Identifying and implementing the right investment approach to meet the objectives of a charity or other non-profit organisation places significant responsibility on trustees.
Charities face a number of challenges and pressures – not least in managing their investments. Trustees need to ensure that the charity’s assets and investment portfolios are working in the best way possible to help achieve their charitable objectives.
Whether it’s generating investment returns without eroding capital or other requirements, a bespoke investment portfolio reflecting your specific attitude to risk and ethical principles can help your charity meet its strategic goals effectively.
Please remember investment involves risk. The value of investments and the income from them can fall as well as rise and investors may not receive back the original amount invested. Past performance is not a guide to future performance.
Structurally lower interest rates have created a long-term headwind for income investors, but today they have a new challenge: inflation. With price rising, charity investors need to be more careful that they preserve the real long-term value of their income.
We have all seen the headlines about large corporate collapses and questions about the role of the auditor, so it comes as no surprise that auditing standards have been enhanced.
Charities will be familiar with the problems created by persistent low interest rates: is it possible to create income for today’s beneficiaries while also generating returns for future beneficiaries? The total return approach is a potential option for charities with a permanent endowment and indeed for any other charity.
There has been a subtle, but insistent shift in the way a growing number of charities are looking to allocate their capital. We are finding an increasing recognition that investment should have purpose as well as generating profit, with the charity sector at the vanguard of this change.
Acting in a charity’s best interests: taking a closer look at the active vs passive debate
Charities with a rigorous risk management process will have been much better prepared for the impact of the pandemic, even if the pandemic had not been previously considered as a risk factor.
As companies have sought to protect their cashflow in the wake of the Covid-19 outbreak, dividend payouts to shareholders have been widely cut. We explore what this means for our charity clients, particularly those who need a regular investment income and consider how severe this income drought might be.
Environmental, social and governance (ESG) considerations are changing the investment landscape. We look at how charities are consequently under increasing pressure from stakeholders to draw these considerations into their investment process.
A well thought-out investment policy is essential to achieving your charity’s goals and demonstrating that Trustees have fulfilled their duty of care.
In spite of the best efforts of the regulator, and warnings that ‘past performance is no guide to the future’, trustees continue to put recent strong performance front and centre when picking an investment manager.
Climate change has become a global emergency, with individuals, corporations, charities and policymakers increasingly recognising the urgency of tackling carbon emissions.
Charity investors can give themselves a better chance of achieving stable, long-term returns by avoiding a number of common mistakes.
The investment industry is fond of jargon. Deciphering this alphabet soup of acronyms can give the impression that investing is complex and impenetrable
Public confidence in the charitable sector is currently at its lowest level
A number of changes for the charity sector have been put forward by the UK government.
Charities are not immune to fraud. In some instances charities are specifically targeted by criminals due to their perceived lack of controls and heavy reliance on trust based governance.
The question of how much cash to hold may not be as simple as it at first appears. Getting the answer right depends on good governance, a solid understanding of risk – and an awareness of the charity’s legal obligations.
Ethical investors need to be pragmatic and patient and work closely with an experienced investment manager to reflect their ethical views in their portfolios. It can be a long, but ultimately rewarding journey.
The charity sector is undergoing a dramatic changes and the challenges are many and varied.
A collection of Smith & Williamson's archived charity insight articles.
Our specialist charities investment team acts for a range of charitable interests and professional trustee boards as a reliable and trusted custodian of their assets. We take the time to understand your investment objectives, risk profile, ethical and ESG constraints and actively manage the charity’s portfolio on your behalf, with full discretion across a range of assets within agreed parameters.
We understand the additional obligations of professional trustees and offer a high standard of reporting and performance analysis online. The charity’s investment manager will attend trustee meetings as and when required, and we provide ongoing training and guidance on topical issues affecting trustees.
Understanding clearly what your charity means by risk is a fundamental part of our investment process. We believe that managing risk is an integral part of constructing a portfolio and deserves the same consideration as individual investment decisions.
We have a robust investment process that has been in place in its current form and that has proved itself in both rising and falling markets.
You will be directly looked after by your investment managers and their team so you will always be able to speak to someone familiar with your affairs and who can answer any queries promptly.
