Aligning a charity's investment strategy with its charitable mission

How we helped the trustees of a charity to formulate their investment beliefs to align their investment strategy with their charitable mission. 

The background

Our client, a charity in the medical sector, was looking to refresh its investment policies to allow for current best practice on responsible investment. In particular, they were concerned about risk to the charity’s reputation from some of the investments in their current portfolio. We were appointed to help them establish a coherent set of investment beliefs that they could use as the framework for updating their investment strategy.

Our solution

At the outset we provided bespoke training on environmental, social and governance (“ESG”) factors. The training, which was highly interactive and evidence based, was designed to synthesise a range of individual views into a single coherent set of beliefs for the charity. We addressed:

• what their risk attitude was;
• what their concerns were;
• what the most important ethical factors to them were;
• what level of investment return they should target; and
• what would constitute a ‘disaster scenario’ for them.

Through this process we helped the trustees to explore and articulate their attitude to risk as well as investment and ethical beliefs. Alongside the consideration of ESG factors we also modelled the investment strategy and the outlook for the charity so the effect of any changes on the charity’s business plans could be clearly seen.

The results

From a range of individual views we have helped the Trustees to form a coherent consensus set of investment beliefs. Building on these, and reflecting our understanding of their long-term business plans, we have advised on a suitable investment strategy. We are now working with them to implement the strategy, including training on alternative asset classes and selection of managers.