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Charity Community

CC14: Refreshed guidance for trustees on investing charity money

Author: Kristina Kopic, Head of Charity and Voluntary Sector, ICAEW

Published: 03 Aug 2023

The Charity Commission has published its refreshed guidance on charities and investments, aiming to provide greater clarity to trustees about their ability to account for factors such as the environmental impact of investments and reputational risks.

The refreshed guidance follows a Commission ‘call for information’ and consultation on financial investment and reflects an important High Court judgment on charity trustees’ investment duties (the ‘Butler-Sloss’ case). It is published following a road-testing exercise in recent months by a sample of around 1,000 charities with investment income, charity lawyers and other groups representing the interests of charities with investments.

The draft updated guidance is shorter than before and retires terminology that was found to be unhelpful or confusing, such as ‘ethical’ or ‘responsible’ investment.

The updated guidance:

  • includes examples of various issues which may be relevant for trustees to consider when making investment decisions, e.g. the potential for an investment to conflict with the purposes of the charity, or the reputational impact of an investment decision
  • lists steps trustees ‘must’ take to be compliant with the law and those that trustees ‘should’ do which are strongly recommended as best practice but not legally required
  • explains that acting in the best interests of a charity is about ensuring that, above all else, any decision furthers its purposes. It also warns trustees to not allow personal motives, opinions or interests to affect the decisions they make.
  • incorporates previously separate guidance on social investment and no longer uses terminology that could get in the way of trustees’ understanding, such as ‘ethical investment’, ‘mixed motive investment’ and ‘programme related investment’

Helen Stephenson CBE, Chief Executive of the Charity Commission, said:

“Our refreshed guidance will help trustees make well-informed, carefully considered decisions about how to invest on behalf of their charity in a modern context. We would like to thank those who have played a part in helping us shape the updated guidance. We are clear that each charity’s situation is unique, and there is no ‘one size fits all’ approach to charity investments. We are also clear that that trustees have discretion to choose what is best in their circumstances and a range of investment.”

Read all of the updated CC14 guidance here: