Charities – Feature
Alan Goodwin, head of investment relationship management at Newton Investment Management.
Indeed, in 2020, in the midst of the disruption caused by the pandemic, 11% of charities stated that they did not know what level of return to expect in the next three to five years. This reached 13% of respondents over a 10-year horizon. However, 2021 saw greater clarity with only around 5% of char- ities unable to estimate their returns between the next three and 20 years.
The pandemic has placed a greater strain on organisations spe- cialising in philanthropy and social wellbeing, with 53% of trustees reporting an increased workload. It remains to be seen if trying to do more with less is sustainable.
Getting better Remarkably, just 20% of charities believe the pandemic has affected their investment strategy, down from 30% a year earlier, according to Newton’s survey.
For those reporting an impact from the pandemic on their investment strategies, a drop in income is the most prominent issue. This is followed by a re-evaluation of reserve policies and a significant drop in returns – but they are all less fre- quently reported.
Three-quarters of charities with affected investment strate- gies also report a drop in investment income – down from 88% in 2020 – with 31% re-evaluating their reserves poli- cies and 19% reporting significant drops in investment returns, both are improvements on the responses given the previous year. Meanwhile, 19% of charities with affected investment strate- gies have increased spending in their investment portfolios, up from 18% in 2020, with 6% postponing an investment manager review as a result. Much of the past two years has been defined by the disruption caused by the coronavirus pandemic. However, what is reveal- ing when looking ahead is that most charities do not see the
Issue 109 | December-January 2022 | portfolio institutional | 37
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