The Charity Commission has launched its updated guidance on how charities can use investments.
Charities And Investment Matters (CC14) clarifies the position around Programme Related Investment (PRI) and Mixed Motive Investment (MMI) for charities.
Essentially, charity trustees can now decide on an investment strategy which explicitly aims at social, rather than mere financial goals, should they so choose. Its aim is to provide Trustees with the confidence to not only consider the financial implications for their charity but to also use their investments to further their charitable aims and objectives.
Paul Cheng, Head of CAF Venturesome says, “This guidance comes at an important time for the social investment market and we hope that more charities will want to look at their investments in a strategic way which furthers their charitable mission.
There are a variety of ways in which charities could use social investment vehicles for this, from an investment in a social impact bond through to lending funds to intermediaries such as ourselves.
Charities might even want to consider using their own funds to create investment vehicles which directly further their charitable aims, for example a charitable trust engaged in environmental protection could set up its own social investment fund to provide loans to environmental charities.
This guidance means that charitable funds can now be clearly used in a variety of ways to further a charity’s mission, thereby helping to develop the social investment market in the UK.”