Social investment has grown dramatically over the past few years, so regulators have had to draw up rules in a hurry.
Although the basic principle of an investment that produces a positive social benefit is widely accepted, the definitions used by the Charity Commission and HM Revenue & Customs, and by different parts of the sector, all mean slightly different things - which in turn means that trustees can be unsure what they are and are not allowed to do.
The commission's answer - and that of HMRC - has been to define social investment as a charitable activity, completely distinct from commercial, money-making investment, and governed by different rules.
But Neasa Coen, a senior associate at law firm Berwin Leighton Paisner, says the existing rules do not allow charities to make investments that are primarily financial but also have a social element.
"If you are an education charity, you would not be able to get involved in social investment in, say, the environment," she says. "Any charity making a social investment that doesn't fall within its objects jeopardises its tax relief."
Coen says that even if charities make investments within their own sector, they risk losing tax relief if the organisations they invest in do not have wholly charitable purposes.
The commission says it will produce a draft of its updated guidance on investment, CC14, next month and hopes this will solve some of these problems. It is speaking about this to both HMRC and the social investment community.
Richard Maitland, head of charities at investment house Sarasin and Partners, says conventional and social investment should be kept separate.
"Social investment has investment in the name, but it doesn't meet the legal definition," he says. "In theory, it would be acceptable to do it expecting to lose money. There is no reason why you shouldn't lend money expecting to get back less than you put in, but get back some capital to lend again. I would prefer to see the term venture philanthropy used to describe it."
Antony Ross, executive director of social lender Bridges Ventures, says a lack of clarity over the rules puts some charities off. "There's a lot of lobbying to make it easier to do," he says. "As the law becomes clearer, more charities will begin to do it."