19 March 2019 - Article
The Charity Commission has released revised guidance entitled ‘Charities and Investment Matters: a guide for trustees’ (CC14). The guidance aims to help trustees make decisions about investing charity funds and has been produced following a long consultation with the sector on the topic beginning in December latest year.
The guidance recognises three types of investments:
- financial investment – investing to produce the best financial return, subject to a charity’s trustees considering the appropriate level of risk;
- programme-related investment – investment which directly furthers a charity’s aims in a way that might also yield a financial return; and
- mixed-motive investment – a mixture of the two: investment that cannot be wholly justified either as financial or programme-related investments, but which the trustees still consider to be in the best interests of the charity.
The Charity Commission reports that:
‘The updated guidance confirms that trustees can invest ethically, sustainably, for financial return or to achieve charitable aims or for a mix of all or any of these. But it emphasises that trustees must be clear about their motive in making an investment and must be able to justify that they are using their charity’s resources in its best interests.’
The Charity Commission guidance is available here.