The proposed closure of two villages used to help heal traumatised children comes after the organisation gave staff pay rises last year.
Children's charity Stand is proposing to close two of its villages in Otaki and Roxburgh in June. These provide a residential trauma-focused treatment programme for children aged 5 to 12 who need support to recover from trauma.
If the proposal to close proceeds, 63 jobs will be lost across both regions and 380 children a year will miss out on the programme.
The organisation would continue to operate its Intensive Family Wraparound Services in the central and southern regions as well as five other villages around the country. The charity assists around 3500 children a year who are referred to them.
Stand chief executive Dr Fiona Inkpen said financial pressure had mounted as they had not had a funding increase since 2009. They had been meeting shortfalls with their own reserves.
Then last year pressures increased as 450 staff were given a pay rise. The largest pay rise went to social workers to stop the outflow of experienced people.
"Pay rises were a priority for us to retain our specialist staff who support some of the country's most vulnerable children and families, but who've been among the lowest paid in the sector," said Inkpen.
"Our people deserve recognition for their work, and we needed to recruit and keep quality staff who make a real difference to these children's lives.
"Stand has been able to top-up Government funding for many years with prudent financial management and the sale of unused land.
"Unfortunately our reserves are now used up and we have made the difficult decision to consult with staff and the PSA about closing two of our villages."
Inkpen said they would be working with Oranga Tamariki and the Ministry of Education to rebuild services.
Stand gets $14.4million from Oranga Tamariki for their social services and $2.1million from the Ministry of Education for their education services. They have a $3million shortfall with $1million coming from operating costs and the other $2million being attributed to the pay rises.
Minister for Children Tracey Martin told Stand the funding required could not be secured at this time because of restrictions on the Government budget and that the responsibility for purchasing services from providers sat with Oranga Tamariki.
"Stand has been an iconic service and I was disappointed to learn of this situation when I became Minister.
"I am working with Oranga Tamariki to set up a national forum for NGOs and iwi to update them in more detail on our priorities and talk about how we work together to make the best use of what is always going to be a fixed sum of money."
Inkpen said in the event of closure they would offer redundancy or staff could apply to transfer. She added that Oranga Tamariki have also offered to identify employment opportunities for staff to consider.
A decision on the proposed closure would be made by May 15.
Inkpen wanted others to know that "we are not going away".
"It's our job to hope again, break the cycle of harm, heal hurt minds and build strong and resilient families."
Oranga Tamariki general manager of partnership Peter Galvin said the proposed closure was unfortunate but financial restrictions were the reality of the sector.
Stand is a nationwide provider of specialist services including intensive family wraparound, therapeutic social work, family therapy and childhood-focused trauma treatment.
Stand works with children and families to break the cycle of harm so children and families are safe, can recover from past trauma, reconnect with each other, and create a positive future together.
There are currently seven Children's Villages across the country: Whangarei, Auckland, Rotorua, Gisborne, Otaki, Christchurch and Roxburgh.
Stand also provide Family Therapy Services in the Midland, Central and Christchurch Regions; Kidzacool respite services in school holidays to grandparents raising grandchildren and kin carers; and Social Worker in Schools Services in Christchurch, Northland and Gisborne.