If you're responsible for your church's finances, the idea of "investing" can feel like unfamiliar territory. Most church leaders came into their roles to serve their communities, not to navigate financial markets. But the reality is that many churches hold reserves, receive legacies, or build up funds over time, and simply leaving that money in a current account is rarely the best approach.
Church investment doesn't have to be complicated. At its core, it's about putting your church's money to work in a way that generates a return, protects its value over time, and, crucially, stays true to your values.
This guide walks through how church investments work in practice, what your options are, and what to look for when choosing how to invest.
Key takeaways:
- Churches are charities under UK law and can invest their reserves
- Pooled funds are the most common and practical option for most churches
- Faith-consistent investing means excluding activities that conflict with Christian values
- You don't need to be a financial expert to get started, but you do need the right partner
Can Churches Invest Their Money?
Yes, and in most cases they should. Churches registered as charities in the UK have both the power and the responsibility to invest their assets wisely. Under charity law, trustees have a duty to act in the best financial interests of the organisation, which includes making sure reserves aren't sitting idle and losing value in real terms due to inflation.
The Charity Commission provides guidance for charities on investment, and churches fall squarely within its scope. Trustees don't need to be investment experts, but they do need to take the matter seriously and, where appropriate, seek professional advice.
There are a few important distinctions to be aware of:
- Permanent endowment funds are assets that must be kept and invested rather than spent. Any returns generated can be used for the church's purposes.
- Designated funds are reserves the church has set aside for a specific purpose. These can still be invested while they're not needed.
- Free reserves are unrestricted funds the church holds beyond its immediate operational needs. These are often the most straightforward to invest.
The starting point for any church considering investment is to be clear about which category their money falls into, and how soon they might need access to it.
What Are the Main Investment Options for Churches?
Churches don't invest the same way a private individual might. There are specific vehicles designed for organisations like yours, and the right choice depends on your church's size, the amount you're investing, and your goals.
Cash and deposits
For money your church needs to access quickly, or funds you're holding short-term, cash deposits are the obvious starting point. Notice accounts and fixed-term deposits typically offer better rates than an instant-access current account, while keeping your funds relatively safe and accessible.
This is a reasonable home for operational reserves, but it's not a long-term investment strategy. Over time, inflation erodes the real value of cash savings.
Pooled funds
This is the most common investment route for churches, particularly smaller ones. A pooled fund brings together money from many different organisations and invests it across a range of assets, such as equities, bonds, and property. You buy units in the fund, and the value of those units rises and falls with the underlying investments.
The main advantages:
- Diversification - your money is spread across many investments, reducing risk
- Professional management - a fund manager makes the day-to-day decisions
- Lower minimum investment - you don't need a large sum to get started
- Simplicity - you don't need to pick individual stocks or bonds
For most churches, a well-managed pooled fund is the most practical and cost-effective option.
Discretionary portfolio management
Larger churches or those with significant endowments may prefer a discretionary portfolio, where an investment manager builds and manages a bespoke portfolio on your behalf. You agree the parameters, objectives, and any ethical requirements upfront, and the manager handles the rest.
This approach offers more tailored control but typically requires a larger minimum investment and comes with higher management costs.
| Option | Best for | Typical access |
| Cash deposits | Short-term reserves, operational funds | Instant to 12 months |
| Pooled funds | Most churches, medium to long-term | Regular dealing days |
| Discretionary portfolio | Larger endowments, bespoke needs | Agreed |
What Does Faith-Consistent Investing Mean?
For churches, investment isn't just a financial decision. It's a question of stewardship: how do we use what we've been entrusted with in a way that reflects our values?
Faith-consistent investing means applying Christian ethical principles to how your money is invested. In practice, this usually involves two things: screening out investments in activities that conflict with those values, and actively seeking investments that support positive outcomes.
Ethical exclusions
Most faith-consistent investment managers will exclude companies involved in areas such as:
- Tobacco production
- Armaments and weapons manufacturing
- Gambling
- Pornography
- Activities that cause significant environmental harm
The Church Investors Group, a coalition of UK church and Christian charity asset owners managing over £26 billion collectively, describes faith-consistent investing as going beyond general responsible investment to reflect specifically Christian ethical principles.
Positive impact
Beyond exclusions, many churches want their investments to actively support good outcomes, whether that's companies with strong environmental practices, businesses that treat workers fairly, or organisations contributing to community wellbeing. This is sometimes called ESG investing (Environmental, Social and Governance), though faith-consistent investing goes further by anchoring those decisions in Christian values rather than purely commercial criteria.
The key point is this: you don't have to choose between doing good and generating a return. Well-managed faith-consistent funds have demonstrated that ethical screening and solid financial performance can go hand in hand.
What Should Churches Look for in an Investment Manager?
Choosing who to invest with is one of the most important decisions your church will make. Not all investment managers understand the specific needs and values of faith communities, and a generic wealth manager may not be the right fit.
Here are the key questions to ask:
Do they understand the church sector? Managing church investments requires familiarity with charity law, the different types of church funds, and the governance responsibilities of trustees. Look for a manager with a genuine track record in this space, not one that treats you as a generic charity client.
What is their approach to ethical screening? Ask specifically how they screen investments. What activities are excluded? How do they handle companies that operate in multiple sectors, some of which may be problematic? Do they engage with companies on ethical issues, or simply exclude them? The answers will tell you a great deal about whether their values genuinely align with yours.
What are their fees and how are they structured? Investment management fees are typically charged as a percentage of the assets under management. Make sure you understand exactly what you're paying and what that covers. Transparency here is a good indicator of how the manager operates more broadly.
How do they report back to you? As trustees, you have a responsibility to oversee how your church's money is being managed. A good investment manager will provide clear, regular reporting that makes it easy for you to fulfil that duty without needing a finance degree to understand it.
Are they regulated? Any investment manager you work with should be authorised and regulated by the Financial Conduct Authority (FCA). You can check this on the FCA register before committing to anything.
How Epworth Investment Management Works with Churches
Epworth Investment Management Ltd (“Epworth”) was built specifically for organisations like yours. As part of the Methodist Church's Central Finance Board, Epworth has been managing church and charity assets for decades, with faith-consistent investing at the heart of everything we do.
We currently manage around £1.3 billion in assets on behalf of churches and charities across the UK, and our investment approach is shaped by the same values that guide the communities we serve.
What we offer
- Multi-asset funds - pooled investment funds designed for churches and charities, with ethical screening built in from the ground up
- Discretionary portfolio management - for larger organisations that need a bespoke approach
- Cash Plus funds - for churches that want a better return on short-term reserves without taking on significant investment risk
Every investment we make goes through our ethical screening process. That means no tobacco, no armaments, no gambling, and a genuine commitment to supporting companies that contribute positively to society and the environment.
Why it matters who you invest with
When your congregation gives to your church, they're trusting you to steward those resources wisely. That means generating a return that supports your mission, but it also means making sure your investments reflect the values you preach. The two aren't in conflict. They're the same thing.
If you're thinking about investing your church's reserves, or you're not sure whether your current arrangements are the right fit, we'd be glad to have a conversation.
Get in touch with Epworth to talk through your church's needs.
Please note: This article is for general information purposes only and does not constitute investment advice. Churches should seek professional advice before making investment decisions. The value of investments can go
Disclaimer: This article is intended for general informational purposes only and does not constitute financial advice. The information provided should not be relied upon as the basis for any investment decision. Religious organisations and their trustees should seek independent financial and legal advice appropriate to their specific circumstances before making any investment decisions. Epworth Investment Management Limited is authorised and regulated by the Financial Conduct Authority.