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The Law Commission is the statutory independent body created by the Law Commissions Act 1965 to keep the law under review and to recommend reform where it is needed. The aim of the Commission is to ensure that the law is:

  • fair
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  • as cost-effective as possible
 
Professor Elizabeth Cooke

Professor Elizabeth Cooke

Clarifying the legal framework for social investment by charities

We are pleased to announce the publication of our recommendations on social investment by charities as part of our ongoing project on selected issues in charity law.

Social investment provides financial returns while at the same time generating social benefits. It is an important and developing area for charities that helps them meet their charitable objectives by combining investment and spending.

We have been told that some charity trustees lack the confidence to make social investments because they are unsure whether their legal powers and duties permit them to do so. To clarify and simplify the law, we are recommending that charity trustees be given a specific statutory power to make social investments.

Law Commissioner Professor Elizabeth Cooke said: “Social investment represents a significant opportunity for charities, but the existing law is unclear. Our recommended reforms will clarify the law for trustees as to their powers and duties. They will make social investment more straightforward in law and give trustees the confidence to make the best of the opportunities it offers.”

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