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Smaller Charities
How can CB Financial Limited help smaller charities?
For the smaller charity help with investment choice and options is required, as these specific skills are seldom held in-house. Many smaller charities simply invest in ‘cash’ (or deposit funds) and their aim is to get the best rate of interest possible.
CB Financial Limited can help source the best terms for ‘cash’, but we also like to go through the process of checking and developing the Reserves Policy with the Trustees and make sure that a suitable Investment Policy is in place.
The Trustees will need to consider future beneficiaries as well as the present ones, and it may be appropriate to carry out a review of moving ‘cash investments’ to longer term active investments to provide a greater return.
Typically, many charities aim to return 3½% above ‘cash’ in this type of situation. This obviously involves risk, and this needs to be analysed in the context of your particular charity. The Trustees should carry out this Investment Review to ascertain their position. Sometimes it may result in remaining in ‘cash’, but the situation needs to be considered. CB Financial Limited can help provide a study for your individual charity.
In the long term various studies have shown that Equities have performed nearly at twice the level of cash, so the question is, should Trustees take some risk to improve long term returns for the greater good of the charity? This needs to be weighed up.
