There has been a 40% cent drop in donations to charity in the two weeks since the scandal of top-ups to executives' salaries was revealed.
Fundraising Ireland said things have reached crisis point in their sector and charities are taking calls every hour from people looking to cancel donations or complain in reaction to the controversy.
Anne Hannify, CEO of Fundraising Ireland, said it was a "crisis situation" for the sector at this time of year, and the story is having a knock-on effect on other causes.
"We are really frustrated that this one incident can have such a massive impact," she said.
"We need a regulator, we need more transparency, more openness… the public have a right o know where their money is going."
The group says the issue has undermined the years of work that charities have undertaken.