New draft guidance from the UK Charity Commission has confirmed that charities can ‘validly consider seeking a return which brings social as well as financial benefits’. Since the last revision to its guidance in 2003, the social investment world has moved on. The Commission’s recently launched consultation will cover financial investment, ethical investment, mission connected investment and programme-related investment (PRI).

In the interim, the Commission’s new draft guidance explains the different rules that apply to each form of investment. It makes clear that it is ultimately for trustees to decide the best approach for their charity, but sets out their duties and responsibilities when making these decisions. ‘The Commission’s guidance has always allowed charities to use a mix of financial and social investment to achieve their aims,’ says Dame Suzi Leather, Chair of the Commission, ‘and we hope our consultation clarifies this even further by explaining what charities can actively do within the law.’

In response, Geoff Burnand of Charity Bank has described the consultation document as ‘a huge step forward for the charitable sector. These changes also draw attention to an urgent need to find new criteria with which to measure returns on investment portfolios that deliver social as well as financial benefits,’ he added.

The consultation document, which can be found on the Commission’s website, is open until 28 February.

For more information
http://www.charitycommission.gov.uk/RSS/News/pr_investment_matters.aspx