(3 minute read)
Published: 30 September 2025
Written by: Alice Thornton, Head of Research and Impact
Earlier this year we published an updated version of our Investment Policy, which can be accessed by clicking here. This publicly available Policy outlines the agreed principles and practices underlying the investment of our circa £150m endowment, which is how we generate money to fund our grantmaking. Our Policy also sets out clearly our ambitions and intentions to make money in ways that are ethical and environmentally responsible.
Every year, we work with our Finance and Investment Committee to review and update the Investment Policy. We do this for a number of reasons, including to ensure alignment with our charitable mission and investment needs. We also update it annually to reflect the fact that our thinking on responsible and social investing is constantly evolving and progressing, and we want our Investment Policy to be an accurate and up-to-date reflection of the kind of investor we want to be.
This year, the most significant update we have made is to develop our first ever Social Investment Policy, which can be read by clicking here. This new Policy allows us to start building a new portfolio of social investments. In line with the Charity Commission’s CC14 guidance, we define social investment as “investing with a view to both achieving your charity’s purposes directly through the investment and making a financial return.” We have had a longstanding desire to become a social investor, and this is an exciting milestone that means we can now make this ambition a reality.
The key highlights of our new Social Investment Policy include:
- Social investment portfolio aim: Our aim in developing a social investment portfolio is to achieve greater impact with our funds than could have been achieved had we invested for financial returns and given this money out as grants. This means that we will take into account both the financial returns and the non-financial impact of each social investment opportunity, and consider whether these outweigh the value of grants foregone by not investing primarily for financial return.
- Social investment portfolio size: We intend to work towards investing approximately 10% of our endowment (currently equivalent to around £15m) in social investments over the coming years. We will develop more specific timescales for this ambition as we build the portfolio, but recognise that this type of investment is a long-term commitment and the full programme will take a number of years to build up.
- Impact of our social investments: We will make social investments that further our charitable aim to advance wellbeing for people, society and the natural world, and where the intended impact clearly aligns with the ambitions set out in our funding guidelines.
- Attitude to financial sacrifice: We will only make social investments where the intended social and/or environmental impact is greater than the opportunity cost of not investing for financial returns to fund our grantmaking. In other words, we will only make social investments where any financial sacrifice is outweighed by the value of the intended impact.
- Appointing a new social investment consultant: We intend to appoint a specialist investment consultant to advise us on developing a structured portfolio of investments in social impact funds forming approximately 75% of our total social investment portfolio.
- Governance and decision-making: The Policy also outlines how we will govern our social investments portfolio, and make decisions about which investment opportunities to pursue and ultimately commit capital to. Our Finance and Investment Committee will review social investment opportunities that meet our criteria and will make recommendations to our full Trustee Board for a decision.
Since this new Social Investment Policy was approved by our Board earlier this year, we have been actively looking for potential investment opportunities to start to build our new portfolio. To this aim we have regularly attended the Association for Charitable Foundation’s Social Impact Investors Group events, and are very grateful to peer Trust and Foundations who have generously provided support, advice and encouragement along the way. We’re also in the process of making our first social investment under this new Policy, and are excited to share more on that soon!
If you have any questions about our Social Investment Policy or our work in developing a new portfolio of social investments, please contact our Head of Research and Impact, Alice Thornton: alice@ellerman.org.uk