AmazonSmile

It’s been two months since Amazon shuttered its AmazonSmile program, which let Amazon customers select a 501(c)(3) organization that would then receive (from Amazon) 0.5% of the purchase price as a charitable contribution. 

In a post from January of this year, Amazon stated that the reason for ending the service (which reportedly gave away over $400 million a year) was because the program had not grown to create the impact they had originally hoped, and that the impact was “often spread too thin.”

This justification is a bit odd, given that the ostensible purpose of the program was to let customers support causes that were important to them, rather than to effect changes only possible with concentrated and targeted charitable giving.

One wonders whether another reason for ending the program was the administrative headache of dealing with fraud — quite understandably, Amazon deferred to the IRS-maintained list of charitable organizations when giving customers options for selecting recipient organizations. 

As described in this New York Times article, this opened the door for fraudsters to obtain 501(c)(3) exemption via Form 1023-EZ for organizations with names similar to established charities:  to use examples from the article, the “American Cancer Society of Michigan” or “the United Way of Ohio.”

Although Amazon did not say that the inconvenience of preventing fraud had any role in their ending of the Smile program, it could not have helped.

Manoj Viswanathan