Looking for a way to support a cause you care about without tightening your purse strings this holiday season?
Consider donating airline miles or credit card rewards you’ve already earned. Many airlines and credit card companies offer this capability, which costs the consumer nothing and allows them to choose the charity they’d like to support.
David Alpern, an online marketing consultant in Long Beach, Ca., has donated airline miles several times to keep his miles from expiring (having activity on the account keeps those miles active, even if you aren’t flying). “Rather than have the miles disappear, it helps the charity and helps keep my account alive,” he says. “My United Airlines account had alerted me that my miles would expire at the end of October, so I went through the different charities that are pre-selected by the airline on the website and chose the one that I wanted to support.”
After reviewing his options, Alpern chose hunger-relief organization Feeding America. “It helps the charity and helps keep my account alive,” he adds. “You can set it up where you give all of your miles or you give a reoccurring amount of miles.”
A few things to keep in mind:
- You probably won’t be able to take a tax deduction on donated miles or credit card rewards the way you would when sending a donation check because miles have no cash value unless you’ve actually purchased them (which some frequent flyers do to maintain their elite status). However, if you aren’t planning to itemize on your tax return, you wouldn’t be eligible for the charitable deduction anyway. As the government copes with its own budget deficit, stay tuned for a possible deduction or elimination of the charitable tax deduction in the future.
- You may be limited to a preselected menu of charities to support. If you’re not thrilled with the options, another way to donate credit card rewards is to redeem your rewards for a gift card and donate the gift card to a charity auction (for instance, many schools and other organizations host live or silent auctions this time of year to raise money to keep their programs going). Gift cards in larger denominations are likelier to get attention at auctions so give a large amount if you can. Some charities also accept a direct donation of a gift card to purchase supplies.
- Point values vary depending on your rewards program, so do the math before you select the donation option. If, for instance, 12,500 points could be redeemed for a $100 gift card or a $80 charitable donation, you could make a bigger impact by choosing a gift card from a retailer where you’d shop anyway and donating $100 out of pocket (or donating the gift card instead).