The governance of Britain’s £33bn ($50bn) voluntary sector is “not up to scratch” and charities could descend into crisis unless they rapidly strengthen their management boards, a report from an influential think-tank will claim on Tuesday.

New Philanthropy Capital, set up by a group of former Goldman Sachs bankers looking to improve the UK’s spending of social funds, says large charities should explore mergers as the recession bites to save money and protect vital services.