Value of charities’ investable assets improves, study shows
Melanie May | 21 November 2024 | News
The value of charities’ investable assets has stabilised and, in some cases, improved over the last 12 months, research from wealth manager Rathbones shows.
Its study of senior executives at UK charities with a collective £4.074 billion of stock market related investments found nearly three quarters (73%) say the value of their investable assets has increased over the past two years. Around a quarter (27%) say the value has stayed the same.
This time a year ago, nearly two out of three (65%) said the value of their investable assets had dropped between 2021 and 2023, with 23% saying the value had dropped dramatically.
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Forced sales & poor investment decisions
The biggest reason for this drop in value was forced sales to enable charities to maintain services. 64% of those questioned said their organisation had cashed in or sold investments to compensate for a drop in income due to the impact of the cost-of-living crisis and the pandemic.
However, nearly a third (31%) blamed poor investment management decisions while 53% said the value of assets had been hit by stock market conditions. Around 58% said the income they earned from their investments had dropped, forcing them to cash in on assets to compensate while 41% said increased demand for their services had forced asset sales to provide funds.
The study found a range of opinions with investment management advisers – around a fifth rate the service they receive as average, around half rate it as good, and almost a quarter rate it as excellent. However, only one in six say the information they receive from advisers is ‘very easy’ to understand.
The key area of concern however is how consistently investment management advisers meet the ethical concerns of charities – 40% are very concerned about advisers’ ability to meet their ethical concerns while 58% are quite concerned.
Andy Pitt, Head of Charities at Rathbones said:
“The views on the quality of advice being received are concerning, particularly at a time when income is being squeezed and investments are playing a crucial role in underpinning charity services. The strength of the relationship between charity and investment manager has never been more important, as we help our trustees navigate through a challenging period and help them create a strategy that can meet their financial goals now, whilst also balancing the needs of the future.”
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About Melanie May
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 thepurplepim.com.