Donating shares: ShareGift Australia

Kate Griffiths, Chair of ShareGift Australia, in conversation with Judith Fox, CEO of ASA, first published in Equity, August 2017

ASA has been a long-term supporter of ShareGift Australia, which facilitates donations of shares (whether they are unmarketable parcels or larger), donations of interest accrued on unpresented cheques and donations from foreign holders to provide a revenue stream for the charitable sector. It is the only service of its kind in Australia that converts share parcels to cash and aggregates the proceeds to distribute to charity.

ShareGift Chair, Kate Griffiths, is passionate about its core purpose, which is to benefit the community. “It is really rewarding work,’ she comments. “Our purpose is to make it easy and cost-effective for shareholders to support the community through the donation of shares to charity.”

Since its inception in 2007, ShareGift has distributed over $1.48 million to more than 450 Australian charities and plans to give a lot more. “I am often asked, why wouldn’t donors just sell shares themselves and donate the proceeds?”, Ms Griffiths notes. “We’ve surveyed our donors, and 75% of them use our services because it is a neat, no-cost and time-efficient way to divest a shareholding, particularly for holdings valued at less than $1,000.”

“Our donors may have received an inheritance of shares of unmarketable value that were acquired in a demutualisation, for example, or as part of a deceased estate. Unpresented cheques can sit around for a long time. ShareGift turns these into something that helps the community.”

Ms Griffiths points to other motivations cited by donors, which include the tax deductibility and the absence of brokerage fees. “ShareGift receives great support from its corporate brokers, who do not charge brokerage for facilitating the share sale. As a result, an Australian shareholder can claim a tax deduction for the shares' full market value,” Ms Griffiths explains. “We have a good, solid platform of individual donors, because they see the value of the service.” She notes that 10% of donors use ShareGift so they can factor in their share portfolio as part of their annual, structured giving. “We have seen an increase in repeat, large donors in recent years as they have discovered our services.”

Other factors that attract donors are that they can nominate any individual DGR (Deductible Gift Recipient) charity registered with the Australian Taxation Office's (ATO), or opt for ShareGift to decide on the use of their share proceeds. “It’s all part of our one-stop service,” says Ms Griffiths. “Donors don’t need to worry about a particular charity’s eligibility. We undertake due diligence on all charities we fund.”

The idea was first introduced in the UK — ShareGift UK has generated over £24 million to over 2,400 different UK registered charities. ShareGift Australia is based on this model and affiliated with the sister organisation in the UK, but they are separate organisations. "We want to be sustainable,” explains Ms Griffiths. “Our major challenge lies in spreading the word that we exist! If one percent of the 6.48 million Australian shareholders used our service every year, we could be giving away millions every year to the community.”

The board conducted a strategic review of the organisation in 2016 to identify opportunities for the future. One of those major opportunities arose from direct involvement in the NAB-Clydesdale demerger. The collaboration between NAB and ShareGift Australia enabled eligible NAB shareholders who held 2,000 NAB shares or less to have the Clydesdale shares (to which they were otherwise entitled) sold through a sale facility and, on an opt-in basis, shareholders could elect to donate the proceeds to ShareGift Australia. NAB shareholders raised $100,000 for charity. Monies raised were directed to Community Hubs Australia, with funding used specifically to deliver English language tuition to migrant and refugee mothers with preschool children nationally as part of the existing Mother and Child program.

“This was the first time that we are aware that philanthropic giving has been structured directly into a sale facility as part of a corporate action of this type in Australia,” the Chair of ShareGift comments. “Interestingly, there were many shareholders who wanted to participate but could not, because we had set a $2,000 cap and they wanted to tip in more than that. This showed us that they want to participate, rather than simply divesting a parcel of shares that might otherwise be an administrative burden.

”Shareholders are encouraged to ask the companies they are invested in if they are participating in any ShareGift services. If we are able to insert ShareGift into dividend reinvestment plans, mergers, demergers and acquisitions in Australia, ShareGift could quickly grow tenfold overnight. We can work with companies to facilitate participation, through transaction documents or changes to the DRP rules, for example. Our existing company partners are industry leaders in understanding that community benefit is important.”

“Our aim,” says Ms Griffiths, “is for participation by companies to become something that good companies just automatically do. It sustains our mission, by linking the corporate sector to our charity-facing purpose."

All directors are volunteers, with deep and broad knowledge in the market. There is a small, dedicated staff, headed by Executive Director, Anna Draffin, and board and management alike are concentrated on containing administrative costs. The organisation produced an annual report last year for the first time, to provide greater transparency to donors and corporate partners.

“It was a privilege to be asked to be on the board and then asked to be Chair,” notes Ms Griffiths. “We’re taking under-utilised capital and turning it into a greater good. It’s that potential to create a lasting legacy of public benefit that keeps us focused!”

If you would like to make a difference with your shares... contact ShareGift Australia