I found one thing absolutely fascinating: two English law cases, known as Cowan v Scargill and the Bishop of Oxford v the Church Commissioners, are seen in the US by reformers as guidance for their rather confused system to follow. The principle of investment maximisation is still the dominant philosophy in the US and explains why there is such interest in the Yale University endowment investment policy (Third Sector Extra, Investment 2007).
So how socially responsible are US endowments? One of the interesting reports discussed was produced by US civil society consultancy the Foundation Strategy Group. Mark Kramer, chief executive of the FSG, tabled a report on mission investing by US charities. Mission investment is what Britons tend to refer to as "programme-related investment". The FSG defined it as being one part of three different linked activities.
Worryingly for the UK's socially responsible investment lobby, the report said: "Although SRI funds are the best-known social investment vehicles, few of the foundations studied have made such investments. Several noted they previously held such investments, but divested them because they did not see a clear connection to their missions, and the funds' performance was not attractive enough to warrant keeping the investments purely for financial reasons."
The Bill and Melinda Gates Foundation's decision to see its mission and investment holdings as quite distinct entities encouraged some debate. This division is the reality for the overwhelming majority of UK charities that hold investments.
Should there be a link between investment, supply chains and mission? It really should be one of the key issues when discussing the role of charity in UK society, but it is a subject that is not understood and rarely discussed. It should be on a par with the debates about government relations and the voluntary sector.
- Paul Palmer is professor of voluntary sector management at Cass Business School