Cuts in government funding could force 24 after-school care programmes run by Kidicorp to close.
Kidicorp owner Wayne Wright says its latest application for $200,000 of Ministry of Social Development funding has been rejected.
Mr Wright will have to put forward $400,000 to cover the cost of the service to keep it running.
"The parents can't afford to pay more than $75 or $85 per week, and it costs us considerably more than that to provide the programme," he said.
Kidicorp operates a pre-school programme and moved into after-school care in response to parental demand.
"We are there to make a difference in the lives of children. We are only interested in it breaking even," he said.
The after-school School's Out programmes run in Auckland, Taupo, Rotorua, Taranaki and Hawkes Bay and around 400 children attend.
Parents pay between $4 and $7 an hour to send their children to the programme and Mr Wright said he put in an equal amount to meet the funding shortfall.
Kidicorp is part of the Oscar (Out of School Care and Recreation) programme - meaning its service is recreation-based.
"It's ridiculous, parents are encouraged to go back to work but there is no adequate support for those with primary school children," Mr Wright said.
Petra Zaleski, a full-time honours student, has no family in New Zealand to help with care of her 9-year-old daughter Natasha while she is at her afternoon lectures.
Natasha attends the Schools Out programme at St Lukes and Ms Zaleski said it was "integral" to their lives. "If we lost that it would be huge," she said.
Solo parent Sandra Fisher of Sandringham also said she would be "gutted" if the St Lukes Kidicorp centre her daughter attends is shut.
She said there was a shortage of options for parents who rely on after-school care compared to those with pre-school children.
Ms Fisher has no family in Auckland and her only other option would be to send Ella, 7, to her school's programme but as a parent she would rather not have to force her children to stay behind after school. "You go through a guilt trip enough as it is."
Oscar Foundation chief executive Murray Upton said the sector would collapse unless it was well supported and well serviced.
Oscar had seen dramatic growth over the last three years and the number of government-funded programmes had doubled.
"If the current Government's number one plan to deal with the economic crisis is to get people into work that's going to create even more demand for Oscar services," he said.
Keith Thorpe, executive director of Youthtown, which runs four after-school programmes for 250 children, said the organisation's funding for 2009 was down on last year.
"Clearly there's not enough funding to cover the sector," he said.
The YMCA said it would also find the next two years "a challenge".
"There is an urgent need for those programmes to be well supported and a very strong infrastructure put in place," a spokesperson said.
The Ministry of Social Development was unable to comment.