Social investment

Social investment is where a charity’s money does double duty. Instead of choosing between a grant that furthers the mission and an investment that earns a return, a social investment aims for both — a loan to a community business, say, that advances the charity’s purposes and is expected to be repaid with interest.

Charities have a statutory power to make social investments under the Charities (Protection and Social Investment) Act 2016, now part of the Charities Act 2011. (Source: legislation.gov.uk, Charities Act 2011 (as amended); Charities SORP, accessed 9 July 2026.) Trustees must still act with reasonable care, consider the charity’s interests, take advice where appropriate, and respect any restriction in the governing document.

SORP 2026 refreshed how social investments are defined and reported, aligning them with the Charities Act 2011. Because committing money to a social investment ties up cash that would otherwise be freely available, weigh the effect on your free reserves as part of your wider financial oversight — see the Trustee & Governance Handbook.