500 million in charitable donations worldwide. It partners with over one million 501(c)(3) organizations.

Any customer who shops on Amazon can participate. There are two easy ways. First is just to do what you do…shop.

But instead of shopping on the standard website, Amazon Smile has its own link. Customers shop via that link, where the same products are available for the same price. Once an order is complete, Amazon will automatically donate 0.5% of the sale to the chosen charity (on eligible items).

Alternatively, Amazon Smile compiles a list of charities that need and accept physical items. Anyone can log on, browse the list, and purchase much-needed items that will then get shipped directly to the organization. The program is great…in theory. 

However, the sheer number of charitable organizations has drastically reduced the impact. According to CNN, “an average donation of less than $230 per charity” is all headed out the door. Despite that low number, any contribution is certainly welcome.

The problem, though, is not the impact Amazon Smile has on each charity. Instead, it is the tight financial pickle the company landed in after pandemic restrictions eased. After growing exponentially, Amazon now has to cut costs.

And that means Amazon Smile is on the chopping block. “The Smile initiative will shut down by February 20, Amazon said in a statement Wednesday, explaining the ‘program has not grown to create the impact that we had originally hoped.’” However, it’s not all bad news for the organizations currently partnering with Amazon.

“Charities enrolled in the program will get a one-time donation ‘equivalent to three months of what they earned in 2022,’ Amazon said, noting that charities will still be able to accrue donations until the program closes.” So there is roughly one more month to send your donations off. Since most of us shop on Amazon regularly, it may make sense to do so from the Amazon Smile site for the next few weeks.

The program’s shutdown is only the latest in a string of cost-cutting measures Amazon is pursuing. Recently, news of mass layoffs at Amazon got out. They will impact approximately 18,000 workers.

A handful of departments will feel that impact more than most, including Amazon Stores and human resources. And it is likely not the only round of cuts or program closures on the horizon. The company still has some serious budget cuts to make.

Despite all the cuts, Amazon insists it will continue charitable contributions. And although they have not announced any specific donations, company leadership did float a handful of ideas. Those include organizations that champion affordable housing, and those that focus on disaster relief efforts.