Donating flight instead miles or dollars?
 

I'm considering to support a small recently-started US charity that operates in Asia.

They have US person working overseas that has to come back to the US occasionally. I was wondering whether it may make sense to book her a flight with my miles rather than just donating miles or other assets. This is just a thought right now. Maybe too much trouble.

Does anyone have experience with this? Why is it a bad or good idea?

Charities of all sizes use miles all the time - so if they are happy to use the miles I don't see an issue. But ask, they may prefer buying a ticket outright.

You may wish to provide proof to the traveler that you have donated the miles. I am also fairly sure you don't get a tax deduction.

If the new charity is not a part of the UA program then you would have to act directly. But why would you want to be in the middle of this if there is an option to give the miles to the charity?

The only way the donation of miles could be a tax deduction is if you declare and pay income tax on the value of your airline miles in the first place. And I kinda doubt that anyone does that.

The donation of miles is dicey from a tax-deduction perspective. You'd effectively be trying to make the argument that you bought the miles as part of product bundles with airline tickets or other products. Not sure I'd want to wade into that who mental/legal exercise with the IRS. For all I know, somebody's already done it and lost.

However, it would seem to me that if you donate an entire airline trip directly to a charity, you could more easily document the fair market value of the trip. Still a gray area...I haven't done it myself...but at least the documentation and explanation side of things is more straightforward.

I see people donating hotel rooms to local silent auctions all the time: from the fine print on the items, I can usually tell what the underlying certificate is. A Marriott Megabonus certificate, a credit card annual free night award, etc. Usually there's a FMV listed on the certificate (sometimes realistic, sometimes inflated), so the donor is likely writing that off on his/her taxes.

(IANAL. Or an Accountant...)

Can you actually write off the "fair market value" though? Surely you'd have to write off what you actually paid for it, so in the case of the hotel rooms absolutely nothing, and for the flights just the taxes?

(I'm no expert either and this just seems like the common sense way to do it to me - which probably means it's wrong!)

FWIW, I'm not concerned about the tax write-off.

If you donate miles and it's not a charity that partners with your airline, you would pay transfer fees which often are more than the value of the miles.

OTOH, if doing the booking is complicated or the person wants to make a bunch of changes, then it could require a lot of your time--unless the miles are in an orphan account and you're willing to give the charity (temporary) control of the account (and even so, they might not be very good at using those miles).

Totally not an expert myself, but I've never had to establish a cost basis for items I've donated to charity - just the FMV. When I see people donating hotel rooms to silent auctions, I'm nearly 100% sure it's because they are writing them off on their taxes. There is an FMV listed on the bid sheet. When a donor gives something to an auction that they aren't writing off on their taxes, you usually see something cute like "Priceless" written as the FMV.

Of course, I usually do *not* see flights donated to these auctions, perhaps because of what MSPeconomist is getting at: it could end up being more hassle for the donor and recipient to get the trip booked. Much moreso than getting, say, your typical Marriott Category 4 booked.

If I was ever to do this, it'd be with a small local charity that I knew well and cared about enough to take the time to help them book a good trip for the miles. I'd probably book directly out of my account and give them a letter stating that I'd donated the trip in case they ran into hassles at the airport. I'd do it that way regardless of whether I was going to later take a deduction.