The minister for civil society, Rob Wilson, has said charities too often focus on “outdated operating models”, and are too reliant on public grants that are “unsustainable in the long term”.

Wilson was speaking at Charity Finance Group’s annual conference for its opening keynotes, where he said that charities need to be more robust, and be reliant on more varied sources of income.

He said: “Too many charities are focused on outdated operating models that are dependent on one or two sources of income, and are just one pay-cheque away from insolvency.

“Too many charities are relying solely on grants from the public sector, a way of working which is simply unsustainable in the long term. It is vital that we prioritise investing in organisation and development, building stronger leadership and governance. Creating more robust strategic plans and implementing more effective business models.”

He said that if the sector does not do these things it risks failing those that need its help the most.

The minister told the room of finance professionals that he was on their side. “I’m not going to stand here and pretend that there isn’t a lot of work to do, or to reassure you about some of the changes that government is making. But I do want to reassure you that I am personally, and the government is, on your side.”

He said that although many charities “feel bruised from the events of the last year”, he wants to reassure them that he is “absolutely committed” to working with the sector to “get the best out of the inspiring work that it does every day”.

He added: “The driving force for us is the same – our desire to help those most in need.”