Andy Elvin, chief executive of fostering and adoption charity The Adolescent and Children’s Trust (Tact), told CYP Now that the sudden closures of the two organisations has the potential to make service commissioners more reluctant to secure contracts with third sector organisations.
"Headlines like this make public authorities nervous about doing business with you,” Elvin said. "It is not a good thing because commissioners start to wonder whether the charity is going to be solvent.
"It is vital we can offer continuity of services and if there is a question mark over that, there's a problem.
"From a children's charity point of view, we want the world to know that we are not all like that, and there's no issue with the stability or solvency of many of us.”
Elvin is calling for the Charity Commission to investigate the circumstances behind the closures of both BAAF and Kids Company to provide some clarity on the precise reasons, so that charities will be in a position to reassure organisations they are working with.
His call follows Labour MP Steve McCabe writing to children's minister Edward Timpson about the way government contracts were transferred following the collapse of the British Association for Adoption and Fostering.
Labour has also called for an independent inquiry into the closure of Kids Company.
The precise reasons behind the closure of BAAF remains a mystery.
A statement issued by the charity on 31 July revealed that "significant changes and prevailing economic conditions" were to blame for its closure, but further details have not been forthcoming.
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