Companies typically win accolades and favorable publicity when they donate to a charitable cause, especially if they chip in $1 million. But Amazon got burned in the media when it donated a million Australian dollars ($690,000 in US dollars) to Australian wildfire relief.
Media commentators pointed out the disparity between the donation and the wealth of the company and Amazon CEO Jeff Bezos. Business Insider put Bezos’ annual earnings at $78.5 billion, based on the difference between his 2017 and 2018 net worths as provided by the Forbes 400 list. Based on that, the publication said he “earns” the $690,000 in less than five minutes, a figure other media outlets widely repeated.
Those calculations are questionable at best, as net worth is not the same as income and much of Bezos’s wealth is linked to the company’s stock, which fluctuates over time.
“But, the problem isn’t just that Amazon is making a contribution, the problem is the optics,” writes Inc. columnist Jason Aten. Companies earn favorable media mentions and goodwill by donating to charitable causes. As the Amazon case illustrates, that’s not necessarily the case now. PR will need to take the reputation of the organization and top executives into account, along with the current media landscape.
Amazon is also contributing to wildlife relief in other ways. It’s donating products to relief organizations, including water, food, safety clothing and building materials. Amazon Web Service is providing technical support to government agencies providing emergency services and recovery aide. The company is also asking customers buy items requested by BlazeAide to ship directly to relief zones.
The donation was a legitimate contribution, and Australia is relatively small market for Amazon. However, Twitter users called Bezos cheap, as well as more harsh words, even though it was a corporate contribution. Celebrities with far less money donated more, they pointed out. Heavy metal band Metallica, worth an estimated $68.5 million, pledged $750,000. Reality TV star Kyle Jenner donated $1million. Facebook said it will donate up to 1.25 million in Australian dollars. Amazon may have been trying to roughly match what celebrities and other corporations pledged.
Why the Angry Backlash to Amazon’s Donation?
Social media users, not known for their research abilities, likely focused on the 690,000 figure, not the 1 million in Australian dollars.
The shaky image of Amazon and Bezos likely helped ignite criticism. The company has faced controversy for paying little or no taxes and poor treatment of its workers. Bezos takes public criticism for his progressive political positions and ownership of The Washington Post.
Some commentators asserted Bezos has a record of stingy donations. He donated $67 million between 2000 and 2017, plus another $131 million in 2018, according to Vox. In total, that added up 0.12 percent of his net worth – a small percentage but similar to most other billionaires.
The discrepancy between the donation and Bezos’s and Amazon’s wealth prompted the most negative PR. “If you’re trying to generate goodwill by supporting a cause, people expect that you’ll support it in proportion to your ability and resources,” Aten writes. “Or at least in a way that looks like you actually care about what they care about.”
Amazon could have donated $1 for every product it sold in a given day, Aten suggests. Since it generates about $8,500 of revenue every second, even if it sold 25 million products in a day, the amount would represent a quarter of one percent of its total profit.
The company could also have avoided criticism by doing nothing.
In making charitable donations, now, companies must be aware that size of donation may create public perceptions that aren’t always positive. “Too small” in the public’s opinion can create negative reactions, often from a vocal and possibly biased minority. Nonetheless, such public backlash to a charitable donation can tarnish a corporate reputation instead of enhancing it.
That risk, however, should not dissuade companies from making donations to charitable causes, especially in this era of growing recognition of companies’ responsibility to the greater good, not just shareholders. Thoughtful and well-intentioned donations by business create benefits for everyone.
Bottom Line: Corporations traditionally win positive PR and goodwill by donating to charitable causes. The negative reaction to Amazon’s donation to Australian wildfire relief shows that’s no longer a guaranteed strategy – but such public reactions should not dissuade companies from making well-conceived donations to worthwhile charitable causes.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.
