The British Red Cross said the proposal by Nick Seddon (Third Sector, 7 February), a research fellow at right-wing think tank Civitas, would unfairly disadvantage successful charities.
Mark Astarita, director of fundraising at the charity, said: "Donors should be able to give to the charities of their choice and expect equal treatment in respect of tax.
"People are voting with their wallets. When they give to us, their giving should not be downgraded because we do our job well."
Astarita added that the British Red Cross played a "special legal role" because it helped the Government respond to international humanitarian disasters.
Bryan Dutton, director-general of Leonard Cheshire, accused Seddon of "fundamentally misunderstanding" the nature of government funding to charities.
He said services were based on individuals' needs, not government priorities.
Rosie Chapman, executive director of policy and effectiveness at the Charity Commission, said independence was determined by good governance as much as it was by government funding.
"Charitable status is about providing public benefit, sticking to your mission and using your assets appropriately and effectively," she said.
"It's also about campaigning to support these outcomes, which charities must be free to do."
- See Letters, page 17.