When to donate rewards to charity and when to give cash

If you’re looking to give to charity this holiday season but don’t want to dip into your bank account, donating unused credit card rewards, hotel points and airline miles can be a helpful alternative. In some cases the charity can use the rewards for travel needs, and in other cases, the issuer can convert them to cash for the charity.

And nonprofits’ needs are skyrocketing amid the COVID- 19 pandemic. A July 2020 analysis by Candid, a group that provides information about nonprofits, found that more than one- third of them may be forced to shutter as a result of the twin crises of the pandemic and recession.

Here are times it can make sense to donate from your credit card rewards stash and times when it’s not the best idea.

When donating points works well

1. WHEN YOU ( AND THE CHARITY) WILL GET GOOD VALUE FOR THE POINTS » Sometimes point values are diminished if you donate them. Other times, it’s a fair or even superior value.

Citi lets eligible cardholders donate ThankYou points to a handful of charities at a value of 1 cent each. That’s the baseline value you’d want for travel redemption, and it’s a better value than redeeming for cash back.

Those who hold eligible Chase credit cards can redeem their points for statement credits to cover donations to about a dozen charities, again at a rate that’s higher than the pennyperpoint value for cash back.

There are third- party options, too. Miles4Migrants, a charity that uses donated miles to help people affected by disasters, works to get full value for gifted rewards.

“We have a team of expert award bookers search for flights and give that information to the donator, who books the flight directly for the person in need,” marketing manager Cat Cooke said.

2. WHEN THE CHARITY GETS A KICKER »

Discover lets cardholders donate rewards to several charities and contributes an extra $ 25,000 to one that receives the most donations annually.

United Airlines’ Miles on a Mission platform runs periodic campaigns to support nonprofits. The company rolled out a new initiative Dec. 1 with a match limit of 125,000 miles per charity.

3. WHEN YOUR SUPPLY OUTPACES YOUR DEMAND » Points and miles don’t earn interest and can be devalued. If you’re sitting on more points than you’ll use in the next two years, donating them may make sense.

Derrick Dye, an attorney and blogger at Travel- on- Points, earns millions of miles a year and strives to donate 10% of them, even if it’s not for outsize value.