The Charity Commission is revising its investment guidance for trustees to allow for “social investment”.
Its draft guidance published this week, Charities and investment matters, offers a complete redraft of its existing advice on investments for trustees and confirms that charities can validly seek social as well as financial returns. This could mean ethical investment or investing in a way that directly furthers the charity’s aims.
Charity law specialist, Gerry Morrison, associate at Rollits LLP, says: “For a long time innovative charities have been combining social and traditional financial investment to maximise the use of the charity’s assets to deliver its aims.
“The new guidance represents a shift in focus by encouraging charity trustees to be more imaginative when reviewing the charity’s investment policy by thinking about how combining financial and social investment may better fulfil the charity’s aims.”
The wide-ranging guidance for trustees also covers such issues as whether charities can invest in companies in which trustees have private interests, and whether a charity can pay an investment manager.
The guidance was last updated in 2003. The consultation ends on
28 February 2011, and can be viewed online at www.charitycommission.gov.uk.
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