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At a time when many UK charities are facing a tough funding environment, new research released January 2011 finds that the UK public think worse of charities that don’t invest ethically.
The survey found that 78% of the UK public would think worse of a charity if they found out it had funds invested in activities that run contrary to its specific work and values.
Charities are under increasing pressure to be accountable and transparent in all that they do. In 2011 UK registered charities held nearly £78 billion in investments.
The survey results show that the public are as keen as ever to see that charities’ investments further, rather than counter, their charitable aims; 74% of respondents agreed that large charities should adopt ethical investment policies. Charities which fail to invest ethically therefore run the risk of alienating supporters which, in turn, could result in a reduction in donations. This is something which charities can ill afford, at a time when figures published following last year’s comprehensive spending review by ACEVO suggested that charities could face up to a £4.5bn reduction in funding as government cuts continue to take effect.
Key findings include:
- 87% of those surveyed either donated to charities and/or worked for them. Of these 89% were not familiar with the investments or investment policies of the charities they worked for/donated to.
- 84% of people agreed that charities should be fully transparent about their investments
- 74% of people agreed that large charities should adopt ethical investment policies prohibiting investment in activities that are contrary to their specific work and values
- 71% agreed that large charities or their fund managers should be pro-active shareholders, engaging with companies to demand high standards of environmental and social responsibility from the companies they invest in
- 78% of people agreed that they would think worse of a charity if they knew it had funds invested in activities contrary to its specific work and values
The survey is published as the Charity Commission consults on new investment guidance for trustees and others who make decisions on behalf of trustees about a charity’s investments. The proposed revised version of Charities and Investment Matters (CC14) explains the legal framework for how ethical investment, mission connected investment and programme related investment can sit alongside standard investment approaches.
Mark Robertson, Head of Communications at EIRIS said: ‘Our survey provides clear evidence that the British public expect charities to be fully transparent and to think more about the environmental and social impacts that their investments have’.
Over the last decade more charities have switched to a broader investment strategy. A survey published by the Charity Finance Director’s Group and the EIRIS Foundation in 2010 found that 60% of charities with investments over £1 million now have an ethical investment policy, and 32% of those that that did not currently invest ethically were planning to discuss the issue in the coming year.
’The multiple benefits of ethical investment are well documented. Our survey results, coupled with the Charity Commission’s new draft investment guidance, are perhaps the strongest signals yet that charities could be missing a trick by not broadening their investment strategy by linking investment activity directly with charitable aims’ Robertson added.
Click here to download a full copy of the survey results. [PDF]