Stephen Roberts explains the Charity Commission’s new guidance on charity investments.
Lawyers working with charities will be aware of the traditional approach to charity investment, namely to generate a healthy, reliable return. Trustees invest their charities’ money so that they will eventually have more to spend on the charity’s aims. They do so in a way that seeks the best return while balancing returns with risk, taking advice from professionals as needed. It’s a straightforward model that has been reflected in the Commission’s guidance to trustees.
A new approach
But traditions are open to challenge and in recent years, more trustees have been questioning whether a purely financial approach to investment is appropriate for their charity. The concept of social investment has been rapidly gaining currency. The term social investment is used loosely to describe a variety of activities that involve achieving both a social purpose and a financial return. It covers, for instance, investments made by individuals or companies which aim at achieving social impact as well monetary returns.
The National Council for
