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Every shareholder can be a philanthropist

Photo of Anna Draffin, ShareGift Australia By Anna Draffin, ShareGift Australia

min read

Hundreds of charities benefit from unlocking share capital.

According to ASX Australian Investor Study 2017, Australia continues to have one of the highest levels of share ownership in the world. Equity ownership has become increasingly attractive for millennials (31 per cent now hold shares) as house prices in major cities continue to skyrocket.

Meanwhile, public appetite, particularly among millennials, continues to grow for social and environmental benefits to accompany commercial success.

With such changing investor attitudes and profiles, shared value has now become part of corporate Australia’s DNA for investors and companies alike. However, finding shared value for shareholders outside of financial returns can be difficult.

ShareGift Australia is an independent, non-profit organisation established to unlock share capital to create an innovative stream of charitable funding. Put simply, it converts and consolidates proceeds from different activities – for example, sale of individual share parcels, donated dividend reinvestment plan residuals, corporate action share issues, dividends and unclaimed monies – and distributes the funds to charity.

It is the only service of this kind in Australia and is available free to any shareholder, charity or ASX-listed company. So far it has distributed more than $1.6 million to more than 450 charities across Australia.

That amount could easily be doubled overnight through more shareholder and company participation. Imagine unlocking a fraction of ASX’s estimated $1.8-trillion market capitalisation – it would trigger a huge new wave of philanthropic funding in Australia.

Some of Australia’s leading corporates, including National Australia Bank, Wesfarmers and Coca-Cola Amatil, have been early adopters of ShareGift’s platform and clearly understand the market value they have created in the process for their shareholders.

Shareholders can opt-in to our services on an individual basis (for example, through share sale donations) or via facilities such as a company’s dividend reinvestment plan.

NAB set a new Australian benchmark through its recent demerger and Initial Public Offering of Clydesdale Bank. Under the scheme of arrangement, eligible NAB shareholders with 2,000 NAB shares or less were given the option to divest the Clydesdale shares (to which they were otherwise entitled) through a sale facility and donate the proceeds to ShareGift Australia.
The resulting $100,000 raised was distributed to the non-profit Community Hubs Australia, which works with local communities and governments to support refugees and new migrants as they become active community members.
This was the first time in Australia that philanthropic giving had been structured directly into the sale facility of this type of corporate action.

What shareholders can do

From a shareholder’s perspective, ShareGift is a win-win situation. The no-fee services provide a neat and time-efficient way to divest a shareholding, particularly those under $1,000. As a charity, there is tax deductibility for the shares’ full market value.

Shareholders seeking a more structured approach to their donation may nominate a specific charity, or leave that to ShareGift – 10 per cent of share donations in 2017 were part of individual donors’ annual giving.

Any shareholder can use ShareGift to spring clean their portfolio each year. There is no brokerage.

Deceased estates may similarly capitalise on donating shares. It is a cost-effective, single-step process to divest unmarketable parcels and put them to good use. Shareholders can also donate shares to ShareGift in their will and nominate recipient charities.

How ShareGift selects charities

ShareGift Australia aggregates share proceeds received and distributes funds to Australian charities on an annual basis. A board of directors determines the allocation, guided by the weight of recommendations received from share donors and partner companies. It is charity and cause neutral, and does not accept applications for funding from charities, nor maintain a list of “preferred” charities.

More than 54,000 charities are registered with the Australian Charities and Not-for-Profits Commission (ACNC), of which ShareGift has funded 450 so far. They are extremely diverse, ranging from grassroots organisations to much larger charities such as Beyond Blue or World Vision, from first-time to repeat recipients, and across all areas of need – health and medical research, education, poverty and disadvantage, youth, animal welfare, culture, environment and international aid, and many more.

One of the many benefits of ShareGift Australia is that it also undertakes due diligence on all charities it funds, including the latest information from the ACNC registry.

The future

If 1 per cent of Australia’s 6.9 million shareholders accessed ShareGift every year, millions of dollars would be generated for the community. It has the potential to create a legacy of real public benefit.

ShareGift’s major challenge is spreading the word that it exists. So next time you are with your adviser or investing in an ASX-listed company, ask if they are participating in ShareGift’s services.

About the author

Anna Draffin is Executive Director of ShareGift Australia.
Follow: @AnnaDraffin

ShareGift Australia is a registered charity (ABN 27 086 590 485), regulated by the ATO, ASIC, AUSTRAC and the Australian Charities and Not-for-profits Commission (ACNC), and endorsed by the Australian Securities Exchange (ASX) and the Australian Shareholders’ Association (ASA).

From ASX

Corporate Social Responsibility outlines ASX’s work with several charities.

The views, opinions or recommendations of the author in this article are solely those of the author and do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN 98 008 624 691 and its related bodies corporate ("ASX"). ASX makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions. To the extent permitted by law, ASX excludes all liability for any loss or damage arising in any way including by way of negligence.

© Copyright 2017 ASX Limited ABN 98 008 624 691. All rights reserved 2017.
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