Government commissioners should favour bids by charities that pay staff a living wage, according to a plan to address "endemic low pay" in the voluntary sector.
Tackling Low Pay in the Charity Sector: An Action Plan, which is published today by the Living Wage Foundation, also calls on grant-makers to "champion fair pay" by ensuring funded projects pay staff a living wage.
The plan is based on the views of 300 respondents to an online survey run by the foundation.
Respondents – 80 per cent of whom were voluntary sector staff – identified government cuts and a "race to the bottom" by commissioners as one of two main causes of a squeeze on wages.
The other was lack of awareness about the living wage and public perception that charity work should be voluntary or low paid.
The survey was conducted after Low Pay in the Charity Sector, a report published in November by the foundation in partnership with 12 funders, the National Council for Voluntary Organisations and Cardiff Business School, revealed that 26 per cent of charity workers were paid below the living wage. The UK workforce average is 22 per cent.
The government's national living wage is £7.83 an hour for people aged 25 and over. It increases to £9.15 an hour in London.
The foundation says it should be £8.75 an hour (£10.20 in London) for everyone over 18.
The Scottish and Welsh governments, and more than 90 local authorities, consider the living wage as part of their procurement processes.
The report urges commissioners in Westminster to do likewise by giving "favourable weighting" to bids submitted by organisations that give employees a living wage.
Grant-makers, the report adds, should become "living wage-friendly funders".
It says: "Funders should make it clear in their criteria that, when applying for funding, charities are welcome to budget any salaries in line with real living wage rates."
Tess Lanning, director of the foundation, said low pay showed how charity work was often unappreciated.
"We now need to see government and the sector work together to deliver real change," said Lanning.