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HCB Group is widely respected across the UK for its expertise in a range of niche sectors including care homes, dentists and education.

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Endowment Funds

Permanent endowment: This means property (such as land, buildings, investments or cash) that trustees may not spend as if it were income. If a charity is permanently endowed, it can spend the income generated from the endowment and in certain circumstances can spend permanent endowment as if it were income.

Small unincorporated charities: The above rules on spending permanent endowment apply to unincorporated charities that either have an annual income of £1,000 or less, or where the market value of the endowment fund in question is £10,000 or less. The trustees can resolve to spend the permanent endowment without needing the Charity Commission’s consent. However, charities must first satisfy themselves that the purposes for which the endowment fund was created could be more effectively carried out by spending some or all of the capital. This does not apply to land held on trusts for specific uses.

Larger unincorporated charities: If a charity is unincorporated with an annual income in the last year of over £1,000 and the market value of the permanent endowment is over £10,000, slightly different rules will apply. It may spend permanent endowment, but to safeguard the interests of donors it must first obtain the Charity Commission’s consent. In deciding whether or not to allow a charity to spend the endowment, the Charity Commission must take into account any evidence of the donor’s wishes, as well as any change in the charity’s circumstances. The rules do not apply to land held on trusts for specific uses.

For more information about endowment funds, please contact our Charity Team.

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