The Charity Investment Consulting Partnership (CICP) held its third roundtable of 2025, hosted by the CIO Investment Club and generously supported by EdenTree Investment Management. With over 20 participants attending, the session brought together charity leaders, investment professionals, and trustees to explore the real drivers behind effective investment strategy.
Setting the scene: strategy, restrictions, and impact
Rachel Titchen, Chair of the CICP and Charities & Investment Director at Broadstone, opened the session by inviting attendees to reflect on the material elements of their investment strategy. Each participant was asked to rank four key considerations by importance to their organisation:
- Asset Allocation
- Manager Selection
- Investment Restrictions
- Positive Social Impact
The results of this ranking sparked a lively and thought-provoking discussion. Over 60% of participants ranked asset allocation as the most important factor, with positive social impact coming in second. Investment restrictions and manager selection were rated lower, but the conversation revealed just how interconnected these elements are…
Key themes from the discussion
- Strategy is not linear—It’s interdependent
One of the most striking takeaways from the roundtable was the recognition that investment strategy isn’t a series of isolated decisions—it’s a web of interdependent choices. Whilst asset allocation was ranked as the most important factor by the majority of participants, the conversation quickly revealed that decisions around impact and restrictions often influence asset allocation itself.
For example, if a charity is committed to pursuing positive social impact, it may need to consider investments in private markets or higher-risk opportunities. These types of investments naturally affect the overall asset allocation and risk profile. Similarly, investment restrictions—such as excluding certain sectors or companies—can limit the universe of available assets, which in turn shapes both manager selection and portfolio construction.
Participants agreed that understanding these interdependencies is crucial. As one attendee put it, “Decision-making isn’t the same as importance—each part impacts the other.” This insight underscores the need for a holistic approach to strategy, where each element is considered not just in isolation, but in relation to the others.
- Mission alignment vs. market realities
Charities are increasingly seeking to align their investment strategies with their broader mission and values. This means deploying investment into companies whose activities support and contribute to the charitable mission of the charity. Positive social impact investing offers a compelling way to do this, allowing organisations to support causes that reflect their purpose. However, this approach often comes with trade-offs—particularly around liquidity, risk, and governance.
Impact investments are frequently found in private markets, which can be less liquid and more volatile. For trustees, this raises questions about risk tolerance and time horizon. Some participants felt strongly that impact should be the primary driver of strategy, even if it means accepting higher risk. Others argued that financial sustainability must come first, with impact layered in only after core return and risk parameters are set.
This tension between mission and market realities is one that many charities face when investing. The roundtable highlighted the importance of having clear priorities—and the value of external advice in helping trustees navigate these complex decisions.
- Governance and support matter
Governance capacity emerged as a key factor in shaping investment strategy. Smaller charities, in particular, may lack the internal expertise or resources to make nuanced decisions about asset allocation, manager selection, or impact integration. As a result, many rely on multi-asset funds or default to standard solutions that may not fully reflect their values or objectives.
One of the CICP’s key purposes is to help charities understand how independent investment advisers can play a vital role in bridging this gap. By helping charities articulate their priorities and understand the implications of different strategic choices, advisers can support more informed and mission-aligned decision-making. This is especially important when navigating complex areas like impact investing or bespoke restrictions.
The group also noted that governance isn’t just about capacity—it’s about confidence. Trustees need to feel empowered to ask the right questions and challenge assumptions. With the right support, even smaller charities can build strategies that are both financially sound and purpose-driven.
- Restrictions: exclusion vs. engagement
Matt Hurshman, Associate Partner at Aon, then led the discussion towards the impact of imposing ethical based restriction on your investment implementation. This led to a nuanced debate around investment restrictions—specifically, whether disinvesting or engaging is the more effective approach. Some participants questioned the impact of divesting from large public companies, suggesting that it may simply allow others to buy those assets without changing corporate behaviour. Others argued that shareholder engagement offers a more meaningful way to influence change.
However, the market offers limited options for charities seeking to apply tailored restrictions. Most fall into one of two groups: those who invest in funds with standard exclusionary policies (such as the Church of England’s), and those who opt for more expensive segregated portfolios to implement bespoke exclusions. This lack of flexibility can be a barrier for charities trying to align their investments with specific ethical or mission-based criteria.
The discussion highlighted a clear need for more accessible and customisable solutions. Restrictions shouldn’t be seen as a constraint—they can be a strategic tool for alignment. But to use them effectively, charities need both choice and clarity, which again points to the value of independent advice.
- Size matters
The size of a charity’s endowment or investment portfolio significantly influences its strategic options. Larger charities may have the scale to pursue impact investing, engage directly with managers, or shape bespoke portfolios. For these organisations, restrictions and impact considerations can be central to strategy.
Smaller charities, however, often face more limited choices. With fewer resources and less influence, their priority tends to be ensuring that investments perform well against financial objectives. For these organisations, asset allocation becomes the most material decision—determining risk, return, and long-term sustainability.
This divide underscores the importance of tailoring strategy to context. What works for a large foundation may not be appropriate for a small community charity. The roundtable reinforced the idea that there’s no one-size-fits-all approach—and that understanding your organisation’s capacity and goals is key to making the right decisions.
- Active management: performance or purpose?
The group also explored the role of active management in charity portfolios. While some questioned whether any manager consistently outperforms the market, others suggested that the real value of active management may lie in ESG integration and ethical alignment.
Rather than focusing solely on exclusions, trustees might consider selecting managers whose positive tilts and investment ethos naturally align with their values. These managers may not have formal exclusionary policies, but their approach to stewardship and stock selection can still reflect a charity’s mission.
This perspective opens up new possibilities for strategy. Instead of viewing active management as a tool for chasing returns, charities can use it to express values and drive impact. It’s a subtle shift—but one that could reshape how trustees think about manager selection and portfolio construction.
Conclusion: strategy with purpose
This roundtable made one thing clear: charity investment strategy is not just about returns—it’s about purpose, priorities, and practicalities. Asset allocation may be the foundation, but impact, restrictions, and governance shape the structure.
For the CICP, we believe that an independent investment adviser can help charities navigate these complexities—clarifying priorities and recommending strategies that reflect both financial goals and mission alignment.