The Charity Commission sets out in CC14 that Trustees "must use reasonable care and skill, making use of your skills and experience and taking advice when necessary".

CC14 also states: ‘the Commission expects all charities that make investments’ to ‘take professional advice before making and reviewing investments, unless you have a good reason not to’.

The Commission does not expect that charities with "limited, low value investments" will need to take external professional advice. As noted in CC14, the charity should 'keep a record of your reasons if you decide not to take external professional advice'.

The 'smaller charities that mainly invest cash' document explores when these charities might consider taking advice.

For charities with larger sums invested and using investment products beyond a bank account, common deposit fund or cash-like investments, it is likely that advice will be needed.

CC14 notes that 'professional advice should be impartial and given by someone experienced in financial and other matters relevant to your charity’s investment approach. Advice is usually given by:

• an investment manager or adviser
• a trustee or other individual with relevant experience and ability'

In practice, for charities with larger sums invested and using investment products beyond cash, trustees are likely to take advice from both internal and external individuals. Determining whether there is sufficient expertise internally and where external advice will be necessary will depend on the charity's context.

Internal: An individual with relevant experience and ability will typically be a trustee, or a member of the charity's investment committee. The trustee or individual should have a background in investment management or sufficient financial understanding (for example from running a business or working as an accountant) commensurate with the quantity and complexity of the charity's investments. If a trustee has a professional background in investment management and is giving advice to the charity they are responsible for the quality of that advice. Where advice is being given by a trustee, trustees/staff/committee members should follow CC14 guidance on Getting professional advice from a trustee. 
For more: see Principle 5 - recruitment

External: Advice given by an investment manager or investment adviser.

There are differences between advice given by an investment manager which will typically be restricted to products offered by the organisation and advice given by an investment adviser which will typically be across a wider range of products. Which type of advice is most suitable for your charity may depend on whether a trustee or other individual (eg committee member) with relevant experience and ability is available, and the quantity and complexity of the charity's investments. Advice may be given on an ongoing basis (for example where an investment manager runs a charity's investment portfolio on a day-to-day basis or an investment adviser selects and oversees a range of investment managers on the charity's behalf) or as needed (for example when appointing an investment manager or because trustees cannot agree on a course of action).

Where advice is being given by an investment manager, trustees/staff/committee members should determine whether that advice is independent or limited to the investment manager's own products, if advice is limited this should be recorded. Any professional advice received is formal, documented and that the individual or organisation providing the advice is responsible for the quality of that advice.

Guy's and St Thomas' Foundation (charity number 1160316)

Joseph Rowntree Charitable Trust (charity number 210037)

Charity Investment Consulting Partnership - Trustee guide to accessing Investment Advice

The amount to invest could include unrestricted funds, restricted funds, designated funds, endowment funds.

Reserves refers to unrestricted funds available for spending (not including fixed assets used to carry out the charity’s activities such as a building, or social investments). The Charity Commission's "Charity reserves: building resilience (CC19)" guidance states: "It is important for charities to have a policy explaining their approach to reserves. There is no single level or even a range of reserves that is right for all charities. Any target set by trustees for the level of reserves to be held, or decision that there is no need for reserves, should reflect the particular circumstances of the individual charity and be explained in the policy."

Funds that the charity might need access to quickly or on a particular date are typically held in cash or in investment products which mature (pay out returns) before the funds will be needed (for example certain bonds). This avoids the potential for needing access to the funds at a time when the value of the investment is lower than anticipated.

Where a charity is unlikely to need access to monies quickly, for example because a large quantity of funds are held or spending can be planned in advance such as for grant-making, then other investment approaches can be considered.

The amount to invest may affect the type of investment management available to the charity, with pooled funds having a low minimum investment (typically £1,000-£10,000) while a bespoke portfolio may have a higher minimum investment amount.

Restrictions on investments a charity can make may include:

• restrictions in the charity's governing document
• when a funder stipulates that funds must be held in cash whilst waiting to be spent on a project or deployed as grants
• restrictions on particular asset classes set by the trustees or committee

A charity's financial needs will depend on its context. For example, some charities will have set spending commitments based on their activities, others will spend depending on the monies available; some charities will use the financial returns from their investments to fund their charitable activities, others will hold investments as reserves to ensure the sustainability of the charity's operations rather than seeking financial returns to spend on charitable activity.

Trustees/staff/committee members should have a clear understanding of which financial needs must be met from returns on the charity's investments.

Financial targets for a charity's investments will be based on both the charity's financial needs and the charity's risk appetite.

Multiple factors may go into deciding the charity's financial targets, these factors might include:

• setting a target for income (an amount in pounds) or capital growth (as a percentage of existing assets)
• setting a target based on the charity's spending (eg grant distribution rate, spending on charitable activity funded by returns on the charity's investments)
• whether the charity is seeking to maintain nominal or real value or to grow the assets over time, this will affect how inflation is considered in relation to the investments

Once trustees/staff/committee members have set a financial target, taking advice when necessary, investments can be identified, within the charity's risk appetite. For both pooled funds and bespoke portfolios there will typically be a target for performance (eg X% + inflationary measure) and a comparator benchmark which indicates how the investments are performing against other investments with similar aims. A common deposit fund will usually target a financial return higher than that which could be achieved on cash in a bank account but may not have a specific target.

Association of Charitable Foundations - For Good and Not for Keeps (spending by endowed foundations)

Investing for Charities by James Brooke Turner, published by the Directory of Social Change

How these periods are defined will depend on the charity's context, including the scale of the charity's investments. If large quantities of reserves are held over multiple years then there will be opportunities to consider longer-term strategies.

Consideration can also be given to the implications of the different time horizons of those involved in investment decision-making at the charity. For example, the charity may have a 100 year plus time horizon, while trustees and investment committee members serve for a maximum of 9 years, and meetings are held quarterly to discuss investments. Establishing organisational investment beliefs (for example whether to hold shares over the long-term with the goal of riding out volatility to increase potential returns), can help to ensure the investment strategy doesn't change dramatically when trustees or investment committee members change.

Examples might include:

Short term

• monies held to ensure the ongoing viability of the charity and for specific upcoming projects, held as unrestricted, designated or restricted funds.

Examples:

• 6 months operating expenses; cash to pay grants which have been committed; monies for an upcoming project; grants or flow-through funds received where it is stipulated that they are to be held as cash

Typically invested:

• held as cash in a bank account, in a common deposit fund or in a cash-like investment
• if a charity knows when it might need to access funds, for example for a specific project, then a bank account with a notice period or a bond with a fixed end date might be explored to achieve higher returns

Medium term

Examples

• monies held in an expendable endowment with an intention to spend down over a set time period
• reserves which may need to be called upon in times of demand

Typically invested:

• bonds with fixed returns, cash-like investments, low volatility assets

Longer term

• monies held in a permanent endowment or in an expendable endowment with the intention to exist over the longer-term
• reserves which are likely to be held over a longer-time period or on an ongoing basis

Typically invested

• in a portfolio made up of shares (which have been shown to out-perform other asset classes over the long-term), alternative assets and bonds

• those overseeing the investments may use a medium-term horizon for planning purposes, for example three year spending commitments or targets for investment managers

Liquidity refers to how easily an investment can be converted into cash. Understanding a charity's 'liquidity needs' involves understanding how much money a charity might need over the short and medium term.

Typically where a charity is willing to accept higher risk or higher volatility, returns will be higher over the long term.

Risks which need to be considered and balanced include:

• if a charity needs access to funds quickly there is a risk the charity might need to sell assets at a lower value
• if a charity keeps all its funds in cash or cash-like products it will typically lose out on higher returns over the long term

Trustees must consider the effect of different time frames and ensure their investment strategies can meet the charity’s operational plans. Charities with a long-term time horizon can put in place strategies to manage volatility, for example moving funds to cash or cash-like products to meet upcoming spending commitments.

Income-only means that the charity is only spending income generated from the portfolio, for example interest on cash in a bank account or dividends on shares. A total return approach allows the charity to withdraw capital gains and income. Trustees/staff/committee members should understand which approach is most appropriate for their charity's circumstances, and take external advice if needed. Charities with a permanent endowment have specific rules to follow when adopting a total return approach (see below).

Risk appetite will depend on a charity's context. A charity holding reserves with incoming funds which can vary widely will need to take lower risks than a charity holding a large endowment. A charity's risk appetite will depend on what is required from the investments, for example maintaining the value of a small quantity of reserves will demand a different risk approach to maintaining the value of a large expendable endowment.

All trustees should have a basic understanding of the charity's financial position and resulting risk appetite, those trustees/staff/committee members with financial understanding or investment expertise and/or the charity's investment managers or investment advisers can provide information and support to help trustees achieve a basic understanding. Agreeing the charity's risk appetite in advance, for example by how much an endowment can be below its real or nominal value and over what time period, will help to avoid rushed and potentially poor decision-making during times of financial turbulence. The charity's risk appetite should be recorded in the investment policy which is approved by all trustees. Where applicable the risk appetite should be reviewed by the charity's Audit & Risk Committee or equivalent.

Whilst many charity trustees may be keen to select the lowest risk options, for charities holding reserves or an endowment over a long time period, this will likely result in the investments being worth less over time as inflation will be higher than returns. Ensuring all trustees have a basic understanding of the charity's financial position and resulting risk appetite will enable informed discussions. Risk appetite means acting with intentionality in regard to risk, being confident that investment managers or investment advisers are actively managing risks on the charity's behalf.

Diversifying investments, for example by holding different asset classes such as bonds or alternative investments alongside shares, can help to manage risk. Where a charity has a substantial holding in one asset, for example a large donation of shares in one company, the impact of this on the charity's diversification approach and risk appetite should be managed.

In most instances trustees/staff/committee members will need to determine which investment approach best suits the charity's risk appetite, for example assessing the risk levels of different pooled funds or choosing whether to keep investments in cash or cash-like products or to invest in other asset classes. Charities may seek advice, in particular if there is not sufficient expertise among the trustees/staff. 

For trustees/staff/committee members exploring and determining the charity's risk appetite, factors to take into account include:

• understanding the balance between risk and likely financial returns over time
• the interplay between risk and longevity, for example how a long time horizon presents opportunities to increase risk appetite and potential financial returns
• liquidity risk, if investments are more illiquid (take a long time to turn into cash) and the charity suddenly needs access to the money this could prove difficult
• setting risk parameters, for example will risk be assessed in absolute terms (for example 'the portfolio should maintain a minimum of 90% of real value') or relative to an index (for example '90% of UK bond market risk)
• using external ratings agencies to assess the risks of different asset classes and investments
• inflation risk, as a general rule where investments are held in lower-risk assets (eg cash) the financial returns are less likely to beat inflation over time, resulting in a lower real value over time- the different risk profiles of different asset classes (for more on this see asset allocation below)
• environmental, social and governance (ESG) risks, for example companies with poor environmental or human rights practices are likely to perform worse over time
• risks associated with investments which conflict with the charity's purposes or pose reputational risks

For more on risk appetite in relation to social investments, see Responsible, Impact and Social Investment

Asset allocation is how investors divide their portfolios among different assets for example shares, bonds, alternative assets and cash. Investors ordinarily aim to balance risks and rewards based on financial goals, risk appetite, and time horizon. Examples include:

• a charity that knows when it will need to spend money, for example a charity with reserves which might be called on or funds for a specific upcoming project, might opt for an asset allocation featuring cash and bonds.
• a charity with a long-term time horizon or with substantial investments and the ability to take risks in order to achieve higher financial returns, will be more likely to put a higher proportion of investments into shares

Different assets behave in different ways, for example some might offer lower income and higher capital growth, some will offer fixed terms and others fluctuate.

Trustees/staff/committee members responsible for investment oversight, taking external advice where needed, should determine an asset allocation appropriate to the charity's financial goals, risk appetite and time horizon which is then discussed and approved by all trustees and recorded in the investment policy. The asset allocation will likely have ranges, for example 65-85% in global shares, and the investment manager or investment adviser will be able to make investment decisions within that range. The asset allocation is also likely to include limits on excessive concentration in a single asset class or particular investment. If trustees/staff/committee members determine that a different asset class would be appropriate to the charity's context, this needs to be discussed and approved by all trustees and recorded in the investment policy.

Trustees/staff/committee members should ensure they have sufficient understanding of the asset classes proposed by the investment manager or investment adviser, including the liquidity, costs and any potential reputational risks associated with different asset classes. Some assets, for example cryptocurrency are unlikely to ever be suitable for charity investments.

If a charity is investing via a pooled fund then the fund will have ranges for the asset allocation, trustees/staff/committee members should ensure the range is suitable for the asset allocation appropriate for the charity.

Setting an appropriate asset allocation, which is understood and approved by all trustees, is an important part of ensuring sufficient diversification within the investment portfolio.

Trustees/staff/committee members should ensure there is a clear process for signing off stewardship and engagement activities. Turnaround on some activities may be tight so the process should include flexibility for a nominated individual to sign off on specific activities without needing approval from the full committee/board, and clear parameters for which activities need sign-off.

All charities holding investments can take a total return approach, charities with a permanent endowment should follow the Charity Commission's guidance.

There are a range of opportunities available to those charities with permanent endowment, these include:

• adopting a total return approach, whereby the charity spends both capital gains and income from investments, provided the original value of the endowment is maintained
• review whether to maintain a permanent endowment, charities are able to spend some or all of a permanent endowment for example if the needs which the fund was set up to support no longer exist or could be met in a more effective way. The Charity Commission will have to give permission for permanent endowment funds to be spent if over £25,000 is held.
• borrowing up to 25% of the permanent endowment, this is typically done to meet immediate needs with a plan to repay funds from, for example, future fundraising or investment returns on the remaining endowment
• transferring permanent endowment to another charity with similar purposes, for example if that charity might be able to meet the objectives of the permanent endowment more effectively

Determining the value of permanent endowment: St John’s Foundation (charity number 201476): “The Charity adopted a total return method of accounting from the 1st of January 2013. On this date the initial value of the unapplied total return was £45.5m and the core capital endowment was valued at £35.0m. In arriving at these values, the trustees used the indexed values [the current value of the properties] of the permanent endowment at 1 January 1995 to represent the preserved value of the original gift.”

Taking an ‘income-only’ approach: Cripplegate Foundation (charity number 207499): “Under the terms of the Foundation’s governing scheme, Governors [equivalent to Trustees] may only spend the income of the permanent endowment fund and may not expend the capital. [The] permanent endowment fund...is the fixed capital of the Foundation, which is invested in investments and property. The income is available for general use, but the capital may not be spent, except for investment management costs expended on portfolio management and administration, and governance and support costs specifically attributable to investment assets... only the income may be spent, and the capital is not to be touched except to change the disposition of assets."

Taking a ‘total-return’ approach: Trust for London “is authorised by the Charity Commission since 2002 to pursue a total return approach to investment of the Trust’s permanent endowment assets. The total return approach enables the Trust to supplement its expenditure of income with a proportion of the capital gains that have accumulated over time. This also requires a duty to both present and future beneficiaries. In recognition of that duty the Trustees have since 2010 operated a policy that seeks to maintain the ‘real spending power’ of its 2002 investment assets. Trustees aim to maintain the value of the endowment assets within a corridor of +/- 20%”. On 10 November 2003, the Charity Commissioners authorised the Trust to adopt a Total Return approach to the management of its investment portfolios. On 1 January 2003 the Trust adopted this approach and selected 31 December 1942 as the reference date from which the permanently endowed funds have been analysed between the trust for investment and the unapplied total return, the two components of a permanent endowment specified in the Charity Commission’s regulations. Under the total return approach, the Trust is permitted to allocate from the total return element of permanent endowment to the trust for application (income) such sums as it thinks appropriate in furtherance of its work providing it undertakes prescribed tasks. These tasks are essentially to exercise its statutory duty to be even-handed as between present and future beneficiaries, to maintain the balance of the unapplied total return at such a level that it will remain positive considering the volatility of investment markets and to take such professional advice as it considers necessary in the exercise of these responsibilities. The Trust’s strategy is to manage the endowment effectively in order to maximise the amount available for distribution whilst maintaining the real value of the Trust’s permanent endowment."

The Charity Commission expects all charities to have a written investment policy (for some charities this will be a legal requirement or required by the governing document).

For smaller charities that mainly invest cash in a bank account, the investment policy may be included within an existing reserves or financial controls policy. For more information, see smaller charities that mainly invest cash.

For larger charities, see CC14 and investment policy example for more information on what to include and examples of investment policies from other charities.

The investment policy serves to:

• record the charity's intentions in relation to investments, as approved by the board
• give instructions to the charity's investment manager or investment adviser, including targets for performance and approach (eg risk appetite, asset allocation).

The policy should be reviewed every 4-5 years (typically in line with a review/retendering for professional providers) and whenever there have been substantial changes to investments.

Charity Finance Group / Charity Investors' Group - Writing your charity's investment policy

Investing for Charities by James Brooke Turner, published by the Directory of Social Change

The advice needed will depend on the proposed complexity of the investments. For a charity with limited investments that mainly invests cash, there may be sufficient financial skills within the staff or trustee board based on their personal or professional experience.

If the charity has investments which are substantial or complex, additional expertise may be needed to ensure the terms of the investment policy are workable and achievable. This advice could be given by a trustee/staff/committee member with relevant investment expertise, or by a professional investment adviser.

Where a charity is consulting with an investment manager on whether the policy is workable and achievable, trustees/staff/committee members should be aware of whether the investment manager is able to offer independent advice or, for example, can only offer advice based on the manager's own investment products.

Advice can be given by the charity's existing professional provider but should be considered objectively, with consideration given to whether independent advice is required.

Consideration should also be given to how elements of the policy aiming to avoid conflicts with the charity's purposes and reputational risks, and/or to further the charity's purposes beyond financial returns will be developed, for example seeking input from those with expertise in the charity's purposes.

For smaller charities the investment policy is likely to interact primarily with the reserves policy.

For larger charities, a number of policies may interact with the investment policy, for example policies on:

• reserves
• treasury
• modern slavery
• anti-bribery
• anti-fraud
• tax strategy

for choosing a bank account provider, see Charities that mainly invest cash - choosing an account.

• will the product deliver a financial return in line with the charity's targets
• are there any responsible investment considerations in relation to conflicts with the charity's purposes or reputational risks (link to Principle 3) - fees and charges

When selected, a contract/letter of engagement is in place for any product chosen.

For charities intending to invest in shares or other products beyond cash, there are options to pursue passive or active management. Typically charities investing via a pooled fund or bespoke portfolio with an investment manager or investment adviser will be seeking active management in the hope of financial out-performance and/or to use responsible investment approaches. A passive approach may be suitable for those charities keen to reduce fees and charges, and with sufficient expertise among trustees/staff/committee members.

Trustees/staff/committee members, taking external advice if needed, review the aims of the scheme and how it fits with the charity's investment policy and approach, including:

• the financial targets for the fund, and whether the risk approach and asset allocation meet the charity's requirements
• how quickly the charity can withdraw funds if needed
• how the manager undertakes responsible investment practices (eg divestment, exclusion, screening, stewardship and engagement) and monitors ESG factors with a view to managing risk and strengthening financial performance
• whether responsible investment practices undertaken by the manager will ensure the fund is suitable in relation to conflicts with your charity's purposes or reputational threats
• whether there are opportunities to influence the practice of the fund, for example feedback or client survey opportunities
• reporting arrangements for the fund
• fees and charges
• actions taken by the manager in relation to EDI
• depending on the size of the potential investment, representatives from the pooled fund are asked to present to and answer questions from those trustees/staff/committee members involved in the tender process
• consideration is given to whether investments should be concentrated with one provider (which may have administrative advantages at smaller investment sizes) or across a number of providers. Where a number of providers are used, consideration is given to differences in investment approach which will provide diversification. When selected, a contract/letter of engagement is in place for any product chosen.

A range of surveys comparing the performance of pooled funds are available, these look at performance both in terms of financial returns and responsible investment factors. Examples include:

EIRIS pooled funds survey

Charity Finance Magazine - Charity Pooled Funds Survey

Charity Intelligence Funds performance review

Trustees/staff/committee members request proposals from a range of investment managers or investment advisers. The proposals should include how the investment manager or investment adviser would intend to achieve the requirements set out in the charity's investment policy, including:

• the financial targets and risk appetite, and whether these can be achieved within the charity's proposed asset allocation (or a proposal for the asset allocation)
• the proposed liquidity (how quickly the charity can withdraw funds) for the portfolio
• how the provider intends to undertake responsible investment practices with a view to furthering the charity's purposes, avoiding conflicts with the charity's purposes and reputational risks, managing risk and strengthening financial performance. In cases where the provider is an investment adviser or an investment manager investing into other underlying funds, what they will be responsible for and how they will ensure compliance from any underlying managers
• reporting arrangements
• fees and charges, analysis should be informed by market comparisons and an understanding of the approach (eg building in effective responsible or impact investment)
• actions taken by the manager in relation to EDI
• can the provider offer independent advice or are they restricted to their own products and services
• depending on the size of the potential investment, representatives from the provider are asked to present to and answer questions from those trustees/staff/committee members involved in the tender process
• consideration is given to whether investments should be concentrated with one provider (which may have administrative advantages at smaller investment sizes) or across a number of providers.

Where a number of providers are used, consideration is given to differences in investment approach which will provide diversification.

A formal contract is signed (see below).

If the charity does not have sufficient expertise or capacity among the trustees/staff/committee members to assess responses to the tender process then additional advice is sought, for example from a co-opted volunteer with suitable expertise or an independent paid investment adviser.

There have been examples of public tender processes, designed to improve transparency and learning around charity investments:

ESG Olympics

EIRIS Foundation

Involving trustees and staff beyond those with investment responsibilities can help to ensure the charity's purposes are placed at the forefront when selecting a professional provider. Additional resource might include working with an individual or organisation providing investment advice to help with short-listing, comparing and selecting a professional provider.

Trustees/staff/committee members, taking advice where needed, will typically set a target/benchmark(s) based on the expected financial performance of the investment manager or investment adviser. This might be based on:

• a target return plus an inflationary measure (eg 4% return + RPI per annum over 5 years) to meet financial needs and maintain the value (real or nominal) of the investments
• a target return based on financial needs without an inflationary measure
• a target for income and/or capital growth
• comparison to performance of similar portfolios in the ARC indices or other composite benchmarks

In addition to looking at the financial performance, trustees/staff/committee members should also consider whether they feel the providers strategy, advice, reporting and explanations are meeting their needs.

For a pooled fund, the target for the fund will be determined by the investment manager, so trustees/staff/committee members should ensure it meets their requirements. For a bespoke portfolio, the target can be set in line with the charity's requirements.

Where under-performance occurs, trustees/staff/committee members should actively monitor this. There may be external factors which explain the under-performance (for example economic shocks affecting the broader performance of investments). Taking action with undue haste (for example after one quarter of under-performance) may be detrimental over the longer term. By actively monitoring performance, trustees/staff/committee members can identify where under-performance is likely to be ongoing and unlikely to correct, and take action accordingly, for example bringing forward a review of professional providers.

Trustees/staff/committee members should not lose sight of the need to assess investment managers and investment advisers against the broader investment policy. For example, reporting and interrogating use of responsible investment approaches and EDI considerations. Trustees/staff/committee members should also take reasonable steps to understand how the investment manager has voted on the charity's behalf. A broader cross-section of trustees or staff with expertise in the charity's purposes may be needed for this review.

Where a charity is using an investment adviser to manage the investment portfolio, the adviser will select managers and provide reporting and monitoring on the charity's behalf. Trustees/staff/committee members should have sufficient understanding of the adviser's approach and parameters for performance management (financial, broader performance and responsible investment/EDI) to ensure the investments are meeting the objectives of the investment policy and are suitable for the charity.

Trustees/staff/committee members should feel confident comparing performance with other asset owners. For example:

• in networks run by Charity Finance Group or the Association of Charitable Foundations
• contacting charities of a similar size or investment approach to compare

It should be noted that due to the time lag, reporting of investment performance in a charity's annual accounts is not current performance.

Trustees/staff/committee members may typically receive quarterly reporting and meet with the investment manager or investment adviser on an annual or bi-annual basis. Monitoring of investments may include:

• whether investments are within the charity's asset allocation and risk appetite
• any changes to the external environment which may affect financial returns or risks, or lead to adjustments in the asset allocation

Trustees/staff/committee members, and any external advisers, should discuss in advance how they intend to deal with any changes, with parameters for at what point action may be taken (for example financial under-performance significantly below the benchmark for four consecutive quarters). Changes to the external environment do not need to lead to abrupt changes of approach, if appropriate asset allocation, risk appetite and financial returns targets have been set then the investment portfolio should be able to tolerate reasonable volatility.

The full trustee board should receive regular updates from those trustees/staff/committee members tasked with delegated responsibility for overseeing investments. This might include a quarterly written update and a more fulsome annual presentation. Any updates should be accessible to all trustees, and additional support should be offered where needed to ensure sufficient understanding to comply with the trustee duty of overseeing investments.

In addition to the reporting and monitoring outlined above, retendering for investment managers or investment advisers every 4-5 years will allow trustees/staff/committee members to:

• assess performance of the provider over a sufficiently long time period
• ensure an appropriate level of fees and charges are being applied by comparison with other providers
• assess different proposed approaches against each other

In advance of any retendering, the delegation framework and investment policy should be reviewed.

Trustees/staff/committee members need to set expectations, for example how far in advance of meetings do documents need to be received. Where a provider has a set reporting schedule, for example in a pooled fund, meetings may need to be set in line with the reporting schedule. Where trustees/staff/committee members have limited investment expertise or expertise in the charity's purposes, how to ensure reporting is accessible to both groups. Mechanisms should also be in place for interim reporting where there are material changes to the investments, for example a fall in financial performance or a significant change within the asset allocation.