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Endowed charities suspect hidden agenda in government's social investment fervour

Finance | Tania Mason | 25 Nov 2011

A number of grantmaking trusts fear that the government’s enthusiasm for social investment is just a ruse to allow it to raid charitable endowments and plug gaps in public spending.

Nigel Siederer, a former chief executive of the Association of Charitable Foundations (ACF), told yesterday’s Charity Law Association members’ meeting that endowed grantmaking foundations have “very mixed views” about the new powers they look set to be given to make mixed-purpose or social investments.

He referred specifically to Lord Hodgson’s report for the Red Tape Task Force, which he said contained an “extraordinarily waffly section on the need for new legal powers for social investment”.

“It expressed a hope that these powers could be tacked onto some statutory instrument, and I wondered why he had not had advice that that’s not a proper process to get the law changed,” said Siederer. “But it was there, and there are charities I am in touch with - it particularly affects endowed grantmaking charities - that have very mixed views about that.

“There are a few who are very keen on being able to make social investments and they’ve rather driven things along, along with some of ACF’s more radical members, but there are an awful lot of charities who are simply afraid that the government, particularly from the Conservative side, want the legal powers to make a raid on charities’ endowments in order to let the public sector off the hook.”

Siederer, who now works for the Good Foundations Consultancy, said there would be “an awful lot of resistance to this code of mixed-purpose investment being used for that”.  He added he was concerned that the CLA working party that is reviewing the Charities Act might be too keen to ensure these new legal powers are obtained, and must consider all the consequences.

“Yes, one needs better legal powers, but very carefully indeed,” he said.

Siederer told civilsociety.co.uk that he learned of the charities’ concerns while doing some consultancy work for the ACF.

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