"They represent a huge monetary discount for the Department of Conservation [DoC]'s budget and therefore real value to the New Zealand taxpayer," PFNZ chairman Sir Rob Fenwick said.
"But, according to this report, they're losing interest and they feel taken for granted."
Small groups are expected to write exhaustive applications and reports for limited amounts of money.
"And if they're successful, they're generally funded in arrears, which is tough on cash flows of small organisations.
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"Funding agencies aren't joined up to common goals within a region and so the impact of voluntary conservation is seldom measured and no one, including the volunteers, is measuring how effective they are."
The report called for better support structures, a new system where funding was prioritised based on ecological need, and a clear strategy with set objectives that could be checked against.
"Ideally, our public agencies would lead the way on this, and other funders could fall in on that approach if they wanted to," said the report's author, leading ecologist Dr Marie Brown.
"This is important because it means the resources going into community conservation will achieve a greater degree of improvement to biodiversity."
It also recommended a nationwide network of "hubs" to support efforts in each region - and potentially a national support unit that could help with everything from legal matters to technical advice.
Brown said failing to fix funding problems could leave community groups and landowners facing constant frustration - potentially leading to a withdrawal of community effort.
But a stronger focus on strategic planning could bring faster change for the benefit of all - "most particularly our natural heritage".
Conservation Minister Eugenie Sage agreed improvements were needed, and that funding processes should be better co-ordinated across agencies.
Some work has already been done to differentiate the Ministry for the Environment and DoC's community funds - the latter which Sage wants strengthened so it is easier to apply for funding, while ensuring public money is being well spent.
DoC has also developed a "national landscape strategy" so community conservation efforts can focus on areas with high ecological values.
But Sage did not see a case for a new national entity - and believed community conservation could continue to be led by national groups with a network of local branches, and by regional organisations such as Wild for Taranaki and iwi.
"Increasingly these umbrella groups are sharing information, and encouraging collaboration and co-ordination across agencies, iwi and funders to agree on outcomes, priorities and plans."
Vanishing nature
• New Zealand is a biodiversity hotspot and boasts one of the most comprehensive natural inventories on the planet.
• But of our native species, 81 per cent of birds, 72 per cent of freshwater fish, 88 per cent of reptiles, 76 per cent of marine invertebrates and 39 per cent of vascular plants are either threatened or at risk of extinction.
• We've already lost 32 per cent of our land birds and 18 per cent of our seabirds, along with 12 invertebrates, possibly 11 plants, a fish, a bat and perhaps three known reptiles.
