2. What is an investment?

Published: 12/11/2018
Updated: 12/11/2018

 

An investment is intended to generate a return – to give something back to the person or organisation that owns it. In a charity context, investments are charity assets used to help the charity deliver its charitable purposes.  

Usually investments are intended to provide a financial return in the form of money being earned for the charity to use (income) and/or by the value of the investments increasing over a period of time (capital growth). 

However, investments can also involve other kinds of return in addition to a financial one, such as a social or environmental return, as covered in section 5 

A charity’s investments can involve a range of assets, for example:

  • a building from which you receive rental income
  • cash placed on deposit which generates interest
  • a portfolio of stocks, shares and other assets
  • or a right to income from some other asset, for example royalty income arising from owning the copyright to a book.