Rising inflation in 2011 is likely to be a particular problem for charities with large cash holdings, finance experts have predicted.
The rate of inflation has risen significantly since last summer and is expected to continue on an upward trend.
James Brooke-Turner, finance director of the Nuffield Foundation, a charitable trust, told Third Sector that inflation was a "very significant concern" for permanently endowed charities such as his own.
"Most foundations will want to maintain the level of money they give away in real terms," he said. "However, inflation will erode that value. This is always a worry."
Pete Thomas, head of management accounts at the London Diocesan Fund, said inflation was a major issue for his charity.
"It means that your costs do not rise at the same rate as your expenditure," he said. "It is difficult to predict what your costs will be going forward."
He said inflation could also be a problem for fundraising charities.
"There’s a limit to the number of times you can go back and ask people to increase their donation, but inflation means that the real value of people’s donations decreases more rapidly," he said.
John Kelly, head of client investment at the investment house CCLA, said his organisation expected inflation to rise above 4 per cent in the spring and to remain above 3 per cent into 2012.
But he said that interest rates were expected to remain at a "derisory" level for a long time, and to still be less than 3 per cent in 2015.
Charities should consider moving their investments into "real" assets, such as equities and property, where any increase in inflation would also increase the value of the assets, he said.
Brooke-Turner said charities with restricted funds would face particular problems.
"Charities that have money put aside for projects will have to think about how they manage cash," he said. "It could drop in value considerably before a project gets started."
Kelly said that many charities had attempted to solve this problem by taking a small portion of restricted funds and putting them into high-income assets, while maintaining most of their cash in a secure fund with low levels of risk.