Foundations of a Robust Charity Investment Strategy: Thinking About Risk

28 February 2024

This article continues our exploration of Strategic Investment Framework for Charities, a series of articles for charity trustees and executives that we develop in collaboration with Robert Hayes, a senior consultant to PMCL Consulting.

In our previous note we concluded by saying that ‘ideally your investments should reflect your aspirations’, in particular our focus was on cash flow requirements and potential commitments that a charity needs to plan for. The two crucial things that go together with aspirations are, of course, ‘fears’ and ‘opportunities’.

We will explore investment returns and the relationship with risk and the technical (and jargon laden!) topic of ‘investment risk’ in detail later in these papers. However at the outset it is helpful to consider the topic of ‘fears’ a bit more in plain English and consider the scenarios and situations that the trustees and institution wish to avoid.

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