This has started a debate about whether they are being over-cautious and whether now might be a good time for some strategic investment in equities.
Biman Mittra, finance director of children's charity Coram and a former private equity specialist, believes charities should be cautious. "I would be ecstatic to have 100 per cent of my money in cash right now, considering the current market volatility," he says.
"If you aren't a sophisticated investor, it's wise to have a degree of prudence coming out of the bottom of the market."
But Mittra supports the view that, in the long term, too much charity money is invested in cash. "Some people who have a reasonable pot to invest are too cautious," he says. "Trustees see safety, but they forget that it is acceptable for trustees to take calculated risks to maximise their charities' income."
Meanwhile, investment firms say charities should be buying equities. John Kelly, head of client investment at social investment firm CCLA, says the sector has had too much money invested in cash for years.
Even more cash is currently being held because of its low risk, defensive properties and high current income, he says.
"This is a tactical decision," says Kelly, "but it's not strategic. Cash rates are unnaturally high because there is a capital shortage. But interest rates could drop more sharply than anyone expects, meaning cash will be much less attractive.
"If you are a charity with a view to tomorrow, you should be buying equities."
Richard Maitland, head of charities at investment management firm Sarasin & Partners, agrees. "If you're holding cash right now, you should be delighted," he says. "But this is exactly the point at which charities holding cash should be looking at what happens next.
"Many charities have significant cash deposits, often for very good reasons. But others are holding genuinely long-term assets in cash. This would be a good moment to look at whether some of these monies would be better invested in real assets."