Investment Policy

As a registered charity, [Charity name] is committed to the prudent and responsible investment of its funds to support the delivery of its charitable purposes.
This Investment Policy sets out the principles, objectives, and governance arrangements governing how the Charity’s funds are invested, managed, and monitored.

The Trustees recognise their legal duty under charity law to act in the best interests of the Charity, to manage investments responsibly, and to balance risk and return appropriately.

Purpose of the Policy

1.1 The purpose of this Policy is to:

Provide a clear framework for investment decision-making.
Ensure investments support the Charity’s long-term financial sustainability.
Manage investment risk responsibly.
Ensure compliance with legal and regulatory requirements.

1.2 This Policy supports transparency, accountability, and good stewardship of charitable assets.

Scope of the Policy

2.1 This Policy applies to:

All investments held by the Charity.
Trustees and any individuals or advisers involved in investment management.

2.2 The Policy covers:

Unrestricted funds.
Restricted funds where investment is permitted.
Endowment funds, subject to applicable restrictions.

Legal and Regulatory Framework

3.1 The Trustees will comply with:

The Charities Act 2011.
Charity Commission guidance on charity investments (including CC14).
The Charity’s governing document.

3.2 Trustees will take appropriate advice where required by law.

Investment Objectives

4.1 The Charity’s investment objectives are to:

Preserve the value of capital.
Generate appropriate income or growth.
Support the Charity’s charitable activities now and in the future.

4.2 The balance between income and capital growth will reflect:

The Charity’s financial needs.
Its risk appetite.
Its time horizon.

Ethical and Responsible Investment

5.1 The Charity recognises the importance of ethical and responsible investment.

5.2 The Trustees will consider:

The Charity’s values and charitable purposes.
Environmental, social, and governance (ESG) factors.
Reputational risks associated with investments.

5.3 Investments that conflict with the Charity’s objects or values may be avoided where reasonably practicable.

Risk Management

6.1 The Trustees will:

Identify and assess investment risks.
Ensure diversification to reduce risk.
Avoid excessive exposure to any single asset or investment.

6.2 Risk tolerance will be reviewed periodically.

Investment Strategy and Asset Allocation

7.1 The Trustees will determine an appropriate investment strategy.

7.2 Asset allocation may include:

Cash and cash equivalents.
Fixed-interest securities.
Equities.
Property or other assets, where appropriate.

7.3 The strategy will be reviewed regularly.

Liquidity and Cash Management

8.1 The Charity will ensure sufficient liquidity to:

Meet short-term obligations.
Support operational needs.

8.2 Investments will be structured to allow access to funds when required.

Appointment of Investment Managers and Advisers

9.1 Where appropriate, the Trustees may appoint:

Professional investment managers.
Investment advisers.

9.2 Appointments will:

Be based on competence and suitability.
Be documented in writing.
Be reviewed regularly.

Delegation and Authority

10.1 The Trustees may delegate day-to-day investment management.

10.2 Delegation will:

Be clearly defined.
Include reporting and oversight arrangements.

10.3 Ultimate responsibility remains with the Board of Trustees.

Monitoring and Performance Review

11.1 Investment performance will be:

Monitored regularly.
Measured against agreed benchmarks where appropriate.

11.2 The Trustees will review:

Performance.
Risk exposure.
Compliance with this Policy.

Conflicts of Interest

12.1 Trustees and advisers must:

Declare any actual or potential conflicts of interest.

12.2 Conflicts will be managed in accordance with the Charity’s Conflicts of Interest Policy.

Reporting and Transparency

13.1 The Charity will:

Maintain accurate records of investments.
Report on investments in its annual accounts and Trustees’ Report.

13.2 Significant investment decisions will be documented.

Review of the Policy

14.1 This Policy will be reviewed:

At least annually, or
Following significant changes in the Charity’s financial position or objectives.

14.2 Any amendments must be approved by the Board of Trustees.

Conclusion

By adhering to this Investment Policy, [Charity name] ensures responsible stewardship of its investments, balances risk and return appropriately, and supports the Charity’s long-term sustainability while remaining compliant with legal and ethical obligations.

Signed: ………………………………………
Chair of the Board of Trustees

Date: ………………………………………

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Disclaimer:

Naail & Co provides these policy templates solely as guidelines or standard templates to assist charities in developing their own policies in accordance with Charity Commission England & Wales compliance. These templates are not intended to serve as legal or professional advice, and Naail & Co cannot be held responsible or liable for any outcomes arising from their use. It is essential that each registered charity carefully tailors and customizes these policies to reflect its specific needs, structure, and legal obligations. We strongly recommend that charities seek independent legal or professional advice to ensure compliance with all relevant laws and regulations.

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