The National Council for Voluntary Organisations said in a statement that it had also instructed a QC to provide urgent advice on the proposed rules, which it said could have 'disastrous unintended consequences' for charities that speak out on local and national issues.
The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill, which will have its second reading in the House of Commons on 3 September, contains proposals to make it a criminal offence to spend more than £390,000 on campaigns that affect European, national and local elections.
It also proposes to introduce legislation requiring anyone spending more than £5,000 on campaigning activity to register with the Electoral Commission.
The NCVO had warned earlier this week that the bill could restrict charity campaigning and could even make it difficult to fundraise.
The umbrella body said that the bill’s definition of election campaigning was so wide that everyday charity activities could be caught.
After a meeting between the NCVO and Cabinet Office officials on Wednesday, the umbrella body has written to Chloe Smith, the minister for political and constitutional reform, to express its concerns and urge the government to reconsider the 'unworkable' bill.
Elizabeth Chamberlain, a policy officer at the NCVO, said the organisation decided to draft the letter after the Cabinet Office failed to provide sufficient reassurance at the meeting that charities would not be affected by the plans.
The letter says that raising awareness about issues and causes is part of charities’ routine work and central to their charitable objects.'
We are concerned by the broad scope of the proposed changes to the Political Parties, Elections and Referendums Act, and by their lack of clarity,' the letter says.
'The rules in the new bill risk seriously hampering their ability to speak up on issues of concern, including as part of their fundraising activities.'
The letter gives examples: for example, it says that a charity publishing a leaflet warning of the dangers of smoking could be caught by the proposed rules if smoking became a party political issue during an election campaign.
'We are seeking urgent legal advice in the interests of preventing this bill from having disastrous unintended consequences,' the letter says.
Sir Stuart Etherington, chief executive of the NCVO, said in a statement: 'The Cabinet Office tell us that charities’ normal work shouldn’t be caught by these rules, but it seems to us that there is a large and murky area of uncertainty.
'We urgently need clarity to prevent charities and community groups from becoming collateral damage in the government’s efforts to regulate political campaigns.'
A spokesman for the Cabinet Office said the bill was intended to bring greater transparency to third party campaigning.
'This bill does not include campaigning by third parties – charities or other organisations – that is not intended to promote, or could not reasonably be considered to promote, the electoral success of any particular party.
'So a third party campaigning only on policy issues, such as those quoted by the NVCO, would be exempt.'
The NCVO’s letter has been co-signed by 24 charities and representative organisations, including the British Heart Foundation and the Small Charities Coalition, but it will remain open for further signatures over the next few weeks, said Chamberlain.
This story first appeared on PRWeek's sister title Third Sector.