Sat, 26 November 2022

Newsletter sign-up

Subscribe now
The House Live All
Health
By Tom Sasse
Health
Environment
How we are building digital knowledge and inspiring cyber careers Partner content
By Raytheon UK
Defence
Press releases
By Cruelty Free International

Clarifying the legal framework for social investment by charities

Law Commission | Law Commission

2 min read Partner content

Social investment provides financial returns while at the same time generating social benefits. It is an important and developing area for charities, enabling them to meet their charitable objectives by combining investment and spending. In a consultation opening today the Law Commission is seeking views on the law that governs how charities make social investments.

Many charities are already involved in social investment and the existing law is not proving an impediment to them. There is some concern, however, that the law is unclear on the precise powers and duties of charity trustees in this developing field. There is a risk that some trustees may be deterred from engaging with social investment owing to the complexity and lack of clarity in the current law.

The Law Commission’s consultation paper analyses the legal framework, explains the ways in which the law already supports charity trustees and proposes changes that would clarify the way in which charities can use social investments to achieve their charitable aims. The Commission is asking whether the introduction of a new statutory power to make social investments (sitting alongside existing powers), and a checklist of factors that may be considered by trustees, would bring clarity and certainty and give trustees more confidence in making social investments.

The Commission is also reviewing the circumstances in which charities with permanent endowment can use their endowment to make social investments.

Professor Elizabeth Cooke, the Law Commissioner leading the project, said:

“Charities have a special place in society. The contribution they make is made possible, in part, by how they spend their money.

“Social investment is an important and developing area for charities. The reforms we are proposing would make social investment more straightforward legally. We are asking consultees: would our proposals help trustees to make the best of the opportunities offered by social investment?”

The consultation paper is available on www.lawcom.gov.uk. The consultation closes on 18 June 2014.

Read the most recent article written by Law Commission - The best of both worlds: How to strengthen hate crime laws and protect free speech

Associated Organisation
Podcast
Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now

Partner content
Connecting Communities

Connecting Communities is an initiative aimed at empowering and strengthening community ties across the UK. Launched in partnership with The National Lottery, it aims to promote dialogue and support Parliamentarians working to nurture a more connected society.

Find out more