Jeff Bezos $2B Pledge: Just Another Amazon Promotion?

Nonprofits already know there's nothing to Amazon Smile about.

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Mr. Burn -- er -- Jeff Bezos. Photo: David Ryder.

Nonprofit arts organizations, you’ve all been had by Amazon.

More precisely — pardon me — you’ve all been whored by Amazon.

There’s an old story about a nobleman who offered a million pounds to a woman if she would sleep with him. She replied in the affirmative. Then the nobleman offered her five pounds. Offended, the woman angrily replied, “Sir, what kind of woman do you think I am?” To which the man replied, “We’ve already established that. Now we are trying to determine the price.”

Your nonprofit is the woman in this scenario, only worse: at least the woman held out for a million pounds. If you’re a recipient of money from Amazon Smile — the charitable giving program attached to the shopping site), your nonprofit accepted a price that is a fraction of a fraction of a fraction of a fraction.

Given that, we have not only established what your nonprofit is, we have established its price. And it’s not flattering in either case.

It is true that unlike many high-level donors, Amazon Smile does not ask you to change your programming, hire their son-in-law or endure a pesky management audit. But neither does your $50 donor (in most cases). Is the amount of money garnered through Amazon Smile worth the potential loss of philanthropy from other sources? Consider the perspective of John Q. Public, as written by Brady Josephson in The Huffington Post:

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People can buy products, feel good about giving to charity and move on with their lives when in reality, only 0.5 percent of their purchase is being given to their cause. So if you wanted to give $50 to a charity, you’d have to spend $10,000 through Amazon Smile. $10,000 to Amazon. $50 to charity. It’s pretty clear who wins here and I’ll give you a hint: It’s not the charity.

Amazon’s “donation” to your nonprofit is one half of one percent — that is, one half of one cent for every dollar. For every $100 spent when an Amazon customer remembers to use the Amazon Smile portal, the charity receives 50 cents.

Now, one may argue that 50 cents gained is 50 cents earned. But you have to see the transaction from the customer’s point of view to see how damaging this little gift can be.

John Q. Public really likes his local library. Each year, he gives $50 to the library’s nonprofit foundation to help them buy books. Amazon Smile has told Johnny that, at no cost to him, they’ll make a donation to his library. Naturally, Johnny feels good about his decision to use Amazon, and now he feels less obligated to give a larger donation to the library. He decides not to give directly to the library anymore. I’ll just shop through Amazon Smile, thinks Johnny, as he goes on with the thousands of tasks he tackles during any given day.

Maybe Johnny’s bought a lot of stuff from Amazon. Maybe, before taxes, he bought $2,500 worth of stuff over a year. I did, and here is the result of my purchasing/donating through Amazon Smile:

That last figure sounds like a lot, doesn’t it? $89,030,554.80. Eighty-nine million dollars to any charity is substantial, even if it comprises the entirety of giving since October 2013.

However, put in context, John Q. and all the other little Publics bought $17,806,110,960 worth of stuff to generate that donation. That’s $17.8 billion to generate couch-change of $89 million. Amazon may argue that the donation is voluntary, but let’s remember that Amazon sets the prices of products. Yes, Amazon is greedy enough to add that “donation” to the price of a product in the first place.

The donation costs Amazon nothing, the donor nothing and the charity almost nothing. It might even cause less giving. So, if you’re a charity, why participate in Amazon Smile? It’s a sticky question.

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Distraction-Based Giving

Nonprofit development directors may tell you that distractions like Amazon Smile, public contests for support, and donations that are about adding programming to serve a donor’s interest cause them the biggest headaches. They will also tell you that a nonprofit that is from these activities will present boards with the idea that their development director isn’t turning over every rock.

Large-donation foundation philanthropy is notorious for the strings they place on donations. They often require the nonprofit to add programming, which comes with more expenses and more reporting (but almost always no staff) to reach a certain goal. Such gifts are not only increasingly rare, they occur in a world in which the idea of doing good takes the place of eliminating harm. Doing good makes headlines. Eliminating harm is boring.

These words were spoken with more than a little sardonic hue by Anand Giridharadas in his famous “Aspen Consensus” speech in 2015:

The winners of our age must be challenged to do more good. But never, ever tell them to do less harm.

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But Jeff Bezos’ $2 Billion Pledge Makes Him a Good Guy, Right?

On Sept. 13, Jeff Bezos, whose net worth is estimated to be about $164 billion, pledged $2 billion to start two funds. The first, called the Families Fund, would “issue annual leadership awards to organizations and civic groups doing compassionate, needle-moving work to provide shelter and hunger support to address the immediate needs of young families.”

The second fund, called the Academies Fund, would create “a network of high-quality, full-scholarship, Montessori-inspired preschools in underserved communities.”

The first fund would reward leaders of organizations for doing good work, as measured by Bezos. The second would create an alternative school system for pre-schoolers, created out of whole cloth by Bezos.

Neither fund appears to eliminate harm. The Academies Fund in particular seems to eschew any plan to work collaboratively with other prominent educational organizations.

And remember: it is a pledge, not a gift. There is a big difference, including a lack of information about the source of the gift (foundation? donor-advised fund? cash?).

The universe is understandably skeptical.

And there was this — presciently — on Sept. 7, from Sen. Bernie Sanders:

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Meantime, I recently devoured a New Yorker article by Elizabeth Kolbert. It turns out that Bezos has a lot in common with Andrew Carnegie. They both became extraordinarily wealthy — arguably the wealthiest Americans of their time.

Carnegie wrote the first modern treatise on philanthropy, called The Gospel of Wealth. In it, he gave a sermon from his own personal mount. Carnegie believed philanthropy should benefit “the general condition of the people.” He believed that he and his contemporaries ought to consider each other “the mere trustee and agent for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer.” He built 2,500 libraries for the people. He built a major foundation with current assets of $122,378,105. He sponsored a major performance hall not just in NYC but another in Allegheny (now the north side of Pittsburgh). One of the nation’s most prestigious universities bears his name.

As the cartoon above, which ran in the Saturday Globe of Utica, NY, notes that Carnegie was also a ruthless businessman. He brought those same “poorer brethren” to their knees after killing seven union workers in the 1892 Homestead steelworker riots. The caption insinuates, perhaps rightly, that Carnegie was forced into doing harm in order to do good. Well, Bezos is no different.

In January 2018, for example, according to an article in Rolling StoneBezos donated $33 million to help 1,000 Dreamers get a college education. During the same week, after Amazon posted a $2 billion quarterly profit, he laid off hundreds of people at Amazon’s headquarters in Seattle. Presumably that helped him pay for those college educations.

Then Amazon achieved a profit of $1.6 billion for the next quarter, and a profit of $1.2 billion in the next.

At the same time, the circus surrounding the establishment of HQ2, Amazon’s second world headquarters, went into full swing. Not that Bezos’ company doesn’t already receive substantial subsidies from government: at last count, over $1.6 billion. As cities fall all over themselves to try to get HQ2 built in their town, that number might double. Or triple.

As the Rolling Stone article lamented:

Imagine how many people he could help if Amazon paid taxes, wasn’t focused obsessively on replacing workers with automation, didn’t employ hundreds of thousands of temps who are paid low wages and receive no benefits, and declined to engage in reality TV-style “contests” to find out which state and local governments will succumb to desperation and give his very, very profitable company billions of dollars that might otherwise be spent on things like…education, for one.

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Bezos has had a propensity to give only when it gives him positive headlines. Dreamer education. The Bezos Center for Innovation at Seattle’s Museum of History and Industry. He even committed a couple of million to building a Mary’s Place shelter within the walls of Amazon. Truth be told, with all the subsidies for land and office space, that doesn’t cost him all that much. And even then, he gives as little as he can to achieve that result. A $33 million donation from a man whose wealth exceeds $160 billion equates to a $206.25 gift from a man worth $1 million.

In other words, not a whole hell of a lot.

Add to that the fact that more than 10% of his Ohio employees are on food stamps, there are reports that Amazon employees in an English fulfillment warehouse urinate in bottles instead of using a restroom for fear getting into trouble for taking too long away from the job, and that “not only will Amazon not be paying anything in 2017 federal income taxes, but it will also be getting a $137 million tax refund from the US government,” and you can see that there is very little difference between Carnegie and Bezos. The problem is this: we know that Carnegie actually spent his money in all those large acts. Will Bezos? There is no guarantee.

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What Can Your Arts Nonprofit Do?

First and foremost, not much: malaise, cynicism and greed are nothing new. Big business leaders in your town believe the same things as Bezos. They believe philanthropy is a top-down, foot-crushing tool instead of a way to raise the levels of life for the most people.  They do not believe in a level playing field. Why would they? The field they play on benefits them. Like Bezos, they believe they made their money by themselves and deserve not only the riches that accompany that thinking, but the buttress against paying — gasp — their fair share of taxes. Or, in Bezos’ case, any taxes at all.

Some will cite a genuine concern about needing to satisfy their shareholders first and that larger profits takes precedence over generosity, as if that described the dichotomy. (Note: it does not.)

So the next time your board tells you how excited they are about Amazon Smile, remember Carnegie and Bezos — not their similarities, but the one giant difference between the two tycoons.

Carnegie treated his workers like dirt and built libraries. His contemporaries started foundations that funded hundreds of nonprofits and generated even more philanthropy.

Bezos treats his workers like dirt and built wealth for himself on their backs. He has promised money for ventures that please him. His idea of charity is to treat the underserved as customers. I guess that’s better than treating them as Amazon employees, I suppose.