Gardening Leave said: "It has been well publicised that fundraising in the charitable sector has been very tough in recent months. Like many small charities, particularly in the crowded Armed Forces and Veterans sector, we have been finding it increasingly difficult to secure adequate, sustainable funding and, despite our best efforts, over the Autumn we have not received the level of income anticipated. This situation doesn’t look as though it will improve in the short or medium term.
"This financial uncertainty means we have had to make the difficult decision that it would be inappropriate for Gardening Leave to continue operations beyond the end of the year."
The charity employed 13 staff and has sites in London, Dundee, Ayr and Glasgow.
Income was £475,128 in the year to 31 March 2012, falling to £304,837 two years later. Spending also fell in that same period, from £511,011 to £267,657.
"Our priority now is to do the best we can for the Armed Forces veterans who attend Gardening Leave’s projects and our staff. We will be in touch with our veterans to discuss the alternative mental health support options available to them.
"We are in active discussions with other organisations about ways in which the services we provide to veterans may continue to be provided in the future. We will also have discussions with appropriate parties about the charity’s sites. We plan for a gradual and orderly wind down of operations over the next few weeks.
"This has been a very difficult announcement for us to make and we know it will be heartbreaking for all the charity’s staff, veterans, volunteers and supporters as well as the Trustees, particularly at this time of year.
"We would like to thank our loyal supporters who have fundraised and raised awareness of our work, as well as our dedicated staff team and our volunteers. Gardening Leave has achieved such a lot since it was founded in 2007 and we are all incredibly proud of the support the charity has provided to veterans in need over the years."