If you happen to’re sitting on a pile of journey or bank card rewards with no quick journey plans, donating them to a charity is a simple option to have a constructive affect. And it is a well-liked option to give: In 2021, Alaska Airways Mileage Plan members donated round 94 million miles to charities at an approximate money worth of $2.6 million, based on the airline.

Past the social advantages, miles donations additionally qualify as exercise in your loyalty account and may forestall the remainder of your rewards from expiring.

However if you happen to’re within the behavior of maximizing factors and miles, you may additionally wish to stretch the worth of your charitable donations so far as potential. And by that measure, some strategies of donating factors and miles fall brief.

The downsides of donating factors and miles

Charity would possibly obtain much less worth to your rewards

Many loyalty packages make it straightforward to redeem your factors and miles for a donation immediately via their rewards portals. However some portals — particularly these from airline and lodge packages — don’t publish the money worth a charity will obtain to your miles or factors. Meaning the charity might obtain much less worth to your donation than you’d suppose, whereas additionally making it onerous to check the worth of a donation with the worth of different choices for redeeming your factors.

Finest Western Rewards is among the few loyalty packages that publishes a money worth for charitable factors donations. The charity will obtain $2 for each 500 factors you donate, for a degree a worth of 0.4 cent every. NerdWallet values Finest Western factors at 0.6 cent apiece, so you’d obtain 33% much less worth to your donation relative to utilizing them for a lodge keep.

You gained’t get a tax deduction

Usually, the Inside Income Service (IRS) doesn’t depend factors and miles as a supply of earnings, so if you happen to donate them, you possibly can’t deduct the money worth of your reward. This lack of favorable tax therapy for the patron mixed with the unsure worth you’ll typically obtain for miles and factors donations ought to have you ever not less than take into account different avenues to your philanthropic endeavors.

Take into account that this downside solely issues for taxpayers who itemize deductions on their earnings tax returns. If you happen to’re like most individuals and take the usual deduction as a substitute of itemizing, you would not have the ability to get a charitable tax deduction from any donation.

You may not meet the donation minimums

Some rewards packages have a minimal donation quantity for choose charities. For instance, you’d should donate not less than 2,000 Southwest Speedy Rewards factors for a donation to the Make-A-Want Basis. That minimal quantity makes it more durable to donate factors that could be gathering mud in your loyalty account.

The best way to make your donation go additional

To maximise the worth of your donation, take into account a charity that books journey immediately together with your miles or factors somewhat than donating immediately via your loyalty program’s portal.

For instance, Miles4Migrants makes use of donated airline miles and bank card factors to immediately e book award journey for refugees and asylum seekers.

“As a substitute of maximizing factors and miles to e book a dream journey, we do it to assist refugees attain secure new beginnings,” stated Patrick Stouffer, partnerships supervisor at Miles4Migrants, in an e mail.

Miles4Migrants has redeemed over 775 million donated miles in pursuit of their mission, with a money worth of over $17 million. That experience permits them to get extra worth out of each donation.

“Our staff has the specialised information essential to stretch the worth of each level or mile, guaranteeing donations go so far as potential,” Stouffer stated. “Even if you happen to aren’t in a position to reap any tax benefits of donating your factors, not less than you’ll know they made the biggest potential affect.”

Use money again as a substitute

Direct money donations assist keep away from the downsides of donating miles and factors. You probably have a bank card that earns money again, or if you happen to earn money rewards via a purchasing portal like TopCashBack or Rakuten, take into account cashing out and donating these rewards as a substitute of your miles and factors.

With a money donation, you’ll know the precise worth a charity will obtain out of your donation and certain qualify for a possible itemized deduction in your taxes. Some rewards packages make this course of easy and clear.

A few of our favourite money again playing cards

Chase Freedom Limitless®

NerdWallet Ranking
Capital One® SavorSM Cash Rewards Credit Card

Capital One Savor Money Rewards Credit score Card

NerdWallet Ranking
Blue Cash Everyday® Card from American Express

Blue Money On a regular basis® Card from American Categorical

NerdWallet Ranking

on American Categorical’ web site

Charges & Charges

Annual charge


• Within the first 12 months, 6.5% money again on journey bought via Chase, 4.5% money again on drugstores and eating places, and three% on all different purchases on as much as $20,000 in spending.

• After that, 5% money again on journey bought via Chase, 3% money again at drugstores and eating places, together with takeout and eligible supply service, and limitless 1.5% money again on all different purchases.

• 8% again on Capital One Leisure purchases.

• 5% money again on inns and rental vehicles booked via Capital One Journey.

• 3% again on eating, eligible streaming providers, grocery shops and leisure.

• 1% money again on all different purchases.

• 3% again* at U.S. supermarkets on as much as $6,000 spent per 12 months.

• 3% again at U.S. gasoline stations on as much as $6,000 spent per 12 months.

• 3% again on U.S. on-line retail purchases on as much as $6,000 spent per 12 months.

• 1% again on different purchases.

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What about making charitable money donations to obtain bonus factors?

Journey rewards packages generally incentivize charitable giving by providing bonus factors to your money donations. For instance, American Airways gives 10 AAdvantage miles for each greenback members contribute to the charity Stand Up To Most cancers.

That further incentive may be a person boon to your charitable donation. Simply bear in mind that any factors or miles you obtain from such promotions will cut back the tax deductibility of your contribution.

American Airways values these bonus miles you obtain via donations at 3 cents every. So if you happen to donate $100 and obtain 1,000 AAdvantage miles, American values these miles at $30. You’ll obtain a tax kind declaring these rewards as $30 in earnings, supplying you with a qualifying tax deduction of $70.

Once you donate money and obtain bonus factors, the charity nonetheless receives your full donation and also you get a slug of factors. When you’ll should pay taxes on these factors, it might probably nonetheless be an enormous win to your future journey plans.

The best way to maximize your rewards



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