A report by the chief executives' body, to be published on 30 November, will show examples of voluntary organisations being crippled by short-term contracts and stifling bureaucracy.
The Surer Funding report contains only three examples of good practice from the 200 service-delivering charities surveyed.
Horror stories include small charities having to file up to 40 government reports each year and being forced to sign 200-page contracts for sums as little as £2,000.
"We should worry that contracts don't support the work the Government wants us to do," said Nick Aldridge, Acevo's head of policy. "It's vital we sort this out, otherwise none of the service delivery work we do will have any value."
The report will be presented to Labour MP and election strategist Alan Milburn, for whom it will make uncomfortable reading. The Government has made increased service delivery the central plank of its voluntary sector agenda, which is likely to be reinforced in a public health agenda White Paper out this week.
Acevo set up an inquiry in January led by Ed Mayo, chief executive of the National Consumer Council, to investigate government guidance on service delivery.
The report will say the guidance hasn't worked, mainly because charities have been left to bear the brunt of the risk.
In one instance, a charity running a residential care unit for the severely disabled had been forced to put up its unit as collateral when it received a 12-month contract to provide new services.
Aldridge said charities were at the mercy of "out-of-control" bureaucrats holding the overwhelming balance of power in negotiating and enforcing contracts.
Surer Funding proposes that both parties agree the length of contracts and share the risk, with penalties for funders that don't comply.
Aldridge unveiled the report's findings at last week's Charities Aid Foundation annual conference.
In a separate seminar, Mayo condemned the "systemic insecurity that is imposed on the voluntary sector by local authorities" and cited a charity that had to sign a 64-page document for a contract worth £150 a month.
See CAF Conference News, p4; and Editorial, p17.