English Law Commission Recommendations on Social Investment by Charities
From the release:
"Charities occupy a special place in society and in law. They exist for the benefit of the public and they must have exclusively charitable purposes. To achieve those charitable purposes, charities have traditionally both spent their funds in support of their charitable objectives (for example, providing funds to build a hospital), and invested so as to generate further funds for future initiatives (for example, purchasing shares in listed companies to provide an income). A charity making a social investment combines these objectives in one transaction, seeking to achieve both its charitable purposes and a financial benefit (...) "
"Some charity trustees, however, are not confident about making social investments because they are unsure whether their powers under the charity’s governing document or under the general law authorise such investments. In addition, some charity trustees considering whether to make social investments may feel that they risk breaching their duties."
"We provisionally proposed the introduction of a new statutory power for charity trustees to make social investments to supplement their existing powers. We proposed that the new statutory power should be accompanied by a non-exhaustive checklist of factors that charity trustees may take into account in deciding whether to make a social investment."
"We also considered whether charities with permanent endowment can use the endowment to make social investments. We concluded that permanent endowment can be used to make social investments which are expected at least to maintain their capital value."