``They haven't got enough money,'' chairwoman Marian Hobbs said of the Dunedin trust, which provides peer support for up to 80 people.
``We've had to close our books temporarily as we just haven't got the resources to cope.''
Ms Hobbs said the Southern District Health Board, despite being in ``huge trouble'' financially, managed to give the trust a funding increase this year.
But it was not enough.
``Dear God the need out there is huge.''
Ms Hobbs said she admired the peer support team for the way they worked with clients.
``They treat them with such dignity, it's just amazing to watch. It's really powerful.''
More mental health funding needed to be allocated to the community, rather than hospitals, she said.
``I would love an honest discussion [about funding].''
DHB mental health general manager Louise Travers, in a statement, said most community-based providers were reporting increased demand.
``In responding to how we meet this demand, Raise Hope, the Southern DHB strategic plan for mental health and addiction services in the southern area, will guide the Alliance South mental health and addiction network in their leadership role within the sector as it is implemented,'' Ms Travers said.
