1. Introduction

What this Guidance covers

This Guidance sets out some of the key points to consider if your charity has investments or is thinking about investing and how your duties as charity trustees apply. It is intended to help charity trustees feel confident and informed as they approach this aspect of their charity’s finances. It is not detailed guidance on all the requirements of the Charities and Trustee Investment (Scotland) Act 2005 (the 2005 Act), but should help you make decisions about your money today and in the future, keeping in mind the duties of charity trustees. 

Legal requirements are something that the law says you must do and are highlighted by the ‘Legal Duty’ icon:

Good practice is not required by law but is something you could do to help make sure that your charity is doing its best to comply. What is good practice for your charity might depend on the size or type of charity you are. Examples of good practice are highlighted by the ‘Good Practice’ icon:

What this Guidance does not cover

This Guidance is not intended to provide detailed guidance on investments and finance.  It does not constitute investment advice and does not cover the tax implications of investments. Charity trustees should always take appropriate advice where necessary – see sources of help and advice.

What this Guidance does not cover

This Guidance is not intended to provide detailed guidance on investments and finance. It does not constitute investment advice and does not cover the tax implications of investments. It is not intended as a detailed commentary on the law underpinning this area. Charity trustees should always take appropriate advice where necessary – see sources of help and advice.

Who is this Guidance for?

This Guidance is for:

• charity trustees of Scottish charities
• people working in Scottish charities
• professionals who advise Scottish charities or who manage investments on behalf of Scottish charities may wish to use this Guidance as a tool to help their clients.

 

Myth busting Charity law is not the same across the UK. It’s important to be aware that charity law in Scotland is different to the law which applies to charities in England and Wales. This means information you read from sources in England and Wales may not apply in Scotland.

 

How to use the Guidance

The guidance is split into sections to help you find the information most relevant to you and your charity. 

Key terms are highlighted in bold purple type. Clicking on these terms will take you to either the charity law glossary on our website or to our specific investment terms glossary at section 9 of this guidance. 

Sources of help and advice

OSCR publishes general guidance for charities, but can’t provide specific advice on the full range of things which affect your charity’s finances. You may need to consult an adviser for professional help and support, such as a lawyer, accountant, investment manager, financial planner or other consultant.

• Local Third Sector Interfaces offer a range of support to voluntary organisations.
• The Scottish Council for Voluntary Organisations (SCVO) has information on running a charity, including finance and business management.
• The Law Society of Scotland may be able to help you identify a professional firm with expertise in charity law. 
• There are various accountancy bodies such as the Institute of Chartered Accountants in Scotland or the Association of Chartered Certified Accountants that may be able to help you to identify a professional firm with expertise in charity accounting or tax.
• For all tax matters see Her Majesty's Revenue and Customs (HMRC). The HMRC charity pages provide information and questions about tax issues relating to charities and charitable donations.

These organisations in England and Wales have reference material on some of the areas set out in this Guidance, including examples of investment policy statements. These don’t fully reflect the law and regulation in Scotland, however the materials available may provide useful information or assist with charity trustee discussions:

• Charity Finance Group    
• The Society of Trust and Estate Practitioners (STEP)    
• Charity Commission for England and Wales: Charities and investment matters: a guide for trustees (CC14)
  
  

OSCR is grateful to the following people for their support and assistance in producing this guidance:
Co-author and project manager:
Julie Hutchison	Aberdeen Standard Investments
Reference Group:
Louise Devine	Archdiocese of Glasgow
Jane Ferguson	Edinburgh and Lothians Health Foundation
Amanda Forsyth	Murray Asset Management UK Ltd
Pauline Hinchion	Scottish Community Re: Investment Trust
Lynne Lamont	Brewin Dolphin
Alastair Wilson	Brooks Macdonald