Numerous charities have run into trouble in the press for investing in controversial areas. The RSPB, to cite just one example, was pulled up for investing in a company responsible for an oil spill that killed thousands of sea birds.
Stories like this can do a lot of damage to a charity's reputation, donors may be turned off from giving and beneficiaries may decide not to use services.
Yet charities still seem to be blissfully unaware about where their money is being invested. When challenged about whether investments in certain companies are appropriate, they often plead ignorance and shift the blame onto investment managers - a highly irresponsible approach considering the PR implications.
The problems tend to arise when charities invest in group investment funds, rather than having their own individually managed portfolios of shares. For most charities this is the best bet, as individual funds are not really financially viable for all but the largest organisations. But there are ethical pooled funds available, which trustees should seriously consider when going down this route.
It is true that investing ethically is not straightforward for charities.
Trustees are obliged by the Charity Commission to make sure investments have the maximum return possible, and there is an argument that considering a company's ethics before its annual returns contradicts this. Controversial industries, such as tobacco, often produce the best returns. But if charities think beyond the returns of the past few years, many companies now considered unethical are also not going to be sustainable in the future, so may not make for the best long-term investments.
And, of course, there is the PR argument that the returns an investment might bring are irrelevant if it means losing service-users, donors and supporters.