This month, I am pleased to publish the results of a new addition to our schedule of annual surveys.
The survey covers investment consultants, a group that we at Charity Finance have heard from many sources (and seen for ourselves) are increasingly active in the charity sector.
Of course, not all charities have investments, and not all that do will need to work with an investment consultant. However, with their increased presence, we hope that the survey is one of the tools that charities will be able to use to differentiate between these firms and to develop their understanding of the services available.
The two main issues that the investment consultants say charities are seeking advice on are perhaps not too surprising – after all, they have both made the headlines over the summer.
The first is the current economic climate. On that front, there was some potentially good news as the rate of inflation dropped to 6.8% in the year to July, down from 7.9% in June.
I say potentially good news because this is still higher than recent history, and does not mean that prices are falling (just rising less quickly) – the cost of basic food items remains higher than a year ago. For example, according to the BBC, data from the Office of National Statistics (ONS) shows that in July the cost of two pints of milk was 11% higher than a year ago, while 12 medium-sized eggs was 27% higher.
This means that many will be struggling with the cost of living. However, there was good news in that lower electricity and gas bills drove the drop in inflation and ONS data also showed that wages increased by 7.8% between April and July.
Hopefully, inflation will continue to fall, helping to ease the cost pressure on charities and the beneficiaries they serve.
The other issue cited by investment consultants was advice around environmental, social and governance (ESG) issues and adopting a responsible investment approach.
Over the summer, the long-awaited updated investment guidance from the Charity Commission was published. One of the main reasons for the update was to clarify the position on responsible investment and to reflect the Butler-Sloss judgment.
I won’t need to remind you of the twists and turns of the development of the guidance (we have covered it in numerous past issues) but hopefully now it is published, trustees and charity finance teams have more certainty on how to align their investments with their values.
Tristan Blythe is editor of Charity Finance
