Ms Batmanghelidjh told the Observer that unless the government committed to a long-term funding package, Kids Company would be forced to close in March 2008. A Downing Street spokesman responded by branding Batmanghelidjh's concerns "a little premature".
I think the government has a smidgin of a point. Most charities survive on less than 12 months' anticipated income. Too much money in the bank renders a cause insufficiently needy and makes it harder to persuade besieged charitable trusts and foundations to part with cash. Too little in the bank creates uncertainty - about jobs, projects and, as in the case of Kids Company, about whether the charity can continue to operate.
The optimum funding situation for any charity appears to require six to 12 months' running costs in the bank and a number of "guaranteed" outstanding payments due from previous successful applications in the pipeline. By this measure, it seems that Kids Company is just on the edge of the slippery slope into crisis. Yet, each year, thousands of charities reach the same stage and still manage to pull back from the brink in time to avoid disaster.
Perhaps that is why the government is giving an impression of such complacency in this case. It knows that Kids Company is a much respected, high-profile charity with a dedicated and charismatic leader. No need to worry just yet, I guess the decision makers must have been thinking when the Downing Street response was made.
But Ms Batmanghelidjh is worried. And she is exhausted. It took 4,700 applications last year alone to raise the £4.5m annual running costs. Thousands of other bids were unsuccessful. In years past, she has twice re-mortgaged her flat to keep the charity alive. She has no savings, no personal assets of high value and yet, for more than a decade, she says she has "done the job of four people".
At a time when our society is crying out for solutions to problems created by disaffected young people, when the lives of more children are being blighted by drugs and alcohol than in any previous generation, and when knife and gun crime committed by adolescents is escalating out of control, there has possibly never been a greater need for a charity dedicated to the rehabilitation of socially damaged children.
How can it be then that an organisation that promotes such a noble cause and has such a selfless leader at its helm should be struggling for funding? One answer lies in the complex application processes that many trusts and other funding sources employ in order to prioritise and eliminate unsuited bids.
The majority of the big funders, including the Esmée Fairbairn Foundation and the numerous Sainsbury trusts, insist only on funding "projects" which have particular durations and measurable outcomes. While this is a perfectly reasonable means of ensuring that the donor's money is used as effectively as possible, it makes it harder to find "unrestricted" funding for the salaries of the charity's staff.
"I can't just say I want permanent salaries for the workers who re-parent these absolutely desperate children," says Ms Batmanghelidjh. Yet without staff, projects cannot be supported and administered. The resulting imaginative and creative wording on funding applications then adds a sad note of disingenuousness to the relationship between funders and funded and both know this.
Another answer lies in the attitude of potential funders to the charity's cause. Ms Batmanghelidjh said that one company looking to donate £50,000 refused her application. She says they said: "Your kind of children don't look good on our annual report" - a stance which beggars belief, as any right thinking individual would surely be proud to support an organisation that exists only to assist the most disadvantaged children in the community. It is a shame that Ms Batmanghelidjh did not have the temerity to name the company involved, but she would not be the courteous, discreet and dignified lady that she is if she had.
Last year, Kids Company helped more than 11,000 children and 800 parents and teachers. Since 2000, 15 independent valuations of the charity's work have been undertaken and all described it as "outstanding". Even the Metropolitan Police force acknowledges the impact Kids Company has had on reducing crime rates and has asked the charity to consider extending its opening hours.
Ms Batmanghelidjh's decision to go public about her fears for government funding was not a stunt or a gimmick, but a cry from the heart for help, not for herself but for suffering children. To show it cared as much as she does, the Downing Street spokesman could have been a tad more reassuring.
