The youth work organisation said the sector needs to diversify how it is funded and work more closely with the private sector to ensure it can provide a long-term sustainable service amid cuts in local authority spending.
UK Youth wants to see social entrepreneurial approaches, including social investment, embedded in the sector and is particularly keen to see the formation of long-term partnerships between youth groups and businesses.
It also wants youth organisations to work more collaboratively with local and central government as well other as charities, to identify duplication of services and work together to support young people.
The plans are set out in UK Youth's State of the Membership report, which outlines the findings of a national consultation of its members that was undertaken following its merger with youth sector group Ambition last September.
"To develop the means to become a long-term sustainable service, this report suggests the need to work collaboratively with local and central government, other third sector organisations, and the private sector to embed social entrepreneurial approaches and secure additional income for the sector, for example through supporting access to social investment opportunities," states the report.
The report adds that it wants the sector to "identify collaborations and consolidations with complementary service providers and support partnership development through the brokering of relationships and identifying the duplication of services".
UK Youth said such action is needed due to the extent of cuts to council spending on youth services in recent years.
Since 2014/15 gross spending on the sector has fallen by 34 per cent. Over this period universal youth work has seen a 41 per cent reduction in council spending, while targeted youth work has seen a 26 per cent reduction.
The report also highlights how the youth sector has become heavily reliant on volunteers and calls for their training to be improved.
Among the 16,000 individuals working for UK Youth members, less than 400 are recognised as qualified by the Joint Negotiating Committee - the body that sets the national framework used to grade and pay youth work jobs.
"Youth-facing organisations are increasingly relying upon volunteers to maintain services," the report states.
"There is an urgent need to put in place the right infrastructure, support and training, to ensure that volunteers are being maximised to deliver the best services possible for all beneficiaries, whilst safeguarding young people."
Under the merger arrangements Ambition has become a subsidiary of UK Youth. Ambition's chief executive Emma Revie left earlier this year to join the poverty charity The Trussell Trust and has not been replaced.
The newly merged body is currently being led by finance director Alan Carr, who is interim chief executive until Anna Smee returns from maternity leave. Lindsay Levkoff Lynn, who had been interim chief executive, left the organisation earlier this year.