Most charities fold quietly, but the collapse of Kids Company provoked an angry march on Downing Street and a statement from an embarrassed Prime Minister defending the decision to give the charity £3m of public money only days before it closed.
"It was the right thing to do to give this charity one last chance of restructuring to try to make sure it could continue its excellent work," said David Cameron. He was considered by some Westminster sources to have been "mesmerised" by the colourful and high-profile Kids Company founder, Camila Batmanghelidjh.
She defended herself feistily, claiming that ministers promised money that never materialised, and has declared since the closure that she wants to "save elements of the project". But the media chipped away at her credibility and the crisis became terminal when news emerged of an investigation by the Metropolitan Police's sexual offences, exploitation and child abuse case team.
A final blow came when the Charity Commission announced that it would be conducting a statutory inquiry into the charity's affairs.
Alan Yentob, the BBC executive who has been chair of the charity for 18 years, also faced questions about his stewardship and admitted that it was "probably a mistake to operate hand-to-mouth with no reserves".
Charities were already under pressure over fundraising, so this episode is unlikely to enhance the sector's image and reputation. The diagnosis of the charity's ills by Third Sector columnist Craig Dearden-Phillips was founder's syndrome, weak governance and under-developed executive management. "Camila did not grow a cadre of senior people who could run a tight ship," he concluded.
TALKING POINTS: readers' responses to the main Kids Company stories
Batmanghelidjh denies poor management
Commenting on ThirdSector.co.uk, John Wright said: "What on earth were the trustees thinking? It is absolutely fundamental to good governance to maintain adequate reserves so that in the event of financial problems the charity can be wound down in an orderly manner and the staff paid accordingly. I thought Batmanghelidjh's interview with John Humphrys on the Today programme was a car crash, not just for Kids Company but for the charity sector as a whole. This is a high-profile charity that received significant financial support from the government. I hope people do not think that all charities are run in this way."
Comment: What went wrong at Kids Company?
Nick Posford said: "It's not enough to try to put all the blame on the government because, as any fool knows, having too many of your eggs in one basket is always problematic when it comes to funding. If, as seems the case, government funds accounted only for up to 25 per cent, and yet that was enough to cause the collapse, the charity definitely had big underlying issues that were nothing to do with politicians. The question the sector needs to answer is this: would your charity survive in similar circumstances?"
Amy Butterworth said: "This shines the spotlight on the trustees' role and how important it is for them to build a genuine partnership with the chief executive – even more so when the chief executive is a 'formidable force'."
Editorial: This could harm charities generally
Richety commented: "It appears to me that the charity became too big too quickly, without having structured its governance and management to manage the transition effectively. This was compounded by the fact that it seemed unable to refuse the increase in the number of clients coming through its doors, which might be an example of focusing on service delivery without enough attention to what an organisation is actually resourced to deliver. In short, it simply continued with unfunded work, assuming that a future tranche of funding would cover it, and lurched from one set of crises to another. It's a very sad case and I hope that its excellent work on the ground does not get buried and unrecognised under all these allegations."
Alan Yentob 'stood down to guarantee grant'
Less proud to be a FR commented: "Is this going to be the start of a new trend in which government grants will have conditions such as chief executives and other stakeholders being told to step down if they dare to criticise government policies in order to keep funding? This government continues to put its own interests over care for vulnerable people, and we should be very loud in ensuring this doesn't happen regularly."
David Coe said: "For anyone to be chair of a charity for 18 years is awful governance practice that should have been corrected."
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