Investing for Charitable Trusts

1

• Investing for Charitable Trusts
• A Trustees Perspective on
• Social and Ethical Issues
• David Ward
• Managing Director
• ANZ Trustees

2
Charitable Foundations Value Chain
Maximise Impact Make a difference - Make it last
Establishment Succession
Administration
Investment
Granting
ANZ Executors Trustee Company Limited
3
Charitable Trusts Investment Requirements

• Trustees are required to (inter alia)
• Be prudent
• Not speculate
• Not to invest in anything prohibited by the Trust
  Deed
• Adher to the terms of the Trust
• Act impartially towards beneficiaries and classes
  of beneficiaries

4
Ethical Investment Overlays Summary of a
Trustees Perspective

• When making invest decisions, Trustees of a
  charitable trust should be focused on the long
  term financial benefit generated by the Trust.
  Any restrictions (including those of an ethical
  nature) Trustees apply on the universe of
  investment options, must be entirely consistent
  with the wishes of the settlor/benefactor as set
  out in the trust deed as either an explicit
  restriction in the investment powers or through
  the purpose of the Trust that guides Trustees in
  all their activity, including investment
  management. Beyond this Trustees of any
  charitable trust should not apply personal or
  perceived community values to the investment
  management process by putting in place ethical
  screens.
•  
• The province of creating such ethical
  restrictions is the settlors/ benefactors, and
  care is needed to ensure no unintended
  consequences.
•  
• There is no role for an investment manager to
  unilaterally apply ethical screens as such action
  is in effect a fettering of Trustees discretion.
  The duty of the investment manager of a
  charitable trust is to serve the investment
  mandate as devised by the Trustees.