Charities and endowments

The largest 300 endowed charitable foundations in the UK have over £84 billion in total assets.

The bulk of this is invested in mainstream capital markets without consideration of how it might generate environmental or social benefits. 

It is a long-standing paradox that foundations give grants to achieve specific social or environmental objectives – yet their endowments are often not invested with those same objectives in mind. 

Addressing the disconnect 

All investments have an impact – positive or negative. The question is whether foundations are being intentional about that impact. 

A growing number of organisations are seeking to deliver positive impact through their investment portfolios alongside financial returns. However, wider adoption has been deterred by the ongoing perception that impact investing involves lower financial returns, can be complex to deliver, or lacks suitable investments. 

A shifting landscape 

The approach to endowment investing is evolving. An increasing number of foundations are looking at the impact of all their investments, recognising that what was once considered a niche approach is increasingly becoming part of mainstream institutional practice.  

Pension schemes and other asset owners are already pioneering this work. This development does not threaten the financial stability of organisations. Rather, it offers foundations the opportunity to align their investment approach with their charitable purposes whilst maintaining appropriate financial returns. 

Our work with the sector 

We work with multiple stakeholders across the endowments sector, including membership bodies and associations, endowed charities, investment consultants and legal experts, to address common myths about impact investing and provide practical tools to help more endowments invest with impact. 

It is a long-standing paradox that foundations give grants to achieve specific social or environmental objectives – yet their endowments are often not invested with those same objectives in mind. Our work focuses on 5 key areas: 

1. Endowments with impact support programme 

Our support programme equips foundation leaders with independent education, guidance and facilitation to explore whether impact investing can and should be a part of a foundation’s strategy and come to an internal collective view. 

Our support aims to help foundations move from asking “Should we deliver impact investing through our endowment?” to establishing an executive- and board-level impact investing vision aligned with their mission, along with a clear sense of how to execute. 

2. Practical guides

Our first practical guide supports foundations deploy impact investing strategies and mobilise more capital for good.

Our newest guide distils real-life experience into a practical roadmap for foundations to invest with impact and partner with the right advisers to achieve their goals.

4. Learning Hub

Our Learning Hub module Impact investing in the main endowment provides resources such as a selection of impact-enabling investment policy statements as well as networks and communities that trusts, foundations, and other endowed bodies may find helpful as they explore impact investing. 

5. Fiduciary duties guidance

Our paper Can Charities invest their Endowment with impact?, produced in partnership with specialist charity lawyers, demonstrates the compatibility of impact investing with the legal obligation on trustees to advance their organisation’s charitable purposes.