Dangers lie in financial waters

PETER STANFORD, a writer and broadcaster. He chaired the trustees of the national disability charity Aspire and now sits on various trustee boards

Among the letters waiting when I returned from holiday was a missive from our treasurer. Normally he can be relied upon subtly to tell us financial novices on the trustee board what to do and so far he has shown impeccable judgment. But on this occasion, he admits he is stumped.

We administer a £1 million-plus fund which pays for a professorial chair in disability and technology set up by the charity. Thus far we've been doing well by investing the money in gilts, but with low interest rates they are producing a less and less impressive yield. Should we, he is asking, dip our toes into the shark-infested waters of the equity market in search of a better return?

Aside from being way beyond my competence, these money matters are the toughest questions of all for trustees. Yes, you can take advice and, despite the temptation to get a financial whizz to give you some top tips for free, it should really be professional advice, duly paid for with whatever weight that brings. However, such professional guidance can be little more than gazing into a crystal ball. Remember Barings Bank.

And the stakes are so high. The Royal National Institute of the Blind is getting a rough ride from visually impaired people because it has had to cut back on its residential centres for guide dog training. The charity's investments have not been performing well and so savings have had to be made which have a painful effect on individuals' lives.

There is in this area a sense of damned if you do, damned if you don't.

With such potential to damage the lives of people we are supposed to be helping, my instinct is to play it safe, but that means a low return on capital. Yet if we take more of a risk, we could raise more income and reach more people in need. But we might lose the lot. How to steer a middle course? The answer is, uneasily, even uncomfortably. Next to the ecstasy of being a trustee when you see your charity making a real difference in lives, this is surely the agony, one of those times when, unwillingly and with a heavy heart, you play God.

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