---
title: What if the shares I donate are backing my portfolio line of credit?
description: Learn how donating shares that back your portfolio line of credit can trigger a margin call, and how to reduce that risk.
---
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November 10, 2026
# What if the shares I donate are backing my portfolio line of credit?
If you have a portfolio line of credit, the marginable securities in your account count toward how much you can borrow. If the shares you donate are among them, your portfolio will support a smaller loan once they leave your account, which can trigger a margin call. Frec flags this risk in your donation estimate before you submit.
### Why donating can trigger a margin call
Your portfolio supports a maximum loan based on its value and its blended loan to value (LTV). Donated shares no longer count toward that value, so your maximum loan goes down while your loan balance stays the same.
Because different securities can have different LTVs, donating can also change your blended LTV. If your loan ends up above the new maximum, you’ll get a [margin call](https://help.frec.com/en-us/margin-calls?hsLang=en-us).
### Example: donating from self-managed holdings
You hold $500,000 in securities at a 60% blended LTV, so your portfolio supports a $300,000 loan. You've borrowed $250,000.
You donate $100,000 of stock. Your portfolio is now worth $400,000 and supports $400,000 × 60% = $240,000. Your loan is still $250,000, so you'd have a $10,000 margin call.
### Example: using your line of credit to add cash for a direct index donation
You start with the same $500,000 portfolio at 60% LTV and a $250,000 loan. You donate $50,000 of shares from your direct index and borrow $50,000 for your cash deposit.
Your cash buys new shares, so your portfolio stays at about $500,000 and still supports $300,000. But your loan is now $300,000, right at your maximum. Any market drop from here could trigger a margin call.
These examples are hypothetical and assume your blended LTV stays the same. Your actual LTV may change depending on which shares are donated and bought.
### Ways to reduce margin call risk
- Deposit cash by bank transfer, wire, or from cash already in your Frec account. These don’t add to your loan balance.
- Donate a smaller amount to keep a buffer between your loan and your maximum.
- Pay down your loan first if you’re close to your borrowing limit.
- Use the [margin call risk forecaster](https://help.frec.com/en-us/margin-call-risk-forecaster?hsLang=en-us) to see how a market drop could affect your account after your donation.
### Keep in mind
- Donations can’t be reversed. Once your shares reach your DAF, you can’t bring them back to resolve a margin call.
- Margin calls are due by the end of the business day they’re issued. If a call isn’t met, positions in your account may be sold, which can create taxable gains.
- Borrowing to deposit cash means paying interest. See [Margin interest](https://help.frec.com/en-us/margin-interest?hsLang=en-us).
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