Guide to Giving
MEDIA, JOBS & RESOURCES for the COMMON GOOD
News  |  Policy

Social Investment by Charities Review


Tuesday, 29th April 2014 at 11:25 am
Lina Caneva
The UK Law Commission is conducting a review of selected issues in charity law including social investment by charities and a proposal for the introduction of a new statutory power to make social investments.

Tuesday, 29th April 2014
at 11:25 am
Lina Caneva


0 Comments


FREE SOCIAL
SECTOR NEWS

 Print
Social Investment by Charities Review
Tuesday, 29th April 2014 at 11:25 am

The Law Commission in the UK is conducting a review of selected issues in charity law including social investment by charities and a proposal for the introduction of a new statutory power to make social investments.

The Commission said its terms of reference were to consider charity trustees’ powers to make, and duties when making, social investments and to consider whether anything could be done by way of law reform to make those powers and duties clearer.

“The Consultation Paper considers the current law and the difficulties that charities face under the current law when making social investments,” it said.

In its explanatory notes, the Commission said that to achieve their charitable purposes, charities have traditionally both spent their funds in support of their charitable objectives, 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.

“Many charity trustees can, and do, make social investments without having any concerns about the scope of their powers and duties. 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.

“In the Consultation Paper we provisionally propose the introduction of a new statutory power to make social investments. We do not suggest that the new power should replace charity trustees’ existing powers, but rather that it should supplement them, forming part of the toolbox available to achieve charities’ purposes.

“We provisionally propose 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.”

The Consultation Paper also considered whether charities with permanent endowment could use the endowment to make social investments.

“We conclude that permanent endowment can be used to make social investments which are anticipated to preserve the capital value of the endowment. We do not propose that there should be a further power to use permanent endowment to make social investments which are not expected to preserve capital,” the Commission said. 

The Law Commission is inviting consultees’ views on its provisional proposals and consultation questions in the Consultation Paper.

“After the consultation period closes on 18 June 2014, we will analyse the responses and review, in discussion with Government, how to take this aspect of the Charity Law project forward."

The consultation relates to the  Charity Law – Selected Issues project.

The Law Commission is an advisory public body sponsored by the UK Ministry of Justice.


Lina Caneva  |  Editor  |  @ProBonoNews

Lina Caneva has been a journalist for more than 35 years. She was the editor of Pro Bono Australia News from when it was founded in 2000 until 2018.


Got a story to share?

Got a news tip or article idea for Pro Bono News? Or perhaps you would like to write an article and join a growing community of sector leaders sharing their thoughts and analysis with Pro Bono News readers?

Get in touch at news@probonoaustralia.com.au


Write a Reply or Comment

Your email address will not be published. Required fields are marked *



YOU MAY ALSO LIKE

Coalition missing as Labor and Greens champion charities

Wendy Williams

Tuesday, 14th May 2019 at 8:24 am

ALP pledges to be champions of the charity sector

Luke Michael

Thursday, 18th April 2019 at 8:00 am

What charities want: A little more respect, a little more certainty

David Crosbie

Thursday, 11th April 2019 at 8:54 am

NFPs overlooking the online donor experience

Luke Michael

Friday, 22nd March 2019 at 4:58 pm

POPULAR

Dealing with the trauma of youth homelessness

Luke Michael

Monday, 3rd June 2019 at 4:36 pm

Setting Aussie kids up for success

Luke Michael

Wednesday, 5th June 2019 at 4:13 pm

Familiar faces remain in Labor’s shadow ministry ‘refresh’

Luke Michael

Monday, 3rd June 2019 at 4:27 pm

Subscribe to News
pba inverse logo
Subscribe Twitter Facebook

Get the social sector's most essential news coverage. Delivered free to your inbox every Tuesday and Thursday morning.

You have Successfully Subscribed!