But they are also becoming less conservative in their investment strategies, looking to alternative assets such as property and hedge funds and reducing their reliance on shares.
The annual JP Morgan Fleming Asset Management sector survey has found that charities expect an average return of 6 per cent over the next three to five years.
This is despite WM Company figures that show respective average returns of more than 11 per cent and 17 per cent in 2003 and 2004.
Jeremy Wells, head of charities investment at JP Morgan Fleming, said: "Return expectations among charity investors have been adversely affected by the stock market returns in the first part of this decade, with many becoming overly cautious when predicting future returns."
Charities' wariness when it comes to the future of their investments is not simply academic - predictions will influence spending plans for the coming years.
However, the survey did uncover good news for the current state of charity investments.
Seventy-seven per cent of respondents reported that their assets had increased over the past 12 months, whereas only 23 per cent noted a decline.
The majority saw their assets grow by between 1 and 10 per cent.
Despite modest predictions, the poll revealed that charities are becoming more adventurous when deciding how to invest. For the first time, more charities prefer pooled funds to segregated management - 34 per cent to 28 per cent. They are also reallocating to alternative assets - 44 per cent said they had property investments, and 16 per cent said they had bought into hedge funds. Meanwhile, 56 per cent had reduced their exposure to equities.
"Charities are taking a proactive approach," said Wells. "Belts are being tightened and alternative investments are becoming more prominent on a charity's radar as a source of enhanced returns. Pooled funds are becoming increasingly popular as a way of cutting costs and investing in a wider range of investment strategies."
Most charities said they find it harder to raise funds than they did five years ago. But 10 per cent said they find it easier, compared with 1 per cent two years ago.
JP Morgan interviewed 110 organisations with assets of more than £11.1 bn.
A JP Morgan Fleming Asset Management survey has found that charities are expecting average investment returns of 6 per cent over the next three to five years
This is despite figures of 17 per cent for 2005 and 11 per cent for 2004
77 per cent of respondents reported asset growth over the past 12 months
More charities prefer pooled funds to segregated management: 34 per cent against 28 per cent
44 per cent of charities have property investments.