Those of you who have nothing better to do than read MillersTime may have seen my post last week (Shameless Promotion) where in I touted my wife’s Sunlight Foundation. I wrote about how anyone can designate her organization to receive 0.5% of the cost of all eligible purchases from Amazon (or these contributions could be directed to any of the more than one million organizations participating in this Amazon Smile ‘give back’ program).
A number of you objected to supporting Amazon in any way, writing that this mammoth organization’s business practices among other things contribute to putting independent bookstores out of business, hurt local taxation, and take traffic away from local businesses.
My view was that as long as people are buying from Amazon, why not have some of the cost of those purchases, even though it is a very minor amount, be contributed to local or national charities?
It did not take long for one of my daughters (ERM) to set me straight on Amazon’s Smile Program and this issue. In an email the day I posted Shameless Promotion, she told me to read the first four paragraphs of a post by Lucy Bernholz of Philanthropy Wonk, which I quote here:
I’ve been on a bit of break from my years of pointing out the foibles of #embeddedgiving – or what the industry calls cause marketing. Two things bring it back to my attention:
1. Amazon’s gotten into the game. This is huge because Amazon is, well, Amazonian. Earlier this week the online retailing behemoth announced that it’s AmazonSmile program would let shoppers donate 0.5% of their purchase price to the charities of their choice. That’s nice. But why don’t they just give you the discount, let you donate the money to the charity of your choice, and let you keep the warm glow, credit, and tax break for yourself? By funneling it through Amazon are you making your life easier or are you just letting Amazon take credit for your largess?
Why do you need an intermediary to give away your money? Just about any organization you want to support has a Donate Now button of their own.
When you take Amazon up on its 0.5% donation, guess who gets credit for the donation? Amazon. Credit for your spending your money. Hmmm. And the costs Amazon incurs to run this program? Where do you think they’ll show up and to whom will they be passed on? What an irony – call it a discount, take all the credit, and pass on any additional costs for running the program to customers somewhere else. This is what really happens with embedded giving.
Guess my “I have a deal for you” wasn’t such a deal after all.
Guess it makes more sense to contribute directly to those efforts in which we believe, either by clicking on their contribution buttons or making direct donations.
Chris Boutourline said:
To quote one of my favorite catch phrases, “That’s how they gettcha”
Chris McCleary said:
Bernholz is correct that the ‘credit’ for embedded giving accrues to the intermediary, in this case Amazon; and she is correct that direct, personal giving is far superior (and preferred)… but she is making a mountain out of a mole hill and using slippery logic that could just as easily be applied to program officers at foundations (especially community), donor advisors and donor consortium’s, each: “[put] intermediaries where none are needed, complicates (if not obfuscates) feedback mechanisms, and [are] almost entirely unaccounted for and unaccountable.” And yes, as far as accountability AmazonSmile is particularly egregious, since they aren’t transparent about how much is being collected for which charities (at least yet).
However, the amounts at question with AmazonSmile: .5% (or a nickel for every hundred dollars spent) are trivial and the competition with direct giving is marginal, in my opinion. Perhaps there is empirical evidence to contradict this, but I expect that donors who use embedded giving are/were unlikely to give directly and/or already give/support the organization they channel their embedded giving toward. So, I view embedded giving as simply a pathway to offer to unlikely and potential supporters to take a first step, and start thinking about and supporting an organization. It is not the destination, but a waypoint.
Yes, Bernholz is right to criticize an imperfect system although she does so imperfectly. But, as you point out (and is the case with my own use of embedded giving), I’m already a customer of Amazon’s and am not using them any more or any less as a result nor do I expect many others are altering their vendor choices and shopping habits as a result.
Richard said:
I hope my daughter and Lucy Bernholz read your comments and respond.
:)
Lucy Bernholz said:
To Chris:
I agree with your point on the many layers of less-than-necessary intermediation that exist in the system. Embedded giving is, however, as far as I can tell, the only one that takes credit (both figuratively and literally) away from the actual donor. It’s only a nickel per hundred, sure, but still.
There is really poor data on this whole system. I’ve made many calls for both more reporting and transparency. What Amazon’s doing is the same thing your local grocery store clerk has been asked to do as well – and getting data on whether those nickels ever go anywhere is a tough thing to do. (What a great place on to which to shine some sunlight….)
The research on donor behavior related to embedded giving is minimal and not great. There are some studies that show correlation between “green washing” activities like buying products as good for the earth and then going home and cranking up the heat. The research is limited, but what I’ve been able to find does seem to point to a small “I gave at the office” mentality. What we don’t know is whether there really is a substitution effect (I gave my nickel when I bought my groceries this morning, therefore I’m throwing this direct solicitation letter/email in the trash”) I’m a champion for more research on this.
If giving through shopping actually gets people to give who wouldn’t otherwise, it might be a good thing. But more than 80% of Americans already give, so there’s not much room to grow the pie among the “undonors.” I haven’t seen any research that can conclusively say that embedded giving appeals to those who otherwise don’t give. Which takes us back to the possible substitution effects above.
Funny that you mention donor advised funds. The data on donor advised funds, which shows remarkable growth, could be interpreted as donors seeking less costly intermediation than setting up a foundation/hiring POs/working with Community Foundations. DAF donors pay as little as possible, upfront their charitable tax deduction, and earn interest on their balance. The fees they do pay for their DAFs buy donors a level of anonymity and privacy that other giving vehicles don’t offer anymore. Looked at over time (Since 1991), the rise in national DAFs would seem to point to donors choosing less intermediation than they had been in the past.
Thanks
Lucy
janet brownsister said:
Oh? And would this be the first time Elizabeth has taught us something valuable?
GO BETH!
Chris McCleary said:
Thanks for the reply, Lucy.
Ultimately, I’m conflicted on embedded giving. Personally, I never add a dollar for the cause dujour at my grocery store (or partake in other embedded giving, aside from lately using AmazonSmile to make purchases I would have anyway, just designating Sunlight as the beneficiary) for all the reasons you describe.
But, as a development officer for a nonprofit (the aforementioned Sunlight), we suggested AmazonSmile (predominantly to non-donors) for the reasons I described. We did so in the hopes of enticing those non-donors to consider us, and to offer balance with our specific mention of the CFC campaign and other employee matching programs. But we also wanted and asked for direct giving (which I wholeheartedly agree is the best). We did it as an experiment and as part of an overall effort to better engage and solicit small, new donors. Once (or perhaps IF) we get a quarterly check from Amazon next year, we’ll definitely re-evaluate the program and our participation, but we couldn’t ignore a potential, even if ridiculously small, pathway to revenue. That’s the catch-22 of embedded giving I’m sure; and as Boutourline quoted “That’s how they gettcha”
And I agree, the whole system could use more transparency and investigation.
Richard said:
Chris, etc. – Clearly, the whole on-line giving direction, embedded or not, has become increasingly important, and, I suspect, is just in its infancy. So let’s figure it out.
Another reader took me to task for today’s post, wondering why I hadn’t also ‘attacked’ Ritz Carlton for its Perfect Gift Campaign, where they contribute 10% of a purchaser’s Community Footprints Gift Card, up to $100,000, to Make-a-Wish Foundation.
Thanx to all who have and may comment and especially to all who contribute, embedded or not, to organizations and towards issues in which they believe.