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‘Bruising’ year for charity investments, survey finds

‘Bruising’ year for charity investments, survey finds

A third of charities (34%) questioned in a recent survey have seen a performance reduction in their investment portfolio’s value in the year to 31 March 2020.

According to the 2020 Newton Charity Investment Survey, it has been a ‘bruising year’ for charity investments, with this the highest proportion to see a decline since the survey started in 2014.

This year’s survey sample included 114 charities with over £6bn in investment assets. The average charity has mean assets under management of £54m, down from £137m in 2019 while median charity has assets under management of £8m.

Median performance gain in investment portfolio values fell to 2%: down 3% on 2019. But, according to Newton Investment Management’s report, this could be a short-term shock, with 2020 not dissimilar to the year of the UK’s Brexit referendum (2016) in terms of charities’ investment performance.

However, the economic uncertainty brought by the pandemic has also resulted in a lowering of expectations in terms of investment portfolios, with almost two thirds (63%) of the charities surveyed anticipating returns of below 6% on their investments over the next 3-5 years – up 12% on 2019’s figures. No charities in this year’s survey anticipate annual returns of greater than 12% in the next 3-5 years.

There has also been a sharp increase in charities taking out only a very small proportion of their investment portfolio to spend: 27% stated that they take out less than 1% of their portfolio to spend each year, up from 17% in 2019.

Overall, 30% said the pandemic had affected their future investment strategy, with the vast majority (88%) of those anticipating a drop in this income. Just over half of these are re-evaluating their reserves policy while 27% have seen changes to spending levels from their investment portfolios, with 18% increasing spending and 9% reducing it.


Pandemic’s impact on other activities

According to the Newton Charity Investment Survey, only 6% of charities say the pandemic has had no effect on their activities. Over half of those surveyed (59%) have seen an impact on their fundraising activity with 81% of those affected seeing it decrease and 79% having had to cancel or postpone big fundraising activities.

The impact on fundraising has been particularly pronounced among larger charities – 100% of those with assets over £101m have seen a decline in fundraising, compared to 51% of those with assets under £20m. In addition, 86% of the largest charities have had to cancel or postpone big events compared to 49% of the smallest. However larger charities were more effective at gaining government funds to support staffing costs at 57% versus 42% of those with assets under £20m.

The survey results also reveal that 56% overall have had to lay off or furlough staff with 52% having to cease some operations.

On a more positive note, the survey also shows a move towards more equal representation in terms of age, gender and race. Female representation on trustee boards has risen to 44% – up 7% on 2018’s previous high of 37%. The proportion of individuals on trustee boards that are black and minority ethnic is now at 12%.

Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via

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