Friday, March 13, 2009

Lent '09 - Day 15: Corporate Charity

Slate magazine recently published an article about Amazon's lack of charity called The New Scrooge. The gist of the article is that despite doing very well in the current economic situation, Amazon does very little in terms of charitable donations, whether in Seattle or beyond. For example, you won't see Amazon's name on the donor wall at Benaroya Hall or as a Habitat for Humanity supporter. Amazon's own Giving at Amazon page is not exactly inspiring. Questions arise about does this matter? Should Amazon be giving shareholder's money away? I think no.

I think no for a few reasons:
  1. It's not one of Amazon's core competencies. Giving, especially large sums of money takes work. You have to understand who you're giving to, what they're going to do with it, and what your return on investment is going to be. There's no doubt that the right people could be hired and training could be undergone to make this so, but that is currently not the case.
  2. I don't know if I'd agree with how they give their profits away. For example, supporting Benaroya Hall and the Seattle Symphony is nice, but I wouldn't call it a noble cause. It's those with at least some means who can go to such events. I would assume that charitable donations just lower the bar to entry, but they're not doing anything drastic like enabling the destitute to have a night listening to pristine classical music.
  3. It's hard to see how this is in the customer's best interest. Corporate giving is definitely in the best interest of the recipients, but these recipients are not necessarily the customers. Amazon prides itself on starting with the customer and working backwards. Would customers rather you give X million dollars of profit away, or use that X million dollars to lower prices?
  4. Giving away X% of company profits is not a stated company value. As a result, investors did not sign up for this to occur. I would assume most are investing in Amazon with the hope/expectation that Amazon will maximize their return. This unspoken agreement between company and investor should be honored. If a party wants to change the agreement (e.g. give more money away), then the other party should be given ample time to adjust (e.g. pull out their money if they don't agree).
While not possible or practical, I wish Amazon had a giving posture. It would be a source of pride, that not only can my employer get you millions of items at amazing prices incredibly quickly, but they see themselves as blessed, have a generous outlook, and care for those in need. It would be awesome to see Amazon rally behind a noble cause like Kiva as many other companies have done.

But these are the problems you face when you're a big company and it's not your company. It's like how I wish our team could use Google Apps for some of our collaborating. As a big company, we can't be storing proprietary information on Google's servers, even if it makes our jobs easier. But if you own your company and you're a small fish, you can do such things. You can state in your charter that at every annual meeting we distribute X% of the profits to our employees so that they can give it away. Doesn't that sound awesome? Wouldn't you want to work for such an organization?

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