Commentary on provisions of Act Section 15: Power to make social investments Section 292B: General power to make social investments
A general power to make social investments is conferred by subsection (1).
	Subsection (2) imposes a condition on the exercise of the power in relation to permanent endowment. Permanent endowment is property held subject to a restriction on its being spent for the purposes of the charity. A charity is to be treated for the purposes of the Charities Act 2011 as having permanent endowment unless all property held for the purposes of the charity may be spent for those purposes without distinction between capital and income: Charities Act 2011, s 353(3). Subsection (2) provides that the power is not to be used to make a social investment using permanent endowment unless the charity trustees expect that any restriction on spending the permanent endowment will be complied with; in most cases this means that the charity trustees must expect the value of the permanent endowment to be maintained. This is in contrast to other funds, which may be used to make a social investment provided that a financial return is expected, where a financial return is anything short of total loss of the funds.
	Subsection (3)(a) provides that the power may be restricted or excluded by the trusts of the charity. The trusts of a charity are the provisions establishing it as a charity and regulating its purposes and administration, whether those provisions take effect by way of trust or not: Charities Act 2011, s 353(1). This may include, for example, a trust deed or the articles of association of a charitable company.
	Subsection (3)(b) provides that the power is, subject to subsection (3)(a), in addition to any other power that the charity or charity trustees have to make a social investment. The power supplements rather than replaces other social investment powers.
	Subsection (4) provides that the power to make social investments in section 292A and the duties when making social investments in section 292C apply to charities in existence when Part 14A comes into force (that is, the date on which section 15 of the Act comes into force) as well as to charities established after that date. The power and duties do not, however, apply to charities established by legislation (or whose purposes and functions are set out in legislation) or charities established by Royal Charter. Such charities must rely on their existing powers in order to make social investments or alternatively seek an amendment to the relevant legislation or Royal Charter to introduce such a power.