Almost all Brits say it is important for a charity to invest its money in funds which comply with their values, but in a 2006 survey it was found that little more than half of large charities in the UK have an ethical investment policy.

Public expectations regarding ethical investment amongst charities differs to the reality, with 83 per cent saying that they would be less likely or unwilling to donate to a charity which was not investing their money ethically, according to research from the EIRS Foundation (Ethical Investment Research Services).

A survey of 2,000 UK adults revealed that half would be unwilling to give to charities that were investing in a way that was at odds with their ethical principles, while a further 31 per cent would be less likely to donate.

Nearly all respondents – 91 per cent – agreed that charities should be ethically and socially responsible when it comes to investment, a sign of the growing interest amongst the British public in where their money is going and how it is used by charities.

Just 55 per cent of large UK charities had an ethical investment policy in 2006, and charities risk their reputations and income if they do not make investments which are conducive with their objectives.

Many charities are concerned that the credit crunch will have an adverse affect on their income, both from monetary gifts and in the form of donated goods to sell in their shops; thus it is more important than ever for charities to insure that they do not jeopardise income by going against the principal foundations of the organisation, the EIRS said.

Almost half of respondents said that it was ‘very important’ to them to know what a charity is doing with its money, and 81 per cent said that if they were found to be investing unethically then this would have an adverse affect on their image of the charity.

“Ethical investment is something which each of the UK’s 25,000 charities that have investments should be taking very seriously.” said Peter Webster, executive director of EIRIS.

“It provides charities with real opportunities to further rather than counter their aims. If all the £56billion of UK charity investments was invested ethically this would send a powerful message to companies in terms of social, environmental and ethical corporate behaviour.”

While some charities are worried about the affect of the credit crunch on their income, Oxfam is expecting a 20 per cent increase in sales for this financial year as shoppers try to save money by hunting for bargains in its 730 shops. Annual sales have already reached £80million and are expected to climb to £101million before the end of the financial year.

© Fair Investment Company Ltd