Four charity umbrella bodies have called on the government to provide more funding for the Charity Commission, but said this should not come from the regulator charging charities for its services.

A letter from the chief executives of the Charity Finance Group, the charity leaders body Acevo, the local infrastructure body Navca and the Small Charities Coalition, sent on Friday to Liz Truss, the chief secretary to the Treasury, asks for an increase in the grant given to the Charity Commission.

The regulator’s funding has been reduced by about £8m on the figure it received in 2010, and has been frozen at £20.3m a year until 2020.

The letter says effective regulation is crucial to effective regulation and to public confidence in charities.

“Unfortunately, the government is currently putting at risk the billions raised by the public and tens of millions of volunteering hours, by drastically cutting the Charity Commission’s budget over recent years and now freezing it until the end of the decade,” the letter says.

“This is despite rising demand for its services and inflation eroding the real-terms value of the grant given by government.”

It says the solution to the problem of declining resources is not what the letter calls a “charity tax” that “forces charities to hand over donors’ money to subsidise the regulator and threaten its independence in the eyes of the public”.

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William Shawcross, chair of the Charity Commission, said in September 2015 that it was inevitable charities would have to make a financial contribution to the regulator’s services.

He subsequently said in an interview, published in January, that charities in England and Wales might have to pay a levy of up to £3,000 a year to fund the regulator, with a consultation on the subject due “in the near future”.

The consultation has still not been published, due in part to delays caused by the snap general election earlier this year.

The letter from the four charity umbrella bodies says increased funding for the commission should be spent on more public outreach so people have greater confidence in the regulation of charities and to ensure that trustees are supported in understanding their responsibilities.

“The sums involved in funding the regulator from the government’s perspective are modest,” it says. “But the contribution made by the charity sector is substantial.”