Investment policy

CCEW has issued revised guidance on investments following a recent consultation, bringing it up to date for the modern era and ensuring that it reflects recent legal developments such as the recent High Court judgement in the Butler-Sloss case. This guidance is set out in CC14 investing charity money: guidance for trustees.

The key theme of the guidance is the need for trustees to adopt a responsible investment strategy, acknowledging that trustees have discretion to choose what is best in their circumstances and that they have a range of investment options available. Maximising investment return remains something for trustees to aim for, but not at the expense of compromising the charity’s purposes as ultimately the need to further those purposes should underpin all of the charity’s decision making.

To assist trustees the guidance provides examples of issues for trustees to consider when setting an investment policy, such as the potential for an investment to conflict with the purposes of the charity, or the reputational risk of an investment decision. In doing so it warns trustees from allowing personal motives, opinions or interests to affect the decisions they make. The guidance also makes clear what actions trustees must take in order to be compliant with the law, such as when independent advice should be taken, and what is recommended best practice. The updated guidance also includes advice on the use of social investments that are used to achieve the charity’s purposes directly through the investment as well as making a financial return, and the different considerations that would apply.

Trustees of charities that make investments of any kind should familiarise themselves with updated guidance and ensure that through its use they are able to justify that the investment decisions they make are in their charity’s best interests.

Guidance: https://bit.ly/3ZuUEQC