Cash isn't looking a very good bet against other types of investment right now, surmises Daniel Phelan.

Something else that must be making finance directors nervous is the continuing low returns on cash available and the stubbornly high rate of inflation in the general economy, let alone the particular fields of work in which charities tend to operate where it is often even higher. For a sector that loves to sit on lots of cash, this is becoming increasingly costly.

In this environment, it would be staggering if the juicy yields that the specialist charity property funds are carrying did not catch the eye, especially as the heart-stopping scares of recent financial history begin to recede in people’s minds.

Similarly the high-yield equity funds appear to be positioned to pay well into the future. Common sense would imply that companies capable of paying high dividends have good cash flows. They should also be more stable and resistant to downturns and credit squeezes, as well as able to continue investing and thus improving their relative market positions.

Of course, there are always risks in any investment and professional advice must be taken before plunging in. Will inflation turn to deflation and make you wish you’d hung onto that cash? Will equities take another tumble? Will commercial property crash as everyone increasingly works from home and buys their goods on the internet? Maybe all of those things will happen or none of them will. But one thing is certain, the purchasing power of cash is eroded by inflation and we seem to have plenty of that right now.

Daniel Phelan is editor-in-chief of Civil Society Media