Section 292A Meaning of “social investment”F1

(1)

This section applies for the purposes of this Part.

(2)

A social investment is made when a relevant act of a charity is carried out with a view to both—

(a)

directly furthering the charity's purposes; and

(b)

achieving a financial return for the charity.

(3)

References to an act of a charity are, in the case of an unincorporated charity, to an act of the charity trustees.

(4)

A relevant act of a charity is—

(a)

an application or use of funds or other property; or

(b)

taking on a commitment in relation to a liability of another person (such as a guarantee) that puts the charity's funds or other property at risk of being applied or used.

(5)

An act mentioned in subsection (4)(a) is to be regarded as achieving a financial return if its outcome is better for the charity in financial terms than expending the whole of the funds or other property in question.

(6)

A commitment mentioned in subsection (4)(b) is to be regarded as achieving a financial return if—

(a)

it is not called upon; or

(b)

it is called upon without resulting in the expenditure of the whole of the funds or other property put at risk.

(7)

The fact that a relevant act may also have results other than those mentioned in subsection (2)(a) and (b) does not prevent the carrying out of that act being regarded as the making of a social investment.

(8)

The fact that carrying out a relevant act of a charity is regarded as the making of a social investment for the purposes of this Part does not of itself make the act an investment for any other purpose.

Annotations

Textual amendments

F1: Pt. 14A inserted (31.7.2016) by Charities (Protection and Social Investment) Act 2016 (c. 4), ss. 15(1), 17(4); S.I. 2016/815, reg. 2(k)