Chapman will tell today's Local Government Association conference on supporting a sustainable third sector that "there is urgent need for some of the warm words about the sector to be turned into action at all levels of government".
She will say: "We can expect to see financially unstable and unsustainable service providers, dwindling capacity to deliver public services and lack of capacity among sector organisations to innovate or improve quality. This will lead to service failure and closure."
Chapman will also urge charities that deliver services to let councillors scrutinise their work more closely.
Jessica Crowe, executive director at the Centre for Public Scrutiny, will say that all those who deliver services should give evidence to local council overview and scrutiny committees.
"As service provision gets more complex, it's more difficult for the public to understand who's providing a service and who they should go to if things go wrong," she said in advance of the meeting.