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Last week I attended a really useful ‘Foundations in Investing’ workshop being run by the Charity Finance Group. Despite being only an hour long, the session offered a lot of useful reminders regarding practice around investing and how charities can safely manager their long-term assets and reserves in order to get the best return. Here is a useful summary of some of the key information that will hopefully be helpful for your charity too:
Why do charities have investments?
Can your charity invest?
The Trustee Act 2000 provides charities with wide investment powers via a ‘general power of investment’ clause, therefore subject to a ‘duty of care’ principle, Trustees may now invest as widely and freely as they wish with the charity’s money (unless your governing document specifically prohibits this, do double check to ensure this is true for your charity). The ‘Duty of Care’ required by Trustees involves the need to:
What options are available to you?
There are several options known as ‘core asset categories’ when it comes to compiling an investment portfolio, these include:
The hosts of the session (Sarasin & Partners) helpfully provided a useful summary of the risks/potential return for these different types of investment as follows:
In order for Trustees to fully consider any approaches to investment and what might be the right thing for their charity, it is important to firstly draft an ‘Investment Policy Statement’, here is a quick guide to the areas this should cover:
Here at BVA, we’re always on hand to support our members with the development of policies and procedures including helping you to access specialist third party advice where needed. If your organisation is considering putting together an Investment Policy Statement and need a helping hand, why not get in touch today and one of our Voluntary Sector Support Offices will be delighted to assist.
Notice of thanks:
The above details summarising the investment workshop attended along with the accompanying images are reproduced with thanks to Sarasin & Partners, the hosts of the event. They specialise in charity investment and full details of their services can be found here: www.sarasin.co.uk all information outlined in this article is for purely informational purposes only and is not intended to constitute professional investment advice.