Should You Donate Frequent Flyer Miles To Charity?

It’s been several years since I’ve shared thoughts on effective philanthropy and donating miles. It certainly seems like we have more crises, more often, and more needs top of mind for help than ever before. I suspect that might not be correct in absolute terms, but the breadth of speed of information flow brings needs to the forefront constantly. And for many people, especially readers of this blog, miles may be an underexploited resource to help.

What Do You Want To Get From Your Philanthropy?

First I think it helps to be clear about your goal in giving. Often people make donations not because they want to do the most good at the margin but to,

  • feel good
  • tell themselves they’re doing good
  • get recognition (from the charity or from peers)
  • signal agreement with the cause you’re donating to

I do have thoughts and suggestions for those seeking out these other goals, but the advice in this post assumes you are trying to do the most good or at least get the most resources to the charity.

Should You Give Miles Or Cash?

There are usually two ways that miles can help a charity. In one version, they access your account (or a travel provider allows them to receive actual donations of miles into an account for their use) and the miles are used to book travel, with the usual restrictions applying. That can be useful for savvy charities, or for charities used to doing award bookings. But it can also just wind up meaning a lot of low value redemptions.

More common is donating miles and the loyalty program turns them into a cash donation. That’s a lot simpler, but the rate of cash conversion matters. Since the program is spending real money, the conversion rate is low – certainly lower than most readers of this site would ever accept when spending their miles for travel.

As a result most of the time you can get better leverage out of your miles than the charity can.

  • Use your miles for your own travel
  • Give the money you would have spent on that travel to charity instead

That way the charity is going to net more than if you cashed in your miles for a donation.

Let’s take this a step further. If you itemize your tax deductions, this approach is even more valuable. Your cash donations are (generally) deductible to a qualified non-profit, while mileage donations usually aren’t. And you can give more for the same net out of pocket.

Leaving aside those who have hit their cap on charitable deductions or who face the Alternative Minimum Tax, you can gross up your donation when it’s tax deductible to account for the tax savings.

Let’s say you’re in the 32% marginal tax bracket, and you’ve used to your miles to save $250 in after-tax money. Why not donate $368 to charity?

There are issues that can change the calculation, of course, besides your tax situation. For instance,

  • You need paid travel for elite status (most hotels though count award nights towards status, and some airlines do too – Delta through the end of next year and Virgin permanently on their own metal)

  • You might get bonused with additional miles for donating cash to an airline’s preferred charity, further tipping the scale (also giving you more miles to again consider whether to keep or donate)

For some though giving miles may just be easier than giving cash for those miles rich and cash poor – and not spending cash on travel.

Giving Points Can Be A Bad Deal

When you donate points it’s helpful to know how much (or how little) a charity will actually receive for those points.

In some cases points donations may even save the loyalty program money. With low per point values when redeeming for a charitable donation, it may cost the program less to redeem for the charitable gift than to redeem for travel. A decade ago I embarrassed Hilton into making a six figure donation after pointing out the miniscule amount given to charity for Honors points donations at the time.

When you’re donating to a travel provider’s preferred charity, you probably want to know whether your donation will actually increase the total amount that’s given. The company may make a flat donation regardless of how much members give, the more members give the less of a ‘top off’ that’s needed.

That’s one reason I like United’s platform for charities to raise their own support, which I last highlighted when there was a campaign running for Give-a-Mile. Another group I’ve written about is Miles4Migrants.

How Can You Be Most Effective In Your Giving?

Most of us see a cause, send some money, feel good about it – and call it done. But what if we actually want to believe that the organization we’re helping is making a difference, and our gift specifically matters? Here are a few ideas.

  1. Focus your giving. A lot of small gifts won’t be as helpful. Plus the re-solicitation cost by charities is high. When you make a small gift you’re really just telling most charities “spend money to get me to give again (and again).” Many charities will spend as much or more than you give them trying to get your renewal, which is profitable overall because of the percentage that do renew and upgrade their support. Bigger gifts see less eaten away by re-solicitation expense.

  2. 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.

  3. Giving appreciated assets is better than cash. If you have appreciated stock, give that instead, you get the tax deduction for the current value of the shares and get to avoid paying capital gains taxes on their appreciated value. That’s true for nearly all assets that have grown in value. And that means you’re better able to afford to give more.

  4. Give to a cause that engages you, and a charity that continues to engage you, because the most good will likely be done through your lifetime giving than a one off. It’s not the $100 that necessarily makes a difference, but the $100 multiplied out across years and perhaps when you consider leaving a portion of your estate (one of the ways that lower dollar solicitation programs pay out for charities over time, frequent donors may then remember the charity in their will).

  5. Traditional metrics of efficiency are used wrong. Unless most money is being spent on overhead don’t directly compare overhead metrics – many charities game these anyway (what is a fundraising vs program cost is easy to play with) and deficits aren’t always signs of financial irresponsibility. Bonus points for putting their tax returns on their website?

    Maybe… but those are all publicly available online eg at Guidestar anyway. Deficits, transparency scores, are overhead percentages are used because they’re easier than actually figuring out whether an organization makes a difference or not, and it’s tough for small donors to invest enough in learning that for themselves.

  6. Pick unpopular causes, they are probably getting insufficient investment versus following the crowd. Causes everyone else is giving to probably have too much relative to other causes, and relative to their marginal opportunities to make a difference.

  7. Pick a person, not a cause. This isn’t a popular way to do philanthropy, and it won’t get you a tax deduction. But if you’re a traveler, and you don’t have big money to materially affect the direction of a charitable institution, perhaps you can achieve something of scale – with an individual you met along the way? A few hundred dollars may not matter to a mega-charity (though they won’t admit it) but it could help your tour guide in Africa or South Asia to fix the vehicle they use to earn a living, or maybe it would help them send their daughter to school?

If you are very wealthy some of these thoughts don’t apply. You don’t need to focus your giving to make a difference, for instance, because you can make several large gifts and take more of a portfolio approach (hoping that there are enough successes to balance out the failures).

And if you’re going to come back to donating miles, maybe you could donate a little of your expertise using those miles as well?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Using US airline program miles to donate via US airlines-selected charity options is something I always avoid doing unless it’s part and parcel of a token donation of miles for avoiding mileage expiration.

    I like the idea to use my miles for trips that I would take anyway and direct money saved to organizations or individuals whom I consider to be effective for the purpose of interest.

  2. Gary, you said you’ve written about Miles4Migrants, but it’s not linked and my search can’t find it. They’ve been in the news a bit lately with what’s happening in Afghanistan, and I was wondering if their model was a good one. Can you expand a bit on your thoughts about them?

  3. Not in a million years
    Id rather let them expire
    All the big charities are bloated corrupt organizations where the ceo’s make 6 figures and more
    Never!!

  4. I like your idea which GUWonder repeats. In giving miles I suspect the organization may not be getting great value from them in using them – their transportation needs probably don’t generally coincide with hitting sweet spots on award charts – or in cashing them in. On the other hand, if the charity is knowledgeable about mileage use, and their mission is at least in part specifically directed to moving people about, such resettling refugees, I could see how miles could help, since these are usually one-way international flights, frequently a better deal with miles than cash.

    It’s complicated, and I appreciate the thoughtful ideas.

  5. When I was younger I’d donate no questions asked. Now that I’m older and seeing how much money the airlines got from the government and learning more about CEOs and charities etc, I’m more skeptical. Do airlines themselves donate seats to those in need during a disaster/emergency? It would be great PR for the airlines helping those in need by filling up seats that would have gone empty.

  6. Absolutely not. In the first place, we don’t know who the charity money goes to. I don’t want to help groups that hate me, don’t want my people having freedom, hate those who practice traditional family values, and contribute nothing but problems to the world. If I give, I rather give to a specific political oriented cause or specific person.

    In the second place, large scale charity doesn’t help. A trillion has been donated to fight cancer and it has produced zero results. That’s because only targeted research will find treatments. Trillions of dollars of pharmaceutical companies already are in finding cures. Throwing money at things doesn’t address the underlying cause. It’s this way with a trillion spent on the war on drugs and a trillion spent on Johnson’s poverty programs. The same with spending a trillion on schools when money can’t change genetics (IQ).

    Charity can be harmful in that it creates an artificial stimulus. Instead of people being responsible and having one or two kids they can take care of properly, they then are incentivized to have 4-5 kids who will terrorize communities. We see kids in Africa with NBA and Disney Shirts. What we don’t see is that the textile industry has declined in Africa by 50% in 40 years. It doesn’t help to take jobs away. The same thing with missionaries and volunteers. Westerners doing menial jobs like fixing a home take away jobs from locals.

  7. There is an educational charity very dear to me and my wife; in fact, we met through it. It has large travel expenses and is always scrapping for cash. I have written the top guy several times and offered to give miles/points and coordinate donations from others (there are thousands of alumni who must have many millions of points/miles) and even handle the booking/online work.

    Crickets.

  8. My ex donated all his united miles after we broke up to charity since I had the passwords to the account, he just never knew he donated them . this was 10+ yrs ago and it was a civil seperation he wanted to cheat on me and we were not married so no lawyers divided assets. Ronald McDonald house was thankful for them

  9. I donate my miles from accounts that I no longer have any use for. What exactly would I do with 635 AAdvantage miles other than donate them? Now that I can credit any flights I have to take on AA to Mileage Plan, there certainly won’t ever be enough to use for a flight.

  10. I donated my Krisflyer Miles to their charity because they’d expire.
    Didn’t want to waste them.

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