Points, Miles, and Martinis points to an offer of up to 5000 miles for making a donation to United Way by September 30.

The PMM blog concludes, “It’s nice to see Delta giving out bonus miles for donations to United Way.”

Except… United Way doesn’t appear as a designated charity to donate Skymiles to. So I think we can assume that this isn’t “Delta giving out miles for donations” but rather the charity buying miles from Delta in order to entice contributions.

And actually in this case, the website soliciting the funds and providing the miles in Truist.com, a company which works with charities.

They are soliciting donations and willing to spend money to acquire new donors. That’s not because your donation now is worth so much. Roughly speaking, after this third party’s costs and the cost of miles, there’s probably not much money if any money left for United Way. But United Way gets something of value, that they’re willing to pay for — your name. Because people who give to United way are worth soliciting in the future to give again.

The net present value of a new donor, even one whose first gift costs as much to acquire as their gift itself, is likely positive. Put another way, you’re buying miles and putting your name on a list for future solicitation.

That’s all well and good, but it’s not the most effective way to give to charity.

Mileage Offers are Better WHen They Involve a Charity Which Partners With the Frequent Flyer Program

Redeeming your miles for cash to a charity is usually a bad deal. That’s because the loyalty program doesn’t usually provide much cash per mile. You get more bang for your charitable buck by redeeming points for travel, and using the cash saved to make a donation.

But if a charity that you believe does good work also earns points for your donation, or if you are going to give points directly to that charity, consider that. Charities partnering with loyalty programs will usually do so on reasonably favorable terms, at a minimum.

Donating to a Charity That is Buying Miles is Probably a Waste

If you’re going to be earning points for a donation to a charity with no obvious connection the program then it’s highly likely that the charity is purchasing the miles to rebate to you as a marketing expense. They’re ‘paying to acquire you as a donor.’

The bet is that they may not be making money on the acquisition campaign, they may even be losing money. But they expect to be able to re-solicit the people who give, and a meaningful percentage will give again. It’s the likelihood of future gifts that makes it profitable to buy miles to give to donors as part of a new donor prospecting campaign.

Your small donation is really paying for the organization to market to you in the future rather than funding current relief efforts.

Even if you think you won’t give again, statistically you are reasonably likely to (How well do you know your future self? Perhaps not as well as the charity’s data analysis does). In that case it’s your future charity that’s noble, consider the mileage payment quid pro quo and even a pre-commitment device for the good you will do later. The miles are an enticement for you to pay greater attention to charity.

What’s the Most Effective Way to Give?

If you’re a relatively small fish in charitable giving, consider:

• Giving to one charity is a more efficient use of your money than giving to several. There are fixed costs to process your gifts, including data entry and receipting/acknowledgments but especially followup informational mailings to you and subsequent donation requests. Each organization you give to multiplies out those costs. Giving to just one charity means the fixed costs are contained, with more marginal dollars spent on the purpose you care about.

• You should probably give more than you do. Pick a percentage of your income and stick to it. Tell other people about it, and the specific cause that you’re supporting, as a commitment mechanism.

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