The commission's survey of reputational issues revealed that 37 per cent of the public surveyed felt charities played an essential role in society - up by seven percentage points from two years ago.
However, the strongest reason for distrust was revealed to be a perceived lack of transparency around the spending of funds.
The commission's head of press and public affairs Sarah Miller said: 'Charities need to do more to explain how they use their money and why they need the money. Charity communicators have a real role to play alongside their colleagues in conveying that.'
Carolan Davidge, brand and PR director, Cancer Research UK, said that the need for transparency in this area was more important than ever.
She said: 'A good relationship with the public is vital, especially with charities increasingly losing government funding and having to turn to more support from donors.'