The Cabinet Office appointed Lord Hodgson in November 2011 to undertake a review of the Charities Act 2006. Lord Hodgson is expected to report in July 2012. One of the issues that the review will consider is how “mixed motive” or social investment by and into charities can be facilitated and encouraged.
The Cabinet Office has issued a questionnaire and call for evidence on mixed motive investments. This must be viewed in the context of the Charity Commission’s recently revised CC14 guidance (Charities and Investment Matters: A guide for trustees). The deadline to respond to the call for evidence is 16 April 2012.
We will cover the following issues:
1. An overview of the law on investment by charities and into charities, in particular mixed motive investment.
2. A discussion on the questions raised by Lord Hodgson’s review including:
• the high-level barriers to growing the social investment market (such as the difficulty of creating attractive products for investors; lack of investment readiness among potential investees; lack of robust or well-established measures of social impact; etc.);
• the impact of the legal and regulatory framework on the ability of charities to make and to raise funds via mixed motive investments.
3. A discussion of ideas for potential reforms, including a statutory power for charities to make mixed motive investments, and/or a specific legal power to permit a proportion of permanent endowments to be invested in mixed motive investments, as well as other possible reforms to facilitate and encourage the social finance market.
Speakers from BWB will include Stephen Lloyd, Luke Fletcher, Simon Steeden and Viral Kataria from the firm’s Social Finance Team.