A world renowned agency that has helped refugees to settle in New Zealand for 36 years will be dissolved today and handed over to the Red Cross.

Refugee Services Aotearoa, which has 112 staff and hundreds of volunteers, has become a victim of tighter charitable and Government funding for social services, particularly the end this year of the Community Response Fund which kept many agencies going through the recession.

Last year it received the biggest single grant from the fund of $500,000, a significant part of its $4.3 million annual budget.

Red Cross has agreed to take over all staff from Monday except for three from Refugee Services' head office, including outgoing chief executive Heather Hayden.


"It has become more and more difficult for us to get the funding that we need to deliver a high-quality service from donations," she said.

"And internationally, when you look at organisations that are single-focused, that means a big risk that if you don't bring in enough funding you lose all the intellectual property that you have and highly skilled staff and so on. So we felt there was a real benefit in us becoming part of a much larger organisation."

The agency dates back to 1976 when Christian and Jewish organisations founded what was then called the Inter-church Commission on Immigration and Refugee Resettlement. It is now an incorporated society whose members include churches, refugee communities and other social agencies.

Ms Hayden said the agency approached Red Cross about a takeover in mid-year because it already provided refugee resettlement services in many countries including Britain, Germany, France and Finland.

Red Cross did "due diligence" on the agency and agreed to take over. Members of the incorporated society then voted unanimously to dissolve the society and hand over its assets to the Red Cross.

Red Cross marketing manager Ross Cameron said there would be no change in service delivery to refugees but efficiencies would be achieved by Red Cross taking over "back-office" functions.

Immigration Minister Nathan Guy will unveil a new refugee resettlement strategy at the Mangere refugee centre on Tuesday.