ACF: Foundations need to do more to promote ethical investments

Charity foundations are being urged to do more to ensure thier investments are promoting the objectives of charities.

The call for heightened ethical investment lobbying by UK charitable foundations, which represent £67bn in assets, comes in the Association of Charitable Foundations (ACF) report Investment: The Pillars of Stronger Foundation Practice.

The report is based on 18 months research and focuses on the role between trustees, foundation trusts and investments.

It says a strong charitable foundation is one that “engages with and holds to account those managing its investments”.

The "pillars" of strong foundations are also to prioritise their mission when setting investment objectives.

They should also understand “that responsibility for its investments sits with each and every member of the trustee board”.

Charity foundations also need to prioritise transparency and respond to scrutiny. This will lead to “increased trust and legitimacy”.

“Society is demanding ever greater transparency from institutions and asset holders, about the sources of that wealth and how it is invested and stewarded,” said ACF chief executive Carol Mack.

“New approaches to creating a sustainable economy are emerging and the climate crisis means action is both necessary and urgent. Foundations will need to move forward to avoid falling behind.

“Now is the time to take action. We aim to show how foundations of any size can approach their investments with mission at the forefront of their thinking, whatever that mission may be.

“Thinking about investments is not the preserve of large foundations, nor of those trustees with specific expertise; it is relevant to all foundations looking to maximise the impact of their resources.”

Chair of the ACF’s investment working group Danielle Walker Palmour added: “The reality is that most of our assets are invisible, even to us. But investment strategy is integral to foundation strategy.

“As members of this working group, we have explored how investments can be brought into our strategic arsenal to be of true service to our missions. It is vital we engage with and shape that work to ensure it is consistent with our objectives.”

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