Charity funds and investments, where to start?

13 October 2015

The responsibility of Trustees to do what is right for the Charity they work for is both important and essential. You don't need the team at Chapters Financial to tell you that the Charities Commission sees these responsibilities as the cornerstone of the effectiveness of our important charity sector.

In July, the Charities Commission updated their Essential Trustee document, first published in March 2012, called 'CC3 / The essential Trustee, what you need to know, what you need to do'. I think it is important to note the speed of the update, which shows how quickly the details have moved on. As it suggests, the role of the Trustee is essential, but it comes with much responsibility. Further legislative changes are going through Parliament and are due to be released in 2016.

The updated document can be found here:

Having recently attended an excellent seminar on the subject of the responsibilities...and potential liabilities of trustees, it was interesting to note the number of questions about investment of charitable funds. With deposit returns now extremely low and the deposit protection limit falling to £75,000 from January 2016, the situation is not improving for funds on deposit. Indeed, the option of placing some funds into investments came to the fore and consequently the importance of taking advice on this topic.

The government offers much guidance on how to invest charity money and has a webpage focussed on this specific topic here:

Trustees should have set investment objectives, such as income needs, for their funds, and these should be documented and reviewed regularly. This should include any ethical restrictions your charity has and you should usually check returns against a benchmark. Trustees should hold some funds on deposit to cover immediate running costs - and this is a prudent course of action for the management of any business. Recommendations will need to be agreed and approved by the Trustees and documented accordingly.

Another really helpful document is CC14, first published in 2011, which provides further guidance on investments for Trustees here:

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The team at Chapters Financial has lengthy experience in being able to help Trustees with their investment planning to meet the individual charity's objectives. Contact us at our Guildford or Woking offices to discuss the needs of your charity and its investment objectives. Please note that no individual advice is provided in the text of this blog.

Keith Churchouse FPFS
Chartered Financial Planner
Certified Financial Planner
ISO22222 Personal Financial Planner

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