Why Charitable Allocation Matters

Even in a carefully screened ethical portfolio, some companies may earn a small percentage of revenue from impermissible sources while still passing the AAOIFI threshold (under 5%). When you receive returns from these holdings, the principled approach is to identify the proportional impermissible component and donate that amount to charity — "purifying" your returns.

This practice reflects a commitment that goes beyond simply screening what you own. It ensures that every dollar of profit you keep has been genuinely earned through permissible economic activity.

The Basic Calculation

Step 1: Identify impermissible revenue percentages

For each holding in your portfolio, identify the percentage of the company's total revenue derived from impermissible sources. Nucore's screening dashboard displays this value for every stock as part of the compliance report.

Step 2: Calculate your proportional exposure

Multiply your gain from each holding by the company's impermissible revenue percentage. This gives you the recommended charitable allocation for that holding.

Worked Example

Company: Example Technology Corp

Impermissible revenue %: 2.3% (passes the 5% screen)

Your gain from this holding: $1,000

Recommended charitable allocation: $1,000 × 2.3% = $23.00

This $23 should be donated to a charity of your choice. The remaining $977 is considered fully purified income.

Step 3: Aggregate across your portfolio

Repeat this calculation for each holding that has any impermissible revenue component. Sum all the individual charitable allocation amounts to arrive at your total recommended annual contribution.

Automation with Nucore's Dashboard

Nucore's charitable allocation dashboard automates this entire calculation. For each holding in your connected portfolio:

  • The current impermissible revenue percentage is retrieved from our screening database
  • Your realized gain (or estimated annualized gain) is applied to calculate the recommended allocation
  • A running total is maintained and displayed in your dashboard
  • All calculations are exportable to CSV for your records

You choose where to donate — Nucore simply provides the calculation and tracking. We do not process donations on your behalf.

Frequently Asked Questions

What if the company has 0% impermissible revenue?

No charitable allocation is required from that holding. Your returns from fully permissible companies are already completely clean.

What if I reinvest dividends?

Calculate the charitable allocation on the gross dividend amount before reinvestment, using the same impermissible revenue percentage.

How often should I calculate?

Annual calculation is most common and practical. If impermissible revenue percentages change significantly mid-year, Nucore's dashboard will flag the update so you can adjust accordingly.

What counts as a qualifying charitable recipient?

This is a personal and potentially faith-based decision that Nucore does not prescribe. We provide the calculation; you direct the donation. We recommend consulting your own religious or ethical guidance on this question.

Access Charitable Allocation Tools: Individual plan at $99/month. Institutional from $999/month. View pricing →