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ACF publishes new report on foundation investment

The Association of Charitable Foundations (ACF) has published a new report on how foundation investments can be more closely integrated with a foundation’s mission and grant-making.

Investment: The Pillars of Stronger Foundation Practice is the fifth report emerging from ACF’s Stronger Foundations initiative. It sets out seven characteristics of excellent practice, which include prioritising mission when setting investment objectives, holding investment managers to account, and seeking to influence the investment behaviour of others. 

Informed by 18 months’ gathering evidence, the report also emphasises the role of each and every trustee in engaging with the foundation’s investments, and seeks to demystify investments by providing clear explanations and examples. It also highlights the importance of seeking a wide range of views, ensuring diverse voices are heard and learning from peers in the foundation sector and beyond. 

It complements previous reports from the Stronger Foundations initiative which encourage foundations to consider using ‘all the tools in their toolbox’ to achieve impact. You can download previous reports here.

ACF Chief Executive Carol Mack said:

“Society is demanding ever greater transparency from institutions and asset holders, about the sources of that wealth and how it is invested and stewarded. New approaches to creating a sustainable economy are emerging and the climate crisis means action is both necessary and urgent. Foundations will need to move forward to avoid falling behind.

“Now is the time to take action. With this offering, we aim to show how foundations of any size can approach their investments with mission at the forefront of their thinking, whatever that mission may be. Thinking about investments is not the preserve of large foundations, nor of those trustees with specific expertise; it is relevant to all foundations looking to maximise the impact of their resources.”

Chair of the Investment working group Danielle Walker Palmour said:

“As UK charitable foundations, some of the most capital-rich organisations in the charity sector representing over £67 billion, the reality is that most of our assets are invisible, even to us. But investment strategy is integral to foundation strategy.

“As members of this working group, we have explored how investments can be brought into our strategic arsenal to be of true service to our missions. It is vital we engage with and shape that work to ensure it is consistent with our objectives.”

The pillars are that a stronger foundation:

  1. Understands that responsibility for its investments sits with each and every member of the trustee board
  2. Prioritises its mission when setting its investment objectives
  3. Engages with and holds to account those managing its investments
  4. Pursues transparency and responds to scrutiny
  5. Actively seeks a variety of research and views to inform its approach to investment
  6. Reviews its own time-horizon
  7. Seeks to positively influence the behaviour of others in relation to investments

Download the report here.

Please contact Emma Hutchins, Policy and External Affairs Manager, with any queries: emma@acf.org.uk.

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