Are your charities aware?

Financial advisors

After a period of consultation, the Charity Commission published their revised trustee guidance document CC3. This is the framework set by the Charity Commission around the roles and responsibilities of charity trustees. Now that the Charity Commission have allowed a period of time for trustees to align their activity to the revised guidance, we are hearing more around how the Commission are enforcing the updated rules.

One of the specifics that trustees must comply with is to act with reasonable care and skill. The example that the Charity Commission gives in CC3 is:

‘It’s vital that you take appropriate advice when you need to, for example when buying or selling land, or investing (in some cases this is a legal requirement)’.

The guide for trustees CC14 details what trustees need to be aware of and how they should act in regard to the charity and investment matters.

Many trustees are not aware of the changes to their responsibilities as set out in the guidance documents CC3 and CC14.

It is very important for a charity to have an up dated investment policy statement and for all the charity’s documents/statements to be reviewed on a regular basis. Our experience is that most charities spend time working out what they need and what it is they want to achieve when they first start up but rarely revisit this further on down the road. Yet many charities alter their ideas as they go along, they just don’t write the changes down.

Charity Commission puzzle

One of the most important roles as a trustee is to manage the charity’s resources responsibly. Which means exercising sound judgement and not taking unnecessary risks, particularly when it comes to investing. They need to make balanced and adequately informed decisions, which involves thinking about the long term as well as more immediate concerns.


The majority of charities do not have an experienced adviser, sitting on their board that can recommend how best to invest the charities assets, so wisely they contract the services of a professional.


It is disappointing to see how many charities believe that their obligations are fulfilled by entrusting assets directly to a discretionary fund manager (DFM). Both CC3 and CC14 both stipulate taking ‘advice’ and as much as the service delivered by a discretionary manager may be facilitated by an investment professional, they are only obliged to look at the solutions manufactured by their own company, both at outset and at review. CC14 stipulates that charity trustees should invest with the intention of obtaining the  ‘best financial return….appropriate to risk’, if they are limited to the solutions of one company without independently reviewing the entire market then this task becomes very difficult to deliver.


It is also horrifying to see that some charities have a St James’s Place adviser as their ‘investment expert.’ As they are not able to provide a comprehensive and fair analysis of the market giving unbiased and unrestricted advice it is impossible for them to provide the scope of diversification that the Charity Commission state is an important factor in exercising any power of investment.


You may do the accounts for a charity or sit as a trustee on a charities board if so make sure that all the trustees are aware of their responsibilities.


Our starting point when dealing with charities is to ask a series of questions:

  1. Are you confident in the overall investment policy and objectives of your charity?
  2. Do the trustees agree on the balance between investment risk and return?
  3. Are the trustees aware of the impact of environmental, social and governance factors?
  4. Do any of your investments have tax implications for charities?
  5. Are your permanently endowed funds invested in a way that helps meet long and short term aims?
  6. Do you know the charges you pay on your investments?
  7. Do you know what the total return on your investments over the last year?
  8. Do you know how your investment performance correlates to your financial goals on a continuous basis?

Our investment review service is designed with the simple objective of giving the trustees clarity and a full understanding of the investment strategy being used by their wealth manager. As well as leading to potentially enhanced returns, the service should also help trustees meet their statutory duties under the Trustee Act of 2000.

The service is suitable for Not-for-profit organisations, charities and trustees who entrust the assets of their organisation to 3rd party wealth managers or investment fund managers.


If the charities you work with would benefit from a review or you would like to find out more about our service please contact us.

Savvy Financial Planning, Hinton Business Park, Tarrant Hinton, Blandford Forum, Dorset, DT11 8JF