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Why charities need your advice

May 2017

Did you know there is currently around £17 billion* of uninvested cash sitting with the top 5,000 UK charities? That's a significant untapped market that could benefit from your advice.

The Charity Commission for England and Wales is clear on its guidance for trustees on the importance of seeking advice. Charities must show that the investments they hold are suitable; that they are aligned to their investment objectives and that they have sought guidance where appropriate.

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 guidance also states that “before exercising any power of investment … a trustee must (unless the exception applies) obtain and consider proper advice”.**

What is deemed as 'proper advice' is further explained as “the advice of a person who is reasonably believed by the trustee to be qualified to give it by his ability in and practical experience of financial and other matters relating to the proposed investment.**

Sources: *'The essential trustee: what you need to know, what you need to do' (CC3)
**Charities and investment matters: a guide for trustees (CC14), sections 5(1) and 5(4). Also referenced in 'Charity finances: trustee essentials' (CC25).

Where do I start?

If you don't have any charity clients, it can seem an impenetrable sector. However, you might have existing contacts that could introduce you. Another helpful route is the Charity Commission website for English and Welsh charities. On this website, you can find a wealth of information on potential charity clients including:

  • decision makers and committee members
  • professional advisers and investment managers
  • charitable objectives
  • goals and aspirations
  • financial review and results
  • investment policy and objectives
  • full profit & loss accounts.

*Charity Financials Banking Spotlight report, 16 October 2018.

There is currently around £17 billion* of uninvested cash sitting with the top 5,000 UK charities.

We can help

Finding out about charities in this way can help open doors. But to make your advice even more relevant, it is important to understand the investment barriers faced by charities.

We commissioned a survey of 131 charities by the Centre for Charity Effectiveness at Cass Business School, University of London. We wanted to get to the heart of what might be holding some charities back from investing their cash reserves.

The research revealed that many charity trustees know they have more than sufficient cash to meet their short-term commitments. However, they struggle with knowing what to do with the rest. And even if they know they should invest some reserves, they may not be ready to take the plunge. They have not reached their 'tipping point'.

Our research findings exposed a range of underlying obstacles that charities face when deciding to invest for the first time. These barriers include a lack of investment knowledge and fear of reputational damage. The survey also highlights key factors that drive investment decision-making.

We combined all our findings into a practical toolkit for charities to help them identify their own barriers to investing.

A framework for success

We can also help you build an proposition specifically for the charity sector and create a template investment policy statement. This would form a shared reference point of understanding between you, the charity's trustees and the investment manager looking after the assets. The template could also form the basis of the charity's ongoing review.

Practical advice

Combining our timely research with the greater pressure now on charity trustees to take advice reveals a whole sector in need of tailored and relevant investment guidance.

Your advice could enable charities to progress beyond their 'tipping point' – from holding cash to investing for the first time.

We hope our research and toolkit can provide you with practical support in your discussions with potential charity clients. Ultimately, you can help them unlock unharnessed investment potential for their organisation.

Click here to read our full research and access the toolkit.

Invested capital is at risk.


Investment involves risk. - The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not a guide to future results.