Social investment by charities

Charities will have statutory powers to make social investments under Law Commission reforms implemented by the Charities (Protection and Social Investment) Bill. The new powers were recommended in our September 2014 report, Social Investment by Charities.

Social investment is a useful tool for charities. It provides financial returns while at the same time generating social benefits. Charities are generally permitted to make social investments under the existing law but the law is far from clear, leaving many trustees in doubt and lacking the confidence to use charity money in this way. By giving charity trustees a specific statutory power to make social investments and setting out their duties, our reforms will bring clarity and certainty, and help charities make the best of the opportunities this tool offers.

The Bill, which completed its passage through Parliament on 2 February, is now awaiting Royal Assent.