Investing for Charitable Trusts in the current economic climate

The legal responsibilities of Trustees (whether they be for a Charitable Trust or for other entities, such as occupational pensions) have increased significantly over recent years. For Trustees to Charities this is evidenced by the Trustee Act 2000 that came into force on 01 February 2001. This legislation was introduced to keep pace with the evolving investment market, following the previous legislation in 1961, referred to as the Trustee Investment Act (1961). The new act, amongst other points, introduced new powers of delegation, new powers for the appointment of agents and introduced appropriate safeguards for the operation of the new powers including a duty to take proper advice in relation to investments and a statutory duty of care. This is detailed further on the Charities Commission page CC14, section E, 61.

This guidance has become all the more relevant in the current economic climate and taking independent financial advice is vital to protect the interests of the Trust and provide protection to the Trustees. This can include advice on where assets are invested, including cash, Government stock and equities, if this is right for the Trust.

It is also important that any existing investment decisions are reviewed on a regular basis to ensure that they remain prudent in the current volatility.

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