How Bezos Could Turn Amazon Prime Day into his own Giving Tuesday

Amazon Prime Day is typically a day that makes everyone smile, and I mean that literally — the most popular item sold on Prime Day in 2020 was Crest 3D Whitestrips. But this year, no one is smiling more than Amazon CEO Jeff Bezos, whose wealth has increased by nearly $90 billion during the pandemic and who is poised to gain even more during the 48-hour online shopping bonanza known as Prime Day.

Watching billionaires rake in money during an ongoing global pandemic has left a sour taste in the mouth of many Americans. However, the PR machine has been quick to point to the supposedly “generous” giving of our beneficent billionaire boys. Jeff Bezos gave away $1 billion, which sounds like a lot — until you remember that he brought in nearly $90 billion last year alone.

Bezos isn’t unusual among the ultra-wealthy, most of whose already-massive assets only grew during the pandemic, and whose charitable giving as a percentage of overall wealth is comparably puny, even when put up against that of regular, non-billionaire Americans. It’s a particularly embarrassingly low number when compared to Bezos’s ex-wife MacKenzie Scott, who made waves with her recent gift of $2.7 billion to 286 lucky nonprofits and advocacy organizations after giving away $6 billion last year.

On average, American households donate 3–5% of their income to charities each year, with the lowest-income households donating the greatest percentage. On Giving Tuesday alone in 2020, Americans collectively gave $2.5 billion to charities. Bezos, meanwhile, gave a miserly 0.5% of his wealth last year. So here’s our humble suggestion: Not unlike retailers who offer buy-one-give-one, Bezos could give one dollar to charity for every dollar spent on Prime Day. The $10 billion charitable donation would be a good down-payment– 5% of his net worth– for charitable giving at a level commensurate with his wealth. A Giving Tuesday for the richest man in America!

It’s true that Amazon already has something called AmazonSmile, which will contribute 0.5% of each dollar purchased of a qualified product. But this is paid for by the corporation, not by Bezos, who owns 10% of the stock. And even if every purchase on Amazon Prime Day qualified, the total donation would be just $500 million. If you buy that $50 teeth whitener you get to donate 25 cents to your favorite charity. The only one smiling on that deal is Amazon.

Rich people like Bezos (and Buffett and Gates and Zuckerberg and….) have perfected the art of gaming the tax system. And this is true even for the charitable deduction, which is a taxpayer-funded program to encourage charitable giving to nonprofits. Unfortunately, it is typical when a wealthy donor makes a large charitable contribution, the nonprofits never see much of the money. Instead it gets socked away in a donor-advised fund, or a private foundation. The rich get a charitable deduction, worth as much as 74 cents on the dollar, and their money and power continues to grow in one of these charitable intermediaries tax-free.

Bezos’ matching gift should defy the norm of hoarding charitable dollars and follow his ex-wife’s approach: get the money out the door to the people who need it. But since he may too busy selecting his space-mate and may not have time for philanthropic consultants, the easy solution is to divide the $10 billion among the approximately 150 accredited community foundations to distribute this year–about $60 million each. Not unlike Amazon in the commercial arena, community foundations have the distribution network for the local charitable sector. They have the local expertise and together cover most of the charitable sectors, especially with regard to addressing the aftermath of the Covid crisis.

It is imperative that those who have hoarded wealth, largely by avoiding taxes, voluntarily make the public investments needed for a healthy and thriving country. And no one is more capable of doing so, and setting an example for others, than Jeff Bezos.

Of course, there is a danger that Bezos’ game-changing gift we’re suggesting could generate such great publicity and goodwill that it would further whitewash the role of excessive wealth in our society. However, until politicians step up to the plate and tax the rich, increased investment by community foundations in local nonprofits is something that should make everyone smile.

Alan S. Davis is the founder of The Crisis Charitable Commitment, a campaign to greatly increase the flow of charitable dollars to nonprofits and create a new Charitable Standard: a minimum level of charitable contributions, as a percentage of assets, for America’s wealthiest individuals and foundations.