Amazon on Foundation’s Edge

By Nick Slepko - April 25, 2012 | Tickers: AMZN, AAPL | 0 Comments

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In “Part 1: Behind the Smile in Seattle - Amazon a virtual no-show in hometown philanthropy” of the Seattle Times series, the paper fails to appreciate that the greatest good Amazon (NASDAQ: AMZN) could be doing in the world of philanthropy is emphasizing individual giving over corporate giving.

Even voluntary corporate committees eat up precious time (not to mention have their decisions watered down with politics and other less-than-optimal factors), and Amazon believes that its high-paid employees’ time is valuable. Moreover, there is an understanding that certain activities that individuals would like to give to could be unnecessary headaches for Amazon (such as giving to Planned Parenthood, the National Rifle Association, or any religious organization). So, in the interest of time, money, and donor intent, Amazon believes that employees and shareholders can decide most efficiently the best use of their salaries and profits (which are theoretically higher because revenues are not used for activities unrelated to the company’s core pursuits). It should also be comforting that not every vice president pulling down six figures donates a measly $369 a year.

As for volunteering, maybe ’Zoners are simply too tired after their infamous 36-bajillion hour work day. However, Amazon did little to dispel this notion when asked repeatedly for information by the Seattle Times. Still, the crux of the newspaper's reporting rested on anecdotal stories from local charities that thought Amazon was not visible enough at meetings (nor showed up for awards or dinners that locals organized in honor of the company – which were surely devoid of any ulterior motives...)

The article spends most of its ink lamenting that, “you won’t find the company’s name on the rosters of major donors to such venerable local nonprofits as the Alliance for Education, Seattle Art Museum and United Way.” However, you do find the Bezos Family Foundation listed as an Alliance for Education donor – and MOHAI is just as venerable as the SAM. Of course, the company might have avoided some misunderstandings had Amazon PR done its job and responded to the local paper’s request for some basic information – which ultimately did list Alliance for Education as an Amazon recipient.

(Incidentally, the Seattle Times’ public shaming does coincide with Amazon placing on their homepage a link “Amazon in the Community” listing their beneficiaries. This link is right under the more substantive link “Amazon and Our Planet” which has been there since September 2009 when it replaced the words "Corporate Responsibility" on the home page two months earlier -- "Investor Relations" received prime real estate in 2003.)

Yet with unabashed elitist zeal, the Seattle Times goes on and lists others lacking Amazonian largesse like the local symphony and environmental organizations – they even fret that Bezos and other executives fail to show up to cut ribbons. One interviewee was also concerned that Amazon employees (unlike other corporate participants) had covered their own costs to take part in her civic leadership training program – which is odd because if anything shows greater commitment and ambition it is paying one’s own way. However, the detractors in the article seem more distraught that they were not getting the hugs and handouts to which they felt entitled.

The Seattle Times continued to show its bias (and ignorance) by questioning Amazon’s corporate and community activities with insights like, “critics note that Amazon's support of writers groups coincides with the growth of its publishing business,” and going on to decry the small amounts it gives – even though last checked being a writer involved a brain, a piece of paper, and some ink, and now with Amazon’s self-publishing option a manuscript can be ready for the whole world in a matter days for essentially no upfront costs.

Moreover, the article fails to appreciate that historically most successful corporate philanthropy is tied not only to marketing objectives, but builds on the strengths of the company’s core competencies. The Seattle Times further undermines its crusade by inadvertently making it sound like corporate giving may be the sign of a company such as Apple (NASDAQ: AAPL) losing its sense of real value when it quotes an editor from the Chronicle of Philanthropy saying, “It's not just that Steve Jobs didn't publicly give away money. But also, some of the comments he made suggested he was skeptical of philanthropy. He saw Apple's products as improving society and making a difference. And it's only now (that Jobs is gone) that Apple is offering matching grants.”

Yet sadly when presented with the fact that “within days of the Sept. 11 attacks, Amazon set aside space on its homepage for customers to make Red Cross Donations...[resulting in] more than $35 million to global relief programs,” the Chronicle editor goes on to say, “That's helpful, but it's not the same thing as a company making lots of grants.”

Also not the same thing as making a lot of grants is business – and not social business – but old-fashioned capitalism as one ’Zoner explained to the Motley Fool:

We are going to pass on economies of scale all over the place in terms of pricing, and when you think about our selling model and that we allow anyone after they’ve been vetted to offer goods and services, it’s amazing…in the Seattle area alone there are thousands of small businesses that are thriving because of Amazon’s customers and the access we give them. We are putting people to work with every order that we fulfill on behalf of a third party.

We are always adding more value and more selection for the customers, but at the same time we also bend over backwards to make sure our sellers are making money, that they have control over their own businesses, and that we are acting in a fair way between the buyers and the sellers. The model works. From 2009 when we had 700,000 sellers on the platform we’ve tripled that. We are helping people make money, and in this economy that is one of the most important things in the world we are doing now because we are helping people pay their bills.

One guy we work with sells physical media – and CDs are a really tough business right now. Before he came to us, he was going to have to lay off most of his 50 employees. It feels good helping people put food on their table and helping them save their businesses.

Reaffirming the role business plays in society is great. It would also be great if instead of responding meagerly to public shamings and shakedowns, Amazon would highlight what the individual shareholders and individual employees are doing without all the restrictions of corporate-driven giving (and its differently-abled step-child corporate social responsibility).

Next: "Who is Jeff Bezos?"
Previous: Amazon's Prelude to Foundation

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