The Charities Act 2022 Explained: Permanent Endowment And Restricted Funds

In this blog we look at the changes to the rules affecting a charity's permanent endowment and other restricted funds.

What do you need to know?

Many charities, including incorporated charities, hold funds which are subject to restrictions in relation to how they may be spent. These funds can be established in different ways, including donations, legacies and fundraising appeals. Two common types of fund which may be held by charities are:

Permanent endowment funds – the capital of the fund must be invested and only the income generated from investment can be spent for the purposes of the fund (which might be the same or narrower than the purposes of the charity)

Restricted income funds – . the charity is free to spend the entirety of the fund but only for particular purpose(s) which are narrower than the purposes of the charity