The group, chaired by Orlando Fraser, a patron of prison reform charity the Longford Trust, also said big charities diverted funding away from smaller organisations.
"Such conduct may be having a detrimental effect on the sector's image," the report says. "This could damage the sector as a whole, thus further weakening smaller organisations."
The report, launched by policy group chair and former Tory leader Iain Duncan Smith, also asserts that regulation affects smaller charities disproportionately.
Fraser's group has calculated that 13.2 per cent of Charity Commission inquiries are into groups with annual incomes of less than £10,000. In contrast, 1 per cent of inquiries are into charities with annual incomes over £10m.
The NCVO welcomed the report's focus on smaller organisations, but said it was wrong to say there was a lack of transparency, excessive salaries or hoarded reserves.
