When most of us think of our charity’s investments, we probably think of them mainly as a way of providing income, either directly to the charity, or to pay staff pensions. Many charities will have investments of some sort, whether you’re a trust or foundation with an invested endowment providing the funds to make grants, or an operational charity making investments in order to pay staff pensions and generate additional revenue. As a key source of income, our main concern about our investments is likely to be “how much money is it making?” and many charities are unaware of exactly which companies they are investing in.

However, it’s worth paying attention to our investments, as investing in the right way for your charity can support your mission, and improve your investment returns. If you are unsure which companies your charity is invested in, it’s worth asking your investment manager for details.

There have been a few instances in past years of charities discovering they were making investments which completely contradict their mission – for example Comic Relief discovered it was investing in arms and alcohol, and Cancer Research UK found that their researchers’ pensions were invested in tobacco. When your charity is working hard to make sure every penny counts, it can be horrifying to discover that the companies you are investing in are directly counter-acting your hard work.

Investing in companies with activities that are in line with your charitable objectives can also help you achieve your mission – for example, a charity which fights climate change could invest in a solar panel company, or a charity working with prisoners could invest in initiatives similar to the Peterborough Social Impact Bond. Making these types of investments can really help your mission, and still see good returns on investments.

A third way to use your investments to help your mission is by engaging with companies about their environmental and social impacts. Investors have the right to engage with and influence the companies they invest in, and this can be done in a variety of ways including meeting with them, voting on resolutions, or asking questions at their AGMs. This can have a real impact on the way that companies are run and their activities, and get them supporting your mission – for example, if you have an environmental mission you may want to engage with companies about reducing their carbon emissions or damaging the environment. Or if your mission is related to health, you might want to engage with companies about the health impacts of their products or activities. Engaging with companies allows you to use your full investment portfolio to support your mission, and doesn’t limit your investable universe. Furthermore, there is evidence that being an active owner, who engages with companies, and makes sure that they are acting responsibly, will actually achieve higher returns on their investments

ShareAction runs the Charities Responsible Investment Network, a network of foundations and operational charities which are interested in using their investments to support their mission. Members of the network work together to engage with companies, policy makers and their asset managers to make changes that support their mission. For example, in 2016 network members wrote to FTSE 100 companies asking them to pay their employees the real Living Wage, contacted Minister for Climate Change Nick Hurd, asking him how the UK will meet its Paris Agreement commitments, and wrote to food companies about the over-use of antibiotics in their supply chains. We also produce guides and research to help network members be more responsible in their investments, and have regular meetings and training sessions to learn about responsible investment topics. If you would be interested in finding out more about the network, please get in touch with Jo Mountford at jo.mountford@shareaction.org


Jo Mountford is responsible investment officer at ShareAction, the leading charity on responsible investment. ShareAction works to see companies become a greater force for good through investor engagement

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