How we helped a charitable foundation manage its investments for long-term impact

Getting to know the charitable foundation

This long-established charitable foundation awards financial grants to groups and organisations that often struggle to secure funding. With around £25m in assets and no reliance on public donations, its ability to make a difference depends on careful stewardship of its investments, balancing long-term income, capital preservation and the trustees’ evolving ethical priorities.

Because the charity funds all its grant-making from investment income alone, the portfolio plays a central role in its mission. The trustees need that income to be dependable enough to support the annual grants, while also ensuring the capital grows over time and keeps pace with inflation.

Over time, they have also introduced ethical preferences reflecting the foundation’s values, reviewing income expectations, portfolio positioning and ethical exposure several times each year.

Why the trustees reviewed their charity investment strategy

The foundation came to us after a difficult period during the Global Financial Crisis, when its previous investment approach exposed it to more risk than the trustees had fully appreciated. The resulting losses were unsettling and prompted a wider review of how the charity’s assets should be managed.

What mattered most was rebuilding confidence. The trustees wanted greater transparency, stronger capital preservation and a clearer understanding of how portfolio income would translate into the charity’s grant-making capacity year after year.

More recently, that challenge has evolved again. As the trustees’ ethical priorities have developed, they have needed support in reflecting those values in the portfolio without putting income, resilience or long-term stability at risk.

Our charity investment management solution

We worked closely with the trustees to build a tailored charity investment management strategy around three priorities: creating a sustainable income stream, preserving and growing long-term capital and aligning the portfolio more closely with the charity’s values.

Because the foundation has a very long-time investment horizon, we were able to position the portfolio for growth while keeping income reliability at the heart of the strategy. This was especially important because the trustees set annual grant budgets using forward income projections, so they need confidence in what the portfolio is likely to deliver.

We built a diversified charity investment portfolio across different assets, designed to provide a resilient income stream while helping to manage volatility. During more challenging periods, such as the COVID-19 pandemic when dividends came under pressure, that ongoing guidance became even more valuable.

As the trustees’ ethical preferences developed, we helped them adapt the portfolio carefully and thoughtfully. The foundation had already excluded armaments investments (such as defence company stocks), but over time this expanded to also exclude sectors such as mining and tobacco, areas that had historically contributed meaningfully to income. Rather than making sudden changes, we took a measured approach, introducing alternative assets and sectors that could help replace some of the defensive and counter-cyclical characteristics those holdings had previously offered.

We also provided independent analytics and regular investment reporting so the trustees could clearly see how the portfolio compared with broader market exposure from an ethical perspective. Throughout, the aim was to show that responsible investment decisions did not have to come at the expense of performance, income sustainability or good governance.

What happened next: supporting grant-making with a resilient charity investment strategy

The foundation now benefits from a more resilient and transparent investment strategy that supports its grant-making with greater confidence. Income has grown over time, capital has been preserved and the trustees feel better able to balance financial stewardship with the values that sit behind the charity’s work.

Keeping in touch: ongoing investment reporting for trustees

We continue to meet the trustees three times a year to review the portfolio, monitor income expectations and discuss ethical exposure. Over time, our reporting has become more streamlined, giving them the clarity they need to stay focused on the foundation’s purpose and the communities it supports.