Miles and miles of unused frequent flyer points can now be donated to charities across the globe via a new outlet known as Kula.
The organisation allows members of loyalty and frequent flyer programmes to convert unredeemed points or miles into charitable donations, and the programme could soon be available in the UAE.
"These unclaimed miles and points are actually converted into cash — so the charities receive cash donations," Gerrit McGowan, CEO and co-founder of Kula tells GN Focus. One thousand Kula equals $10 (about Dh36) in this global currency, with frequent flyer partners dictating the value of their currency or how many points in their programmes make a Kula.
A universal currency
The idea is simple, no less because these points are pretty much a universally recognised currency. With more and more airlines adopting the ‘use it or lose it' strategy for frequent flyer points, Kula is a valuable bridge between intention and intervention.
McGowan, who has worked as an advisor with the United Nations, set up Kula along with Chief Technology Officer Matthew Marcus, introducing a concept known as a Cause-Related Loyalty Marketing (CLM) solution. This enables cause-related rewards to be integrated in one of three methods: exchange, codes and rewards.
"I was living in Canada, where there's a popular programme called Air Miles, in which consumers earn Air Miles currency for their purchases at the grocery store or gas station," says McGowan. The scheme he refers to has a corporate connection with the Air Miles Middle East loyalty programme. "The programme is so successful that two out of three consumer transactions in Canada take place on these cards. As I dug into the technology behind Air Miles, I saw that it could be used in an entirely new way: in the corporate social responsibility space. Give consumers the opportunity to earn a currency of giving and they'll buy from the socially responsible brands that reward that currency," he said.
For the average user it means supporting the cause of choice while making everyday purchases.
The concept of giving away unused miles to charity is not new. Mileage giveaway programmes, called guest flyer programmes, are offered by the likes of United Airlines Charity Miles, American Airlines Miles for Kids in Need, Northwest Air Cares, Delta SkyWish Charities, Midwest Airlines Miracle Miles and Continental Airlines OnePass. Of the hundreds of frequent flyer programmes around the world, an estimated 10 per cent offer some kind of charitable donation option.
Some airlines also tie-up with specific charities, such as the United Airlines Charity Miles Program in the US, which has tied up with the Salvation Army to benefit the needy. Among the beneficiaries of this programme are a victim of trafficking who was united with her family in Mexico and a soldier who was flown across the country to attend his father's funeral days before deployment.
In the UAE, it has long been possible to give away frequent flyer points to charity. Emirates Airline, for instance, allows members to donate Skywards points to the Emirates Airline Foundation, which gives away millions of miles each year.
Catering to all needs
Kula's advantage is that it acts as an aggregator of charities and that it converts miles into cash. "We have more than two-million causes in our network," says McGowan. "Consumers get to choose which organisations they support. Our collection of causes reaches virtually any consumer's affinity — from local food banks to international humanitarian organisations, neighbourhood sports associations to renowned research institutes, to places of worship and children's classrooms," he says.
The Gulf region, with its dense resident population of expatriates who travel by aircraft frequently, is obviously a focus, and McGowan is already talking to partners in the region.
"The Gulf is a growing market for loyalty programmes, both in and outside of the travel sector. We see this as a great opportunity and believe that Kula's philanthropic model will resonate in the region. Although only initial talks have taken place, we hope to be offering our giving platform to the region in the next 12 months," says McGowan.
Apart from tax deduction which Kula promises, it also vets the causes it offers, working with organisations and government agencies. In the US, McGowan says he has partnered with GuideStar, which monitors US-based charities to ensure they are active and legitimate.
HOW IT WORKS: Kula's CLM solution
Exchange: Developed for loyalty and frequent flyer programmes. It allows members to convert their unredeemed points or miles into tax-deductible charitable donations. It promises to reduce unredeemed point liabilities that burden many mature programmes.
Codes: Provides manufacturers and consumer packaged goods companies with a cause marketing campaign system. The code on pack labelling provides rewards. At the point of redemption (through white-labelled web and mobile applications), customers are required to register with the brand partner's application before selecting the cause or causes they wish to support.
Rewards: A community-based coalition loyalty programme for local brick and mortar merchants. It is offered to merchant coalitions such as the Chambers of Commerce and other business associations.
— S.S.
