Fewer charities are being forced to sell off or cash in investments to meet rising costs, research is suggesting.

The value of investments made by charities has stabilised, after many relinquished stock market assets to meet day to day running costs after the Covid pandemic and during the cost-of-living crisis, it found.

The study has been carried out by Rathbones, which found the sector now has a collective stock market related investments of £4.074bn.

Among charity leaders surveyed, three in four say the value of their investments has increased over the last two years, while a quarter say the value had stayed the same.

This is in marked contrast to last year’s survey carried out by the wealth manager, which found that two in three said the value of their investments had fallen between 2021 and 2022. A quarter said the value “had dropped dramatically”.

Rathbones said that the biggest reason for the previous slide in the value of investment portfolios was charities selling them off or cashing them in to meet running costs and rising demand.

Just under two in three said their charity had cashed in or sold investments to meet the post Covid pandemic cost of living crisis and a drop in income.

Other factors in the slide in the value of investments had been “poor investment management decisions”, blamed by three in ten charity leaders. Half said the value of their portfolio had been hit by adverse stock market conditions.

Almost three in ten said they had cashed in assets due to a drop in income from their investments. Two in five said increased demand for their services had forced asset sales.

“The strength of the relationship between charity and investment manager has never been more important, as we help our trustees navigate through a challenging period and help them create a strategy that can meet their financial goals now, whilst also balancing the needs of the future,” said Rathbones head of charities Andy Pitt.

The survey of 101 charity leaders was carried out in May this year.

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