Batmanghelidjh, founder and chief executive of the Kids Company, said some philanthropic business leaders posed one of the greatest threats to the sector by demanding results in return for their money.
Batmanghelidjh told delegates at the NCVO conference last week that she had met wealthy philanthropists who had told her to impress them before she could receive funding from them.
"Business leaders who have suddenly made lots of money can believe they have a profound understanding of social issues, and often tell the third sector what outcomes they want," she said. "In trying to get their money, we are forced to keep out our clients who are really needy. We can't collude in sustaining the rot of materialism." But Salvatore LaSpada, chief executive of donor education organisation the Institute for Philanthropy, said the issue of prescribed funding was a problem that extended beyond rich individual givers. "It's a seismic problem across the sector," he said.
LaSpada admitted that some philanthropic business leaders were guilty of pressurising charities to deliver results at the expense of the needs of beneficiaries, but said some local and central government funders behaved in exactly the same way.
Megan Pacey, director of policy and campaigns at the Institute of Fundraising, said self-made philanthropists posed a challenge to charities. "If these individuals can't find a charity that does the work they want, they often set up their own charities," she said.