A Burntwood councillor has warned the voluntary sector cannot be used to "deliver services on the cheap".
A number of local authorities, including Lichfield District Council, are being forced to make tough decisions over which services they can continue to deliver.
With more Government cuts expected in July, it could be left to local charities and voluntary organisations to pick up the pieces of those areas which can no longer be delivered by councils.
But the Labour group leader on Lichfield District Council, Cllr Sue Woodward, says the imminent demise of Forward Action Burntwood shows the third sector cannot provide all of the solutions without significant support.
"There is a misunderstanding on this idea of the Big Society," she said. "There seems to be an idea that somehow you can get the voluntary community to deliver services and it can be done on the cheap – but that's not the case.
Forward Action Burntwood decided to call it a day after highlighting a lack of volunteers to take on many of the tasks involved in staging events and running the group.
Cllr Woodward insisted councils needed to provide support to organisations to help them become sustainable.
"No matter who supplies the services, you've got to have a similar level of investment to provide the infrastructure needed," she said.
"Community and voluntary groups only work long term if there are paid staff organising and pulling it together, otherwise it's very fragile.
"Forward Action Burntwood was supported in the background by Lichfield District Council when it was first set up and there has been lots of council taxpayer investment.