The return for the past three years is 14.5 per cent a year, a real return of 11 per cent per annum for the average charity.
Across the year, the highest equity returns were in the UK, Europe, the Pacific Rim and emerging markets. UK government bonds produced returns of between 1 and 2 per cent, and property remained a strong performer throughout 2006, finishing above 17 per cent.
Charity funds constrained by income requirements produced returns for the year that were 0.5 per cent higher than those without such constraints.
"After a strong start, markets fell back in the second quarter due to inflation concerns before recovering over the second half of the year," said Michael Walsh, managing director of WM Performance Services.
"The total charity return for 2006 is the fourth consecutive double-digit annual return. A favourable economic backdrop, positive corporate news and strong merger and acquisition activity supported equity markets."
John Hildebrand, head of charities at Investec Asset Management, said: "2006 has been another good year for charities. Those that invested in equities should have benefited from good growth in capital and income.
"Charities that have diversified into property have also done well."