Bruce Moore, the chair of the board at the aid think-tank, says the reason is simple: loss of federal government funding.
"We have not been able to find other sources of funds of a sufficient amount to fill the gap that has brought us to this point," he said in a phone interview.
"The gap [came about] because the government has turned down our requests to be one of our significant funding partners."
Moore says the institute, which has operated for 40 years, has been in negotiations for two years with the office of Christian Paradis, minister for international development.
He says they learned in the last two weeks that their funding would not be renewed.
A call to Minister Paradis's office was not immediately returned.
Funding had been diversified
Moore added the institute has made major strides in diversifying its funding sources in recent years, but without federal money it simply can't afford the overhead to keep its doors open.
"This organization has been seen to be a public good. And this is now being lost, " he said. "People feel that we ensure that we not rely upon opinion, but combine the experience of development practitioners with the evidence of data-based research."
The group had been active as a think-tank since 1976, funding research both in the developed world and building capacity for research in the developing world.
The think-tank has won awards for its work. For example, in 2012 it was named "the world's top think-tank with an operating budget under $5 million" for the second year in a row, according to a release yesterday.
It's been several years since the federal Conservative government decided to defund some established Canadian aid groups including Kairos and the Canadian Council for International Cooperation.
At the time, in 2010, there was furor over what was deemed to be "punishment" by the Conservative government for organizations it felt were politically offside.
Kairos, in particular, was accused in a speech of being anti-Israel by then-immigration minister Jason Kenney.
The government later denied its actions were politically motivated.