The grant-maker Panahpur has predicted that it will become the first charitable trust in the UK to put all of its capital into social investment.
The trust has already invested 15 per cent of its £6m assets socially. It has put cash into the social impact bond, the Social Stock Exchange and a fund run by the National Endowment for Science, Technology and the Arts to develop new social finance products.
Restrictions on social investment are to be relaxed under proposed changes to CC14, the Charity Commission rules that govern charity investments.
James Perry, chief executive of Panahpur, told Third Sector more money would be invested socially as more good opportunities appeared.
"We made the decision to move out of conventional investment because we fund work with people who are vulnerable and excluded, and we saw inequality as one of the big causes of their exclusion," he said.
"We felt the markets we were invested in promoted inequality and we thought it was contradictory to invest in a system and then use the profit we made to fight the problems that system caused."
He said the charity had started investing socially five years ago and had found evidence that it could at least pay its costs and protect its capital against inflation.
Perry said he anticipated making mostly "finance first" investments in companies that achieve a social good, but will generate market rate returns and "inflation plus" investments in areas such as social impact bonds.
If that produces good returns, the charity will also be able to offer interest-free loans to social enterprises it wants to support.