Consultant Broadstone says the figures suggest a “significant portion” or charity assets are potentially sitting idle.

Broadstone looked at UK charities with an annual income of at least £0.5 million. Together these charities had a total of £250 billion in assets, of which 13% (£31 billion), was held in cash.

The firm said that, as a result, the charities were potentially missing out on the financial benefits that can be gained through investing.

Broadstone says that charities could have benefited from £1.5bn of investment returns over the past year, assuming the £31 billion held in cash was not accruing interest and was instead shifted into a typical Money Market Fund offering 5% returns in line with market rates of interest.

Broadstone says its analysis revealed that approximately 58% of the 12,973 UK charities sampled did not hold any long-term investments.

Some 59% (£147 billion) of the assets held by these charities are deemed as unrestricted, meaning that the assets that can be invested as the trustees see fit to benefit their charitable purpose.

Because of the failure to investment many charities are losing out long term on the returns that can be accrued by investing their assets, Broadstone said.

Rachel Titchen, charities and investment director at Broadstone, said: “Most charities see cash as the safest and most reliable financial vehicle to store their assets, but in reality, it may be holding them back from achieving their charitable objectives.”

Broadstone has urged charities holding large amounts of cash to seek professional financial advice to make their money work harder.