The federal government and charities are at odds over the merits of new powers to crack down on unlawful behaviour.
The new regulations tabled in parliament on Tuesday are intended to punish organisations linked to unlawful actions, but charities argue they will instead wrap good work in red tape.
The minister responsible, Michael Sukkar, said Australians don't expect their donations to support organisations to break the law.
"These important regulatory changes will give Australians greater confidence that the charities they support will direct their resources towards charitable works," he said.
Under the regulations, the commissioner can investigate registered charities engaging in or actively promoting theft, vandalism, trespass or assault and threatening behaviour.
Tim Costello, chair of the Community Council for Australia, said charities played a vital role in holding governments to account and called for the laws to be abandoned.
"Giving the charity commissioner power to shutter a charity for a minor offence by a member is the equivalent of the electoral commissioner having discretion to de-register the Liberal Party because a Liberal Party member damages someone's lawn when putting up a sign," Mr Costello said.
A sticker on a lamp post, a vigil for a death or blocking a footpath at a protest could prompt action.
"Who they'll come after first is anyone's guess," Anglicare Australia boss Kasy Chambers said.
"They are not just an attack on charities. They are an attack on democracy."
Vinnies boss Toby O'Connor said unlawful acts were already covered by criminal law.
Oxfam Australia urged parliament to consider the very real impact on their own constituents.
"There is zero evidence that these new regulations are necessary, with adequate protections against things like fraud already in place," Oxfam chief executive Lyn Morgain said.
The not-for-profit organisations warn their time and donations will be tied up in administration and legal fees, depriving communities of vital support.
Mr Sukkar said charities would not be deregistered for "inadvertent or unintentional non-compliance".
"Education still underpins the ACNC's regulatory approach and revoking registration is reserved for serious or deliberate contraventions," he said.
Australian Associated Press