Charity Investment: What Matters Most?

Brewin Dolphin

In one of the widest charity investment studies in recent years, this research examines the investment and other challenges facing UK charities and what more the investment management industry and policymakers could do to help.

Researched and written by Gabriel for investment manager Brewin Dolphin,

Charity Investment: What Matters Most?

was based on depth interviews among UK charity trustees, chief executive officers and their advisers, an online survey targeting trustees and senior decision-makers, and desk research comprising a comprehensive review of published studies.

With expert comment from Brewin’s Charity team specialists in England, Scotland and Wales and third party industry experts, including the Charity Finance Group, the report highlights how charities have been compelled to rethink investment matters amid concerns about income, low growth and inflation, which have been exacerbated by political uncertainty.

The need for income was their main concern overall; second was the impact of political uncertainty with respondents worried about the potential loss of workers and EU staff availability as a consequence of Brexit at a time when demands upon charity resources and support are expected to increase. Chief investment risk concerns were low growth and low interest rates, followed by volatility and inflation.

Attitudes towards cash management and inflation highlighted the investment imperative – over three quarters of respondents receive interest of 0.5% or less on their cash deposits.

Ruth Murphy, Head of Charities at Brewin Dolphin said:

“With so many charities being tasked to do more with less, risk management of assets and funds has become a key priority. Charities are understandably risk averse and can view cash deposits as the safest place to invest but cash cannot compete with inflation. So, it is not surprising that more and more charities are becoming reliant on the performance of their investments to plug the gap caused by the decline in other sources of funding and a continual increase in demand for their services.”

Commenting on the findings, Andrew O’Brien, Head of Policy and Engagement at the Charity Finance Group said:

“The pressure on income from investments is clear from this report, and charities will need to cut their cloth to some extent based on what market conditions allow. This is where building a relationship with your investment manager is so important, and working with charity experts, like Brewin Dolphin, really adds value.”

Giselle Davies, Partner and Head of Charity & Social Enterprise team, Geldards LLP, said:

“I always think of the Charity Sector as the first not Third Sector. First to be asked for help, first to react in times of need, but sadly, also first to be affected by austerity or financial downturn as members of the public and government bodies tighten their belts. Charities today are operating in a rapidly changing landscape with myriad uncertainties rightly highlighted in this report.”


Brewin Dolphin press release

Charity Times
Large number of charities don't have ethical investment policy, survey reveals

UK Fundraising
Financial concerns see charities rethinking investments, report shows

Civil Society
A third of charities don't have an ethical investment policy, finds survey

“This is a timely and lucid review of the intensity of the many financial challenges, uncertainties and other pressures facing trustees of UK charities.”

David Carrington
Adviser and consultant on social impact investing and philanthropy