Restricted funds and endowments

Our charity team is at the forefront of advising charities and philanthropists on endowments and restricted funds.

As interest in this area continues to grow, we help clients to establish new endowments as a source of sustainable, long-term charitable funding and to unlock existing endowments and restricted funds that are no longer delivering their full potential.

Our specialist charity lawyers combine market-leading technical expertise with a deep understanding of the sector to help develop funding structures that support long-term charitable objectives and modernise historic restrictions so that charitable assets can be used more effectively to meet today’s needs.

How we can help

Establishing new endowment funds for charities

We have been helping an increasing number of charities to set up new endowment funds including for use as fundraising vehicles to attract new donations to the charity which will be used over the longer term, including to help secure the long term future of the charity.

Establishing new restricted and endowment funds for donors

We are also helping philanthropists to set up new endowment funds to ensure that their charitable legacy will have maximum long term impact, and restricted funds to be used for particular charitable purposes. We have particular experience in advising on the establishment of waqf funds within the Muslim community in line with Islamic philanthropic principles.

Advising on the terms of restricted and endowment funds

We can support clients with reviewing the terms of their restricted and endowment funds, so they can understand the terms on which they are held – and whether they truly are subject to restrictions.

Advising on the powers to unlock restricted and endowment funds

We advise on the scope to use statutory powers to:

  • modernise the purposes of restricted funds.
  • release restrictions on spending the capital of endowment funds.
  • borrow from permanent endowment funds.
  • invest permanent endowment on a total return basis, which can facilitate a more flexible approach to investment.
  • use permanent endowment funds to make social investments.
Explore

FAQs: Restricted funds and endowments

What are restricted funds and endowments? A charity doesn’t always have the freedom to use its funds for its general purposes. Sometimes donors impose restrictions which limit the charity’s scope to use the donation freely. There are two main restrictions. Restrictions on purposes A restricted fund is a fund which must be used for a …
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Understanding and unlocking restricted legacies

Legacies to charities usually fall into one of the categories below: Legacies falling into the second category are ‘restricted legacies’. What does this mean for your charity? Can those restrictions be lifted? And how should legacies in category 3 be treated? What is a restricted legacy? A restricted legacy is subject to binding legal restrictions …
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Waqf: a model for modern Islamic philanthropy and long-term impact

Many Muslim philanthropists, business owners and investors are looking to deploy wealth not only for financial return, but also for lasting social impact and spiritual legacy. That means tackling entrenched problems such as poverty, housing insecurity and unjust debt, while also funding long-term work that is often hard to support, including institution-building and community advocacy. …
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Endowment funds: An introduction

What is an endowment fund? An endowment fund is property which a charity must retain and invest to generate an income. Different types of endowment There are two main categories of endowment fund: Permanent endowment where the trustees may spend the income generated from the investment of the capital but cannot spend the capital itself. …
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The Charities Act 2022, explained: permanent endowment and restricted funds

In this blog we look at the changes to the rules affecting a charity’s permanent endowment and other restricted funds. What do you need to know? Many charities, including incorporated charities, hold funds which are subject to restrictions in relation to how they may be spent. These funds can be established in different ways, including …
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