Guidance for trustees on investing charity money published

Date: 08 Nov 2023

Ashleigh John

The Charity Commission has published updated investment guidance for charity trustees (CC14), which reflects findings from the Butler-Sloss judgment and incorporates the previously separate guidance from the Commission on social investment.

The Butler-Sloss case considered how charity trustees can legitimately take account of non-financial considerations when investing. The judgment confirmed that there is no absolute prohibition against a charity making investments that directly conflict its purposes. However, this comes with the caveat that, where trustees reasonable believe that an investment conflicts with their charity’s purposes, they have the discretion to decide whether to exclude it.

The guidance outlines general and specific duties for trustees in relation to investment, including the duties to consider suitability and diversification, the duty to take advice, and the duty to review investments. The Commission acknowledges that these duties apply only to trustees of charitable trusts.

It has been clarified by the Commission that trustees can choose which investment approach is in the best interests of their charity and, provided they further the charity’s purposes, have a range of investment options available to them. Social investment has also been considered by the guidance, which is defined as ‘investing with a view to both achieving a charity’s purposes directly through the investment and making a financial return’.

The guidance also provides the Commission’s views on investing a charity’s permanent endowment, advice for charities that mainly invest cash, and setting a charity’s investment policy.

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