If you have accumulated a substantial amount of travel or credit card rewards but no immediate travel plans, consider donating them to a charity as a simple way to make a positive impact. In 2021, Alaska Airlines Mileage Plan members donated approximately 94 million miles to charities, with an estimated cash value of $2.6 million.
Aside from the social benefits, donating miles can also help keep your loyalty account active and prevent your other rewards from expiring. However, it’s essential to be aware of the potential downsides of donating points and miles:
- Value for Charity: Some loyalty programs do not disclose the cash value that a charity will receive for your donation, making it difficult to assess the true impact of your donation. For example, Best Western Rewards values charitable points donations at 0.4 cents per point, which is lower than the standard point value for hotel stays.
- Tax Deduction: Points and miles donations are generally not tax-deductible, as the IRS does not consider them a source of income. This, combined with the uncertainty of the value received by charities, may prompt you to explore other philanthropic avenues.
- Donation Minimums: Certain rewards programs have minimum donation requirements for specific charities, making it challenging to donate smaller amounts of points that may be sitting idle in your account.
To make your donation go further, consider donating to organizations that specialize in booking travel using miles or points directly. Charities like Miles4Migrants leverage donated miles to facilitate award travel for refugees and asylum seekers, maximizing the value of each donation.
Alternatively, you can opt to make cash donations instead of donating points and miles to avoid the drawbacks associated with rewards donations. Cash donations provide transparency in terms of the value received by charities and may qualify for tax deductions, providing a more straightforward and potentially more impactful giving option.
Some travel rewards programs offer bonus points for cash donations to charities, such as American Airlines’ partnership with Stand Up To Cancer. While these bonus points can enhance your charitable contribution, be mindful that they may affect the tax deductibility of your donation.
In conclusion, whether you choose to donate points, miles, or cash, exploring different avenues for philanthropy and maximizing the impact of your contributions can help you make a meaningful difference in the lives of others.