Tuesday 26 May 2015

Shareholding Too Small to Sell? How Others Can Benefit from Your Tiny Unwanted Shares

We've all done it. Had a quick spring clean only to find some spare change down the back of the sofa or in my case--even more weirdly--a teapot.

What do you do with it? I tend to put it aside and drop it in a charity box when I next see one.

But what about when you spring clean your investment portfolio? What are you to do with that?

After you have been investing for some time it seems almost obligatory that you end up with small shareholdings. For instance, in the last couple of weeks I added tiny holdings in XL Group and South32 thanks to corporate actions. However, there are many reasons why you may have these small holdings around.

Maybe you sold a holding before you received a dividend payment and it was reinvested in a share or two afterwards? Maybe a previous holdings was acquired with some of the payment in shares in the buying company?

Whatever, many people have these micro-holdings. However, being micro-holdings they are often uneconomical to sell. After all, including brokerage fees it may even be that you make a loss on it.

So what to do with it? You could just hold onto the shares. Simple. After all, you may well invest in the company again in the future making it a non-issue.

But what about doing something good with them? How about--like that small change--donating them to charity?

Enter ShareGift!

Since I found out that it is likely I will end up with a couple of small holdings like those above I had a little root around to see whether there was anything in place to help do this.

Luckily, there was.

And here enters ShareGift. They were founded in 1996 and since then have received nearly 6,000 donations and given nearly £19.5 million to nearly 2,200 charities.

This is what they do in their own words:
People have small value holdings of shares and other investments for many different reasons, and such small amounts of shares are often difficult or even impossible to dispose of because of the costs involved. ShareGift provides a solution. Even if you have just one or two shares ShareGift can help you deal with the problem, and in a charitable way. We can also help shareholders with larger, tax-efficient donations of shares. 
We exist to realise as much value as possible from unwanted shares by aggregating them, selling them and using the proceeds to make donations to a wide range of other UK registered charities, based on the suggestions of our donors and supporters. 
When you donate shares, we arrange to transfer them into the name of our charity and they are placed within our portfolio of shares. Shares are aggregated within the portfolio until we have enough of any one holding to sell. In the meantime shareholdings may attract dividends or capital payments, and all of this helps create our pool of funds.
What is more, it is very, very efficient as they have partnered with brokers. In so doing, they do not get charged at all for selling or holding the shares. So more goes to charity.

It also, costs you nothing whatsoever to donate to them. When you donate you are also given the opportunity to suggest a charity--whether your donation if worth £1 or £1 million. This is a nice touch and, as they point out: "Our aim has always been to support every charity which is suggested to us." The more votes a charity receives the larger the proportion of the grant they are distributing they receive.

Rather nicely some companies already include a link to ShareGift on their investor relations pages (for instance, a Dividend Drive favourite Interserve).

Exit XL and South32 from Chez DD?

So, time to send my new micro additions in XL Group and South32 to ShareGift? Maybe. But not at the moment.

At the moment I am quite happy to hold onto my new little holdings. With a portfolio the size of mine even these little holdings represent a small but important element in its growth.

However, over time if my mind changes at least I know that there seems to be a safe, convenient and charitable method by which to pass them on. Chiefly this is a post to find out more about this process.

Of course, if you're sitting on South32 shares or anything else of the like and about to pull the trigger on an unprofitable sale just to keep your portfolio tidy or any other reason. Why not consider ShareGift?

Any Others?

Anybody know of other similar charity organisations in the UK or further afield? Or indeed, any other way in which you can directly link your investing activities with charitable giving? 

Have you used ShareGift? How did you find the process? I would be fascinated to hear more.

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[Creative Commons image reproduced from Flickr user Bryan Jones]


  1. Hi DD

    Thanks for highlighting this - not heard of Sharegift before and it's something for me to bear in mind for the future but like you, not right now, although I too have a little holding of South32 shares.

    I'm conscious that some PF/FI bloggers included charity donations as part of their personal goals - this is something I hope to address/include next year, although it's more likely to be more monetary (or perhaps volunteering of time) donation as opposed to gifting shares.

    1. My pleasure, weenie. My thoughts exactly. When I came across it I thought it may be of interest to people as I know many investors--especially FI types--are interested in charitable donations.

      I have been thinking of something along this lines myself. I am thinking of using a currently dormant savings account as a "charity" account and paying the spare pennies from my monthly dividends total into it. Of course, this would mean that the most I would donate in a year would be £11.88 (99p x 12 months). But it is something. Also, If I decided to set up a CAF account this would grow to £14.85 (although they do charge some fees I believe).

      The intention would be quite likely that once my portfolio has reached a certain level to change that to spare pennies from every individual dividend payment. That would be a much bigger sum over the year! Indeed, last month's dividends alone would have seen £4.22 pulled together in that way.

      We will see. I want charitable donations to form part of my investing returns and goals, certainly.

    2. I had a CAF account many years ago - just checked and maybe it's that long ago that my login details no longer work (or I've just forgotten them!) In any case, think you need a minimum of £100 to open such an account or set up direct debits of £10 a month. Their fees to administer your account are 4%, so I think I'm likely to donate direct to charities to avoid the admin charges.

    3. Yes, I just took a look. I like the idea of CAF. As I tend to give little and often to various different charities. Inevitably, they then decide they can contact you for more! You can donate anonymously using CAF which is what appeals to me. Also, I like the fact you can store up your donations for specific causes.

      The fee does seem a little steep. However, I wonder whether it makes any difference in the end. After all, how much does it cost charities to administer GiftAid themselves? I suspect quite a bit. A CAF account removes the requirement for them to do that. It may work out around the same level! Though I have no idea really!

      The required donations to open an account are not really a worry. As well as the more regular small donations--of which any dividend donations would form a part--there is one charity I give about £125 each year. Another about £15 and another about £10. I'd use that up easily.

      That being said, becoming more focused in my donations may make sense. Like most things in my life it currently operates in quite an eclectic and idiosyncratic way!

      Definitely find out your login details. You may still have undonated cash laying there unused.

      Thanks for the extra info. I will have a muse on it!

    4. Just had a deeper read into it on the train.

      Apparently, only 0.75% of the charge 4% goes to managing the account. 2.25% goes to the CAF to support their work. Another 1% goes to the National Council of Voluntary Organisations to support their work.

      Encouraging to hear!

    5. Thanks for the extra info DD, that's not as bad as I originally thought, if most of that fee is going towards supporting CAF/voluntary work. Anyway, I'll have a ponder over this, something to consider for next year. My charity donating (and my volunteering work) is quite sporadic but I do do a bit every year. Something like this would make me donate regularly but as you say, need to keep it all in balance, especially as I'm trying to increase my own wealth.

    6. I know what you mean. If it had been a full 4% to fees alone I would have been shocked and rather disgusted!

      Mine is quite regular at the moment. However, in the past it included weekly volunteering. But work has put paid to that recently so it is pretty much exclusively financial currently!

      I wrote up an article on my proposal yesterday. Don't know when I will finish and post it. As you say, it is getting the balance right. I want to keep the additional investing-related donations modest to begin with.

    7. One of the wins with CAF is that you can donate anonymously, which means no spam of direct mail from the organisation. I'm a massive fan of CAF from that point of view alone!

      Plus once you are FI and in particular if you do not have earned income you need to keep tabs on Gift Aid which needs to be within the limits of your dividend tax credits (divis from ISA holdings don't count, only unwrapped holdings) and CAF makes this easier

    8. Yes, as I noted above, the ability to donate anonymously is a great appeal to me. Because I donate little and often to many charities (but not through direct debits) I used to get bombarded by spam mail.

      I had not thought of the tax credits aspect. That is a really very good point. It would make keeping track of your donations--and thus GiftAid "entitlement"--much easier through that means.

      Does the CAF account operate as an ordinary "current" account (of sorts)? It seems to suggest that you are given a cheque book and card.

    9. It works sort of like a current account - you toss money in in lumps, and they ask you each time whether you want giftaid claimed. The GA increases the amount in the account (and the 4% knocks something off that). Because of this you can't withdraw money from the account.

      You do get a card and I believe some charities can take that, but since I prize the anonymous nospam part. I use the CAF website - they make it easy to find the charity and then you just tell them how much and they take it from the account and it's all done, dusted. No need to interact with the charity Business Machine so hopefully they get to do their job and you carry on undisturbed :)

  2. Hi D²,

    That's a good idea - I'm wondering if there are charities in the US which do similar things. I've gained a small amount of HYH, a non-dividend paying (for now) spin-off from Kimberly Clark. My 0.5765 shares are worth $24! Although I can't transfer partial shares.

    I don't really worry about the commission fee in a decision to sell them or not. My main (& admittedly lame) reason for not selling is that it's such a small value that it's hardly worth the mouse-click.

    As for charity, I guess I lean towards creating some kind of portfolio / fund where I can make donations based on the dividends it generates. That's one of my goals for the later part of this year so we'll see what happens there.

    Best wishes,

    1. It is a great idea, isn't it, DL. I was really quite delighted when I bumped into it! I don't know whether a US equivalent exists currently. It certainly should.

      It may be--I don't know this though--that you can still donate share holdings like your HYH one to ShareGift even from the US (and in partial shares). I don't know whether they would be able to do it. May be worth asking though unless you expect to pick up more HYH in the future (a dividend on the horizon?)!

      If I felt the commission was a too high percentage of the value (haven't fixed on a vague figure yet!) I would not really consider selling. In which case, in the future, I would probably donate them if I really did not think they sat well in the portfolio.

      I just largely polished off an article yesterday--on the back on my response to weenie above--outlining my proposals for how to link my investing to my donating. It will therefore be very interesting to see the approach you think you may take.

      At such an early stage in my investing/FI journey I don't plan to nobble my investing progress too much (especially as I don't plan to cut back my non-investing related giving). However, even from early on I want my investing to have a direct connection to charity in some way of another: however modest it will be at the start! I hope over time for it to grow.

      Watch this space!

      PS: ShareGift have this question in their FAQ: "I hold shares registered overseas. Can I donate these to ShareGift?"

      They state in response that: "In some instances we can accept shares registered overseas, although we cannot always arrange the transfer ourselves. Send us details of your shareholding and we will let you know how to proceed. Transfers of US securities are often problematic, and we have to treat each donation on a case-by-case basis."

      May be worth enquiring if you're interested in possibly donating in some way.

  3. Double D,

    This is an awesome find. I probably won't end up with small holdings following a tracker fund type approach, but this is an excellent idea.

    I am donating a regular amount to http://www.deki.org.uk/about_us/press. Should get the money back and then be able to donate again. Will do a post about it at some point.

    Mr Z

    PS - Excellent work on the teapot

    1. I know, Mr Z. It is a wonderful idea. I do hope that other countries have a similar system. If not, they should!

      Deki looks fantastic! I have never seen this before. I will probably redirect some money I was planning to send in another donating direction there to see what it is like. What a wonderful idea!

      I don't quite get the team bit yet. I will have a further mooch around.

      Thanks for directing me that way! May be my new favourite way to donate!

      PS: I still don't know how it got there! The teapot had been in a high shelf in our kitchen with its lid on and had not moved since we last used it. All I can think is that last time I made tea in it the 2p must have been there already and we just did not notice! Peculiar.

    2. I just donated a little cash to a couple of individuals on Deki to see how it works. Seems a great little project. Nice to see it was born in Bristol as well!

      How long have you been donating to Deki? Has it been a good experience so far?

    3. Hey Mr Z
      Thanks for pointing me to Deki too - I'd try something like this too to help out! Cheers!

    4. Only a couple of months and £10 at a time, but it seems like a great idea. There are bigger ones, but it seemed appropriate being closer to home for me.

    5. It certainly does seem a great idea. I will wait to see how the process goes along with the money I have pushed that way recently. It has made me rethink how I could link my investing to giving which is nice.

  4. As you stated, everyone of us can relate to these micro-holdings in our accounts. Personally, if the spin off pays a dividend I simply keep the shares no matter how small the holding is. However, I question what to do with my HYH spin off from KMB. They do not pay a dividend and have no plans to either yet is uneconomical for me to sell. Thanks for sharing SG with us. Never heard of this before and it may look like a good option to gift some shares over.

    1. I agree, DH. That is one of the reasons why both XL and South32 will remain in my portfolio (for now at least). They both look likely to pay a modest but welcome dividend going forward.

      It sounds like Halyard Health has left many dividend investors stumped as to what to do with their new holding!

      ShareGift definitely looks like a nice option for those in a situation like yours where they may, otherwise, sell shares for little financial gain but for their broker. If you can actually make a helpful contribution with it it is certainly a win-win situation in my eyes!