Question 1

Can charities invest?

Accepted Answer

All charities can make investments. A charity’s powers to invest usually come from its governing document and/or the law. The source and scope of those powers depend on the charity’s legal structure, such as whether it is incorporated or unincorporated. Trustees must ensure that any investments are made within those powers and in line with Charity Commission guidance.

Question 2

Does keeping charity money in a savings or deposit account count as investment?

Accepted Answer

Yes. Holding charity funds in a savings or deposit account counts as an investment. A charity investment policy should therefore cover where and for how long cash can be deposited, limits on the amount held with any one provider, and how short‑, medium‑ and long‑term deposits are managed.

Question 3

Are there limitations on what a charity can invest in?

Accepted Answer

A charity’s governing document may place conditions or limitations on its investment powers. These may restrict certain types of investments or impose rules on how charity funds are invested. Trustees must check and comply with any such restrictions and ensure all investments further the charity’s purposes.

Question 4

What are charity trustee financial investment responsibilities?

Accepted Answer

Charity trustees have a legal duty to secure the best financial return within an appropriate level of risk to support the charity’s aims. Charity Commission guidance requires trustees to consider investment suitability and diversification, to take appropriate advice unless there is good reason not to, and to review investments regularly.

Question 5

What does social investment mean?

Accepted Answer

A social investment is one where charity trustees use money or property with the intention of both directly furthering the charity’s purposes and achieving a financial return. This definition is set out in the Charities Act and recognises that investments can deliver social impact as well as financial benefit.

Question 6

What is a financial return from a social investment?

Accepted Answer

A social investment achieves a financial return if the charity is financially better off than it would be if the funds or property were spent. This return may take the form of repayment of the amount invested, capital growth, income, or a combination of these.

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