An essential ingredient in charity fund management
Many charitable objectives have investment implications and a growing number of charities want to invest in line with their mission.
Demand for responsible investment from the charity sector is growing. A 2009 survey conducted by the EIRIS Foundation and the Charity Finance Directors' Group showed that 45% of charities have an ethical investment policy.
Failing to align a charity’s investment in line with its mission can cause reputational risks for the charity and this can alienate supporters and donors. Charities are also becoming increasingly interested in which ESG factors can help managers control risks or seek out opportunities, and whether shareholder engagement might further their causes.
The EIRIS role
EIRIS provides a range of products and services to help charity fund managers develop responsible investment solutions which meet their clients’ needs. We also have considerable experience of helping fund managers translate a charity’s ethical investment policy into a practical, workable responsible investment solution.
The EIRIS Foundation is itself a charity and has supported a charity project (www.charitysri.org) to provide detailed guidance to trustees, managers and owners in this area. EIRIS was originally created 25 years ago by a group of churches and charities who needed the kind of information we provide.
Building your business
Ethical or responsible investment is increasingly important to charity investors. Fund managers need to position themselves as ready and willing to support those trustees wishing to invest responsibly. The particular complication for managers is that such policies are quite rightly driven by a charities particular mission, and those missions are very diverse. It follows that managers need to offer tailored solutions, or else to be clear about the needs of particular groups of charities in their target audience. As people become aware of more ways in which ESG factors can identify risks and opportunities, all charities will increasingly expect managers to be able to explain how they integrate these factors into their investment process.
The way forward
Charity fund managers may work with EIRIS for a range of reasons:
- To create specific funds for groups of charities
- To provide segregated portfolio is to larger charities
- To support engagement which creates value or perhaps which advances a charitable cause
- To help trustees assessed pooled funds
For more details of how we can help please contact our client team
