Amazon is shutting down an in-house charity that gave customers the opportunity to direct a small amount of their purchases to a wide range of nonprofits, from large hospitals to modest horse farms, saying the impact “was often spread too thin.”
The move was announced on the company’s blog on Wednesday. It comes as Amazon undertakes 18,000 layoffs — the largest retrenchment in its history — but a company spokesman said the decision was not a cost-cutting measure.
Amazon introduced AmazonSmile a decade ago, as it sought to expand its then-middling Prime membership business, enabling customers to designate 0.5 percent of the price of eligible purchases to the charity of their choice. There was no additional cost for customers to donate.
The open policy inspired more than a million charities to sign up, including some anti-vaccine groups and organizations Amazon later removed from its registry after the Southern Poverty Law Center described them as militias or hate groups.
Amazon’s decision to remove certain charities from the program drew the ire of prominent Republicans, who accused the company and its founder, Jeff Bezos, who was Amazon’s chief executive at the time, of discriminating against conservative groups and indulging in what they described as “woke activism.”
Since 2013, AmazonSmile has distributed about half a billion dollars in donations, the company said.
For some organizations, AmazonSmile donations represented significant support. St. Jude Children’s Research Hospital, for instance, said in November that it had received $15 million in donations over the lifetime of the program.
But the average annual AmazonSmile donation was far less: about $230 per charity, according to a company spokesman, Patrick Malone. After discontinuing the program, Amazon will instead refocus on bigger investments in areas such as affordable housing, computer science education and disaster relief, the company said in the blog post announcing the decision.
“We are always looking at ways to increase our impact,” he said, adding that with so many beneficiaries, the company’s “ability to have an impact was often spread too thin.”
Mr. Malone said that “many of the people” who had worked on the AmazonSmile program were among the company employees who were being laid off.
The absence of quarterly checks from Amazon could have a negative impact on small nonprofits like Kitty Angels, a no-kill cat shelter in Tyngsborough, Mass.
In the three-month period that ended on Sept. 30, Kitty Angels, Inc. received $956.23 from Amazon customer sales, according to an email from AmazonSmile to one customer and shelter supporter, Stan Foster.
Kitty Angels has received more than $17,000 in donations overall from the Amazon charity, the email said.
“As you can see this will be quite a financial blow for this charity, which is all run with volunteers,” Mr. Foster said.
While Amazon’s decision to shutter AmazonSmile was unlikely to curtail his use of the shopping service, Mr. Foster said his opinion of the company had soured a bit.
“I appreciate that Amazon has done this for several years, but going on a rocket ride is expensive and companies need to prioritize,” he said, making a joke about Mr. Bezos’ brief trip to space in 2021 in a spacecraft built by his rocket company, Blue Origin.
Amazon’s Prime membership service, which provides discounted and expedited delivery among other benefits for an annual fee, greatly expanded during the lifetime of AmazonSmile, and some analysts say that the service may have gotten a boost from the charity program’s popularity.
Many people became familiar with Prime after their houses of worship, clubs or other local organizations promoted AmazonSmile in bulletins and newsletters as a vehicle for donations.
“It was incredibly clever and incredibly effective in bringing in new customers,” said Josh Lowitz, whose Chicago-based consultancy, Consumer Intelligence Research Partners, estimates that Amazon Prime membership rose to about 168 million this year from about 17 million in 2013.
“All of a sudden, every little church or synagogue or P.T.A. or figure-skating club said, ‘Hey, if you sign up at smile.amazon.com and tell them you want your donations to go to the neighborhood garden club, we’ll get a half a percentage of what you spend,’” Mr. Lowitz said. “They ended up making all these grass-roots charities into a referral source.”
That arrangement was good for Amazon Prime. But some of Amazon’s Republican critics, including Representative Matt Gaetz of Florida, assailed the company for relying on the Southern Poverty Law Center to help it weed out some beneficiaries, saying that conservative and Christian groups had been excluded.
Testifying as part of a congressional antitrust investigation of large tech companies in 2020, Mr. Bezos defended the program while acknowledging that the vetting system was “imperfect.”