Is your charity thinking with clarity?

Published by Adam Walker, Neil Davies on

The Charity Commission published draft guidance in February 2013 which puts focus on the need for charities to take formal advice when considering their investment strategy.

Barnett Waddingham's experience of advising charities and not-for-profit organisation can therefore assist
trustees in meeting this need.

Our view is that a fund's investment strategy should be fundamentally related to its anticipated distributions, which will vary from organisation to organisation.  This is unlike the 'stand-alone' approach of an investment manager whose advice will be centred around the performance and objectives of available investment vehicles.  In our opinion, this is only part of the full picture.

"Our view is that a fund's investment strategy should be fundamentally related to its anticipated distributions, which will vary from organisation to organisation"

Our approach advocates that all three of the following areas are reviewed in setting a charity's investment strategy:

  • agreeing appropriate objectives and then setting an asset allocation to reflect this
  • investment management styles and benchmarks
  • finding managers who can implement a strategy which is appropriate to the trustees' risk criteria

We can assist charities with these three stages, and although trustees often believe that manager appointments are key to investment success, in practice we find that the first two stages are far more important.


We tailor our services to each fund we advise which may include some or all of the following:

  • agreeing investment objectives and understanding risk
  • advice on governance issues (e.g. ethical policy, voting rights and so on)
  • preparation of a statement of investment objectives
  • consideration of alternative asset classes
  • setting benchmarks for investment performance measurement
  • fee negotiation with investment managers (whether existing or new)
  • implementation of investment strategy changes
  • ongoing performance measurement and analysis of investment manager reports
  • attending trustee meetings