The Government has stood by the not-for-profit sector and has promised to focus on "cutting through the regulations and bureaucratic red tape", as charities face closing their doors for good amidst the country's economic recession.

Described by sector experts as "dire, reaching existential”, charities have been demanding hefty fees from donators to keep their services running. Starjam, a long-running charity supporting young people with disabilities, said this week it was looking for $100,000 from its supporters to stay alive.

Its CEO, Gilli Sinclair told Newstalk ZB the charity since received an "overwhelming" amount of financial support from the public with a donation windfall of $70,000 in the past 24 hours.

"I think, like many charities, we're dealing with the current economic climates, cost of living, increased costs of doing business and reduced funding streams," said Sinclair.

When asked by Newstalk ZB if New Zealand has too many charities, Sinclair said most of the country's charities were doing "a really good job" and were completing good work.

"There are a lot of charities in New Zealand though."

However, Community and Voluntary Sector Minister Louise Upston told Newstalk ZB Plus that New Zealand's focus shouldn't be on whether there were too many charities but on their national impact and how resources are being dispersed.

She said the number of registered charities is at its highest at 28,500, although she understood that figure "has been reasonably stable" over the years and largely reflected population increase.

"Charities are self-governing organisations. Government, however, provides the regulatory framework that enables them to continue to provide benefit for the community," she told ZB Plus.

"As minister, my focus will be on cutting through the regulations and bureaucratic red tape that charities must deal with, to make it easier for them to operate and make sure the money they do have goes a lot further."

Charities lawyer Sue Barker strongly rebutted the claim that New Zealand has too many charities requesting public donations.

"I think that's a great myth that I would love to dispel," she told the Mike Hosking Breakfast.

"There are absolutely not too many charities in New Zealand. We have 600,000 companies and [up to] 500,000 trusts, so why is 28,000 too many charities in New Zealand? Where has this myth come from? I think it's a misconception."

Barker said the charity sector could be described as "dire and reaching existential" and noted that charities varied widely on size, mission, location and activity.

She said the real fight was with the small charities, but that most charities in New Zealand are small anyway.

Their struggles, Barker believed, could be attributed to people struggling to put food on their own tables, let alone affording to donate money to help resolve that problem for others.

Charities also have challenges when it comes to recruiting help, Barker said.

"[They're] facing increasing pressure on volunteers as people are busier and have less time to volunteer for a charity. They're also facing declining revenue streams," she said.

"So it's a perfect storm."

The Government will often provide contracts to different charities to perform public service work in their local communities, although Barker pointed out these contracts often won't cover the full expense of providing the actual service's contractor force.

This means charities are often dipping into their own savings to make up for shortfalls.

“Government contracts generally haven't been uplifted for the increased costs due to inflation, so it's really tough for them out there."