The Collapse of a Children's Charity Has Britain Wondering About Its 'Mother Teresa'

The London-based charity Kids Company seemed to epitomize what British Prime Minister David Cameron had in mind when he pledged five years ago to create a "Big Society" that would harness the power of the private sector to address social ills. Under a charismatic founder, Camila Batmanghelidjh, the philanthropic organization had grown from a storefront drop-in center to a £13 million ($20 million)-a-year operation fueled by donations from corporations, foundations, and celebrities such as Prince Charles, Richard Branson, and Coldplay. Kids Company's mission: help troubled kids who'd been failed by government programs.

Batmanghelidjh was at Cameron's side in 2010 when he announced that charities and companies would be invited to provide services traditionally furnished by the state. The government soon became Kids Company's biggest donor, giving the group more than £4 million each year even while trimming state spending on traditional social programs. Kids Company's budget grew to more than £23 million. A 2013 report by researchers from the London School of Economics praised Batmanghelidjh for the organization making "a substantial difference in the lives of its clients," with demand for services far outstripping its capacity.