The next government should change commissioning rules so that local charities can compete with large, national organisations to run services, according to the Directory of Social Change.
The policy is one of five pledges the training and advocacy charity wants political parties to commit to in the run-up to next year's general election.
The DSC is also calling for the Office of the Third Sector to be given sufficient "power and capacity" to exert more influence over other government departments, and to have more parliamentary oversight of policy.
The other pledges involve making the terms and conditions of grants and contracts available to applicants before they apply, carrying out research to discover what charitable causes the Government is supporting and avoiding what the DSC calls "nonsultations" - consultations it claims have no influence because the outcome has already been decided.
The charity says the pledges can be met at little or no cost and will improve the efficiency and effectiveness of government's relationship with the sector.
Ben Wittenberg, director of policy and research at the Directory of Social Change, said: "Charities are routinely constrained by the processes of government, ways of doing things that inhibit efficiency, choke innovation and trap both sides into repeating the same expensive mistakes.
"There is no call for funding here. In fact, most pledges would require little or no cost and would offer huge returns to both the voluntary sector and government."