Charities are unhappy that their political campaigning could fall under restrictions for the first time.
Legal advice obtained by the National Council of Voluntary Organisations said it could have a chilling effect.
Helen Mountfield QC warns of uncertainty about what the bill means by “for political purpose”.
She said it could “put small organisations and their trustees/directors in fear of criminal penalty if they speak out on matters of public interest and concern”.
The Electoral Commission, which was not consulted, has warned the bill could be unenforceable.
Nick Clegg has said he will respond to charities’ concerns.
It said parliament must consider whether it wants the regulator to intervene to stop spending on political campaigning.
This could entail getting a website taken down or ordering a rally to be cancelled.