- Your board exists to advance a charitable purpose. The investment portfolio exists to fund that purpose sustainably. Good investment governance should strengthen that connection, not compete with it for your board's time and attention.
We work with charities across New Zealand, and the challenge we see most often is not a lack of care about investment governance. It is that the investment function has become more demanding without the governance arrangements adapting to match. Portfolios that once sat in a balanced fund with a single manager now span multiple asset classes, multiple managers, and increasingly complex mandates around values alignment and responsible investing. But the board still has 30 minutes at the end of a three-hour meeting to cover investments, and the quarterly report still reads as though it were written for a dedicated investment committee.
The question is not whether your board cares about governing the portfolio well. It does. The question is whether your investment arrangements are designed to deliver good outcomes proportionate to the governance energy your board can realistically provide. A charity with a volunteer board and a mission to deliver has different governance resources from a community trust with a dedicated investment committee. The investment model should reflect that reality.
This is a structural question, not a performance question. The right investment governance model for your charity depends on the complexity of the portfolio, the capacity of your board, and how much of the investment function the board wants to manage directly versus delegate to a specialist partner. Getting that balance right means your board can govern the portfolio with confidence and still focus the majority of its energy where it belongs: on the charitable mission.
The Proportionality Challenge
For a community trust, the investment portfolio is the primary governance function. For a charity, it is one of several. Programme delivery, fundraising, regulatory compliance, staffing, and stakeholder engagement all compete for the same pool of board time and attention.
That distinction matters. It means investment governance needs to be efficient, not exhaustive. The board needs enough visibility to govern the portfolio with confidence, but it does not need to replicate the oversight model of an institution whose sole function is managing and distributing capital.
Most advisory arrangements do not adjust for this reality. The quarterly report is the same density whether it goes to a trust board with a dedicated investment committee or to a charity board that covers investments as one item on a broader agenda. The result is boards that are diligent but under-supported: trustees who review the report but are not sure what questions to ask, advisory relationships that have been in place for years without a formal evaluation of whether the model still fits, and governance energy spent on operational investment detail that the board is not well placed to second-guess.
The answer is not more governance. It is governance that is designed to be proportionate: the right level of investment oversight for the board's capacity, delivered in a way that makes oversight effective without making it the board's dominant function.
Getting the Right Level of Support
The appropriate level of investment governance depends on two things: how complex the portfolio is, and how much governance capacity the board has to oversee it. Where these intersect determines what model makes sense.
A charity with a relatively straightforward investment portfolio and a board that includes members with investment experience may need nothing more than specialist advice alongside its own analysis. The board makes all decisions and manages the relationship with its investment manager directly.
A charity with a more complex portfolio, or a board where investment experience is limited among its members, may benefit from delegating some or all of the operational investment function to a specialist partner. This is not about the board stepping back from governance. It is about the board focusing its governance energy on the strategic questions (risk appetite, investment objectives, values alignment, spending sustainability) and delegating the operational complexity to someone whose full-time job it is.
The spectrum runs from consulting-only advice at one end through to full delegation at the other, with many charities best served by something in between. Partial delegation lets the board set strategic direction while the specialist partner handles the elements the board chooses to delegate: manager selection and monitoring, portfolio rebalancing, implementation, or reporting designed for a non-specialist board.
The key principle is that the governance model should match your charity's situation. A board that spends significant time on operational investment matters it is not well placed to oversee is not governing well, even if it is governing diligently. And a board that delegates the full investment function when it has the capacity and desire to be more hands-on may be delegating more than it needs to. The right answer is specific to each charity.
When Investments and Purpose Contradict
Charities face a values challenge that most other institutional investors can set aside: the investment portfolio can actively contradict the charitable purpose. A health charity invested in tobacco. An environmental charity invested in fossil fuels. A children's charity invested in companies with poor labour practices. These contradictions are not hypothetical, and when they come to light, they erode the trust that donors, beneficiaries, and the public place in the organisation.
The expectation is increasingly clear. A charity's investments should at minimum not undermine its purpose, and ideally should support it. This is not simply an ethical preference. It is a governance question: has the board defined what values alignment means for its investment portfolio? Does the investment policy address it? Is there a process for monitoring alignment and reporting on it alongside financial performance?
Many charity boards recognise the importance of values alignment but have not had the support to translate that recognition into a practical investment framework. The challenge is that values alignment adds governance complexity to an already stretched board. It requires policy decisions about what the charity will and will not invest in, ongoing monitoring of alignment across the portfolio, and reporting that gives the board confidence the policy is being followed.
We help charities work through this. Our approach starts with the board's own articulation of what its charitable purpose requires of the investment portfolio. From there, we develop a values framework that is specific enough to guide investment decisions, practical enough to implement across a diversified portfolio, and clear enough to report on. Our companion guide on values-aligned investing for institutional portfolios→ explores this framework in detail, including the practical steps boards can take to move from principle to implementation.
Sustaining the Spending That Funds Your Programmes
For charities with a long-term investment portfolio, whether a dedicated endowment or reserves built up over time, one of the most important governance questions is whether the portfolio can sustain the level of spending that funds the charity's programmes. Spending too aggressively erodes the capital base and compromises future mission delivery. Spending too conservatively means the charity is not fully serving its current beneficiaries.
This is the same governance challenge that community trusts and foundations face, and the answer lies in the same set of interconnected decisions: risk appetite, investment objectives, asset allocation, reserves, and sustainable spending level. These are not independent choices. They form a system, and changing one changes the others. Most charity boards make these decisions, but many make them in isolation: the finance committee sets a spending budget, the investment adviser reports on portfolio returns, and nobody connects the two.
The difference for charities is that this system needs to work within a governance structure that has less time to devote to it. The board cannot spend three meetings a year on spending policy modelling. It needs to understand the framework, set the parameters, and have confidence that the system is being monitored, ideally by a partner who brings this to the surface as a coherent picture rather than leaving the board to assemble it from separate reports.
Our companion guide on spending policy and reserves for perpetual capital→ explores this framework in detail, including an interactive governance tool that lets boards adjust risk appetite and spending level and see how the long-term capital projection responds.
A Regulatory Prompt
The Charities Amendment Act 2023 creates a natural opportunity to review your investment governance arrangements. Every registered charity must review its governance procedures by October 2026, and every three years thereafter. The Trusts Act 2019 also requires trustees to consider the charitable purpose when making investment decisions.
The legislation does not tell boards how to govern their investments well. It requires that they review their governance arrangements and that they consider purpose when investing. What those reviews look like, and what acting on them means in practice, is left to the board.
If the board is reviewing its governance arrangements anyway, it is a natural moment to include the investment function in that review: whether the current advisory model still fits the board's governance capacity, whether the investment policy addresses values alignment, and whether the reporting the board receives gives it what it needs to govern the portfolio with confidence.
Continuing to Build Investment Knowledge
Effective investment governance depends on the people around the table having enough context to engage meaningfully with the decisions in front of them. For charity boards with regular turnover, this is an ongoing challenge: new board members arrive with deep expertise in the charity's mission area but may be encountering institutional investment governance for the first time.
We provide ongoing education outside the board meeting agenda, so that learning does not compete with governance. This takes three forms.
The common thread across all three is that the education is designed for the people who actually govern charity portfolios, not repurposed from content written for investment professionals. The language, the level of assumed knowledge, and the practical focus all reflect the reality that charity boards include people whose primary expertise is in the charitable mission, not in investment management.
Workshops
Workshops allow board members to explore specific topics in more depth than a board meeting permits. These might focus on how spending policy connects to portfolio sustainability, an emerging approach to values-aligned investing, or a governance challenge that warrants dedicated discussion. We schedule these in the lead-up to significant decisions, so the board arrives at those decisions better prepared.
Research Publications
Research publications give board members access to our thinking on the issues that matter to institutional investors in New Zealand, from how to evaluate whether your advisory model is still right for your needs→ to the governance implications of integrating values into investment policy. These are written to be genuinely useful to non-specialist readers: practical frameworks, clear analysis, and specific takeaways that board members can apply to their own governance context.
Webinars
Webinars provide a flexible format for board members to stay current with developments in investment markets, governance best practice, and the practical aspects of managing a charity's investment portfolio, without requiring travel or a significant time commitment.
How We Work with Charities
The level of support we provide is shaped by each charity's governance needs, the complexity of its portfolio, and how the board wants to spend its time.
Advice Only
We provide independent advice on investment policy, asset allocation, manager evaluation, and governance frameworks. Your board makes all decisions and manages implementation. This works well for charities with strong internal investment capability or board members who want specialist input alongside their own analysis.
Partial Delegation
Your board sets strategic direction and investment objectives. We handle the elements the board chooses to delegate, which may include manager selection and monitoring, portfolio rebalancing, values-alignment monitoring, or reporting designed for a non-specialist board. The scope of delegation is tailored to your governance capacity and how the board wants to allocate its time.
Full Delegation
We work with your board to establish risk appetite, return objectives, and a values framework aligned with your charitable purpose. We are accountable for the investment function within those parameters: portfolio construction, manager oversight, implementation, and reporting that shows whether the portfolio is on track to sustain the spending that funds your programmes. Your board maintains governance oversight, authority over the charity's strategic direction, and the authority to adjust the investment framework at any time. This frees the board to focus its governance energy on the charitable mission.
We also run governance workshops for boards, focused on the decisions that connect risk appetite, investment returns, and programme funding sustainability. These sessions are available to any charity board, including those who are not yet working with us.
Our companion pages on the spectrum of support and our approach explore the three models in detail.
