The Fundraiser - Practical advice and insight for the charity sector

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Are charities justified in investing?

Traditionally, investment has been synonymous with big business and the negative aspects of a struggling economy, but many would argue itís a legitimate way to increase funds for good causes too. We took to the streets and found a surprisingly mixed public perception


Marco Filho, 30, airline attendant

I always thought that they just send it straight to the people the charity works for, but if they can invest it, I think itís a good idea. At the moment I donate to children in Africa but at the same time I used to think maybe it was a good idea only to help those people with the money that they are donated. Actually I would be more likely to donate to a charity that had plans to invest for the good of those people, it wouldnít put me off at all.

 

Rowena White, 29, management consultant

Itís a good idea if they end up with more money in the end to be able to invest again. Itís not something that turns me off charities at all. If it provides more money for them to meet their charitable objectives, then itís a good thing. I donate to Cancer Research UK and Macmillan through payroll giving and as long as it was only a proportion, not all of it, that they wanted to invest I would be happy with that. I would want to know they werenít high-risk investments though.

 

Filipe Rios, 25, car designer

I like social enterprises because you know exactly what they are trying to do. Iíve lived most of my life in Africa and my mum works for NGOs. She goes to townships and teaches people one to one and I respect that work, because I can see what comes from it. In a way itís contradictory of me to support it because I know she is paid well to do it, but I know the effect has been that neighbouring communities see the change she has helped to bring about and ask for the same help.

 

Simon Moore, 27, physiotherapist

It seems counter-intuitive Ė obviously the whole point of charities is to raise money for a certain cause. If I was to donate, I would expect it to go straight to the cause. It seems that most of the money doesnít get to where they say it is going. It depends on what you expect and what the money might be invested in. If it produces a better impact for beneficiaries, I would support it but you need that communicated. You need proof.

 

Lizzie Allinson, 35, PR and marketing officer

Charitable investing is a good thing as long no unnecessary risks are taken with the funds raised. The charity must also have signed up to an ethical investment policy. It means there are certain exclusions to companies that can be invested in, such as those involved with alcohol and tobacco production, gambling, pornography and armaments. The charity has a responsibility to its beneficiaries as well as its fundraisers to behave ethically with the funds raised.

 

Want to reassure your donors? Read our 5 tips for explaining a financial investment strategy to supporters.

 

This article first appeared in The Fundraiser magazine, Issue 7, July 2011

 

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