Date updated: Tuesday 22nd August 2023

The long awaited updated guidance on charities and investments (CC14) has been published by the Charity Commission. It is easier to understand than the previous version and there is increased clarity on investment decision-making for trustees.

The Commission initially consulted the sector on revised guidance in 2021, with the aim of providing clarity for charity trustees on adopting a responsible (or ‘ethical’) approach to investing their charity’s funds. The process of updating the guidance was put on hold while the case of Butler-Sloss & Others v Charity Commission [2022] was heard in the High Court.  The judgment was handed down in April 2022, providing much needed clarity as to the extent to which charity trustees can permit their objects and wider moral considerations to influence their investment policy. The updated guidance reflects the judgment and has recently been ‘road-tested’ by a sample of around 1,000 charities, with the aim being to ensure the guidance is structured and worded in a way that is helpful to trustees and their advisers.

It is important to note that, when taking investment decisions, trustees should keep the charity’s purposes central to their approach.  They will also need to check their charity’s governing document, as it may place conditions or limitations on the use of any power of investment.

The updated guidance

The key changes to the Charity Commission’s investment guidance are as follows:

  • It reflects the decision made in the Butler-Sloss case. The guidance clarifies that it is up to the discretion of charity trustees to choose what investment approach is in the best interests of their charity, provided they take into account the circumstances and the range of investment options available, and as long as the investment decisions ultimately further the charity’s purposes.  The guidance makes clear the specific trustee duties that apply when a charity is making a social investment are different from those that apply to a financial investment.
  • It includes examples of approaches to investment that charity trustees may wish to take. The guidance contains a non-exhaustive list of approaches alongside the financial return that they may be aiming for, including one or more of the following: avoiding investments that conflict with a charity’s purposes or could reduce support for the charity or harm its reputation (in particular in relation to its beneficiaries or supporters); avoiding making investments in companies because of their environmental, social and governance practices, and using a charity’s shareholder vote (or other opportunities that come with the investment) to influence the practice of companies in which the charity invests.
  • The guidance more clearly details trustees’ legal duties and good practice.
  • The updated guidance is much shorter and easier to use than the previous version.  There are examples of different investment approaches in the guidance, and a legal underpinning document to accompany the key guidance.
  • Simplified terminology is used: the Commission has removed reference in its guidance to ‘ethical investment’, ‘responsible investment’, ‘mixed-motive investment’ and ‘programme-related investment’, which were deemed confusing by respondents to the 2021 consultation. 
  • The previously separate guidance on social investment is now incorporated into CC14.


Trustees need to familiarise themselves with the updated guidance that has been broadly welcomed in the sector and helpfully clarifies charities’ abilities to make social investments.  They should consider reviewing their investment policy in light of the new guidance – the Charity Commission is unlikely to have concerns about your charity’s investment decisions if you can show that you have complied with your trustee duties and your charity’s governing document, considered and balanced relevant factors, taken advice (unless you have good reason not to), and reached a reasonable decision.  You should ensure that minutes of discussions and decisions taken by trustees are carefully recorded.

NCVO recently launched its Fuelling Positive Change campaign.  The campaign highlights the types of investment decisions charities may wish to take, e.g. considering a move away from investing in oil and gas, which have historically generated significant income. Sarah Vibert (CEO of NCVO) commented: “Trustees may want to consider if that will remain the case and how it fits with their values, balancing the views of their members and stakeholders, their reputation, and ultimately what’s in the best interest of the charity.”

Trustees may wish to reconsider how they identify “programme-related” and “mixed-motive” investments, however, Charities’ SORP still uses these terms, so they are still relevant when considering the accounting treatment of these types of investments.

Trustees should seek independent advice if they are unclear about their investment powers.