Strate Charity Shares (SCS), which was created as an independent non-profit organisation and charity donation programme that focuses on charities dedicated to feeding, raising and educating children, has now expanded its list of eligible securities to include odd lots of bonds as well.
Investors who have wanted to dispose of odd lots of securities (such as bonds and equities) to neaten up their portfolios have been deterred by the cost of selling them. As a result, thousands of rands are tied up in forgotten assets that cost more to sell than they are worth, and portfolios are left in an untidy state.
Today, company securities registers are filled with these odd lot securities. To trade these, the paper securities also needed to be dematerialised by the investors, who seldom chose to convert their securities into electronic form and would rather store the paper certificate at their homes. A solution is for clients to give their securities to charity by contacting Strate Charity Shares, either directly, or through their broker, to donate their securities.
SCS has been a highly effective vehicle for getting rid of small holdings of shares that are too costly to sell through a stockbroker. Not only do shareholders incur no cost if they donate their securities to charity through SCS, they also receive a tax benefit for doing so.
“With investors now able to donate both bonds and equities towards SCS, they are able to help children in need, while also receiving the added benefit of tidying up their portfolios. These portfolios are littered with little holdings of securities that can’t really be sold, as the cost is too high to do so,” says Tanya Knowles, SCS Director and Strate’s Head of Project Innovation and Business Services.
“Also, when investors donate their securities to SCS, they are issued a receipt that can be claimed against their taxation liability, as per Section 18(A) of the Income Tax Act,” she adds. For individuals donating their equities to SCS, there are added cost-saving benefits for issuers and brokers too, given that issuers will have less of these odd-lot share holdings to maintain in their registered portfolios if they are donated to charities via SCS. The costs of producing annual reports will decrease, as these publications need to be produced and for these small share lots as well. Often, the paper to print these reports, or the administration required to pay out dividends, is significantly higher than what the securities are worth.
Since 2002, SCS has paid more than R3.9 million to charities dedicated to helping children, with R1.1 million donated in 2014 alone. The people and companies involved in SCS all give their time and labour free of charge. Charities that have historically been the recipients of these donations are African Childrens’ Feeding Scheme; Salesian Life Choices; The Bethany House Trust; Child Welfare Tshwane; Topsy Foundation and Cotlands.
If you have any queries regarding obtaining or completing the forms, please call the Strate Charity Shares’ toll-free helpline on 0800 202 363 or +27 (0)11 870 8207 if you are phoning from outside South Africa. Alternatively, you can email charityshares@computershare.co.za.
