Fund manager Chiswell Associates has produced guidelines for charities on evaluating the costs of investment management.
They cover charges for investment management, transactions, custody and administration and cash management.
Managing director Robert Brown said: "Charities can fall foul of fee arrangements where they pay costs to a whole range of people, such as an investment manager, a custodian and agency brokers. When this happens they cannot easily form a clear picture of their costs."
The firm is advising charities to bundle as many charges as possible together in an 'all-in' or 'clean fee' arrangement.
Meanwhile, consultant Charity Business is recommending that charities apply a long-term model when agreeing performance fees with their investment manager.
Rather than rewarding or penalising their investment manager each year, charity clients should negotiate a three- to five-year model, which could reduce volatility in returns. "Charities should be looking at long-term remuneration rather than instant gratification," said Charity Business chief executive Mark Freeman.