Charity Commission publishes regulations and guidance on investing permanently endowed funds on a “Total Return” basis

The Charity Commission has now published The Charities (Total Return) Regulations (2013) (the “Regulations“). The Regulations amend the Charities Act 2011 to permit trustees of permanently endowed charities to pass a resolution to adopt a total return approach when investing their charity’s permanently endowed assets, without first seeking a “Total Return Order” from the Charity Commission. A total return approach is when trustees apportion, from a combined pool of capital growth and income, how much of the total return generated should be added to the fund’s capital and how much should be classed as income to be spent by the charity on its charitable purposes. The Charity Commission has also published accompanying guidance for trustees, in response to concerns raised that the Regulations were too complex. The Regulations come into force on 1 January 2014. To view the Regulations and Guidance please click here. IBB Solicitors’ specialist Charities team has over 50 years’ combined experience in delivering practical commercial advice to charities and not for profit organisations and those who work with them. For advice, contact a charity lawyer. Call us on 08456 381381 or email charities@ibblaw.co.uk.