Refreshed guidance on investments to boost Trustee confidence 

The Charity Commission has recently released the updated guidance regarding charitable investments, adapting it to modern times. 

Issued last month, this guidance (referred to as CC14) has been revamped to provide increased clarity and to empower Trustees in making investment choices that align with their charity’s objectives. 

The language has been made more comprehensible, and the structure has been streamlined, ensuring that Trustees can access the information they require more efficiently. 

As conversations persist in the sector concerning how charities should consider factors like environmental impacts when making investments, the guidance emphasises that Trustees do have the discretion to determine what suits their specific circumstances. They have a variety of investment options available if these options ultimately contribute to the charity’s goals. 

The revised guidance is a result of a “call for information” from the Commission and consultation on financial investments. It also reflects a significant High Court judgment concerning charity Trustees’ investment responsibilities (the ‘Butler-Sloss’ case). Trustees can now rely on this guidance as it is current and accurately represents the relevant legal aspects. 

Key aspects include: 

– Offering examples of various considerations that Trustees should factor in when making investment decisions. These include assessing whether an investment could conflict with the charity’s purposes or how it might impact the charity’s reputation. 

– Listing actions that Trustees are “required” to take to adhere to the law, as well as actions they “should” undertake, which are strongly recommended as best practices but not legally obligatory. 

– Clarifying that acting in the charity’s best interests entails ensuring that decisions primarily advance its objectives. Trustees are cautioned against allowing personal motives, opinions, or interests to influence their decisions. 

– Incorporating previously separate advice on social investments and eliminating terms like ‘ethical investment,’ ‘mixed motive investment,’ and ‘programme related investment’ that could potentially confuse Trustees. 

The examples provided within the guidance are intended to assist in recognising the factors pertinent to the charity’s circumstances. This enables Trustees to apply the guidance accurately and justify that their decisions are aligned with the charity’s best interests. 

This guidance can be accessed on the Charity Commission’s official gov.uk page here

Please contact myself or Lucy Hatton should you have any questions.