Some useful advice.

Taking advice on investment matters is an important duty required of trustees – unless of course they are confident (and competent) in this area so they don’t need to take advice from third parties (thus saving the charity money).

But what’s good advice? It should cover both a knowledge of investing and charities because in many ways, investing advice for charities is also advice on how much to spend. They’re equally important because while Investment advice tends to regard investing as an end in itself (getting the right arrangement of assets for your ‘risk’ appetite’*), Charity advice regards investing as a means to an end, the end in question being what’s best for your beneficiaries.

So when you are reviewing your investments, don’t just look to see if manager A is better than manager B, stop and think about how your portfolio is supporting your purpose. Is it growing in real terms, could you spend more, could you earn more and so forth. If your capital has grown significantly in real terms  over the past decade you might want to spend some of that. You’ll also want to make sure that your portfolio is properly aligned with your charity’s moral outlook, especially if that has changed.

So don’t take investment advice if you don’t need it, but if you do, make sure it is balanced with broader understanding of your charity’s ambitions and that it will improve the lives of your beneficiaries. After all, that’s what we’re all here for.  

* Or in more normal language, your tolerance for an unpredictable future value of your portfolio.