Investing charity permanent endowments

The Charity Commission has published new regulations and guidance for trustees on adopting a total return approach to the investment of their charity's permanent endowment.

New legislation, which comes into effect on 1 January 2014, will amend the Charities Act 2011 and allow the trustees of permanently endowed trusts to adopt a total return approach to investment without seeking prior permission from the Commission.

The regulations set out the rules that charities must follow to adopt and operate a total return approach.

For permanently endowed charities, a total return approach means that all investment returns received are treated as a whole, and not labelled as either capital or income as they would usually be.

The trustees of charities which adopt the new power will be able to allocate the total return in the way they think will best further their charity's aims now and in the future. The aim of the regulations is to ensure that robust safeguards are in place to respect the principle of permanent endowment while allowing trustees the opportunity to take this new approach to managing their investments.

To download the guidance visit