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Donate Reward Points to Help Charities Go the Distance

Sitting on piles of miles about to expire? Put your rewards to work for deserving causes.

Helping military families get hotel rooms. Turning miles into meals. Flying refugees to safety.

These are just a few examples of the tangible good you can create in the world by using travel rewards points. And chances are you may have more than usual, given your proximity to home over the past year or so.

We’re talking about the credits you’ve accumulated through booking flights, hotel rooms and plain old credit card spending. It has real value – and that means it can help make a real difference for those in need. But it’s different from donating cash, especially when it comes to tax treatment. We’ve gathered details from the fine print to help guide your giving decision.

Streamlined generosity

Donations can keep points from expiring. The majority of hotel and airline companies put an expiration date on rewards, but there’s a loophole. The "activity” of donating points can extend the amount of time you have to use them. Also, if you have more than you can possibly use up in a couple of years of traveling, giving them away might be the right move – companies can lower the point value at any time, and some did during the pandemic. Devaluations are “inevitable” now that travel is opening back up, according to thepointsguy.com.

$100 billion: Estimated value of unclaimed loyalty points, according to a 2017 analysis by Bond Brand Loyalty.

Matching programs can multiply your gift. Keep an eye out for special donation-matching offers, especially around Giving Tuesday (set for Nov. 30 this year). Last year, United Airlines matched all miles donated at a 1:1 ratio, and American Express offered to match reward points gifts to Feeding America at a 10:1 ratio. The La Quinta hotel chain has also been known to match rewards given to the Fisher House Hotels for Heroes program, which provides a place to stay for the families of hospitalized veterans.

Specialized charities can help stretch a mile. Nonprofits such as Miles4Migrants, which uses donated airline miles to help people impacted by war or disaster, have honed the art of getting fair value out of gifted rewards. “We have a team of expert award bookers search for flights and give that information to the donor, who books the flight directly for the person in need,” its marketing manager Cat Cooke told NerdWallet.

Gifting turbulence

Some points can lose luster in transit to charities. For example, a recent MarketWatch analysis shows that Hilton Honors points donated through its site lose more than a third of their value. That’s why some choose to use their travel rewards and make an equivalent cash donation to a charity.

You can’t expect a tax write-off. In the eyes of the IRS, your donated miles and travel points are a gift from the corporation to the recipient – not from you. That means this type of donation is not considered tax-deductible.

Mind the minimum. The rewards programs usually require you to donate in set increments, which can be a pain if you’re below the threshold.

Despite some minor drawbacks, donating your travel points can be rewarding. If you have some collecting dust, consider dispatching them out into the world to help someone else along their journey.

Sources: NerdWallet; MarketWatch; thepointsguy.com; CNBC; Ad Age

Raymond James does not provide tax services. Please discuss these matters with the appropriate professional. Raymond James is not affiliated with the above-mentioned organizations.

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