The Community Development Foundation will cut more than half of its staff as it when it ceases to be quango and becomes just a charity.
The CDF, which is currently both quango and charity, will lose its public sector status in April as part of the government’s cull of quangos, announced last year.
A spokeswoman for the charity said the workforce had to be reduced from 67 to 33 because it is losing the £1.5m in public sector grant funding.
Many of the staff who will lose their jobs have been employed to help the CDF deliver government programmes that are "coming to a natural end" at the end of March, she said.
"We can’t sustain it," the spokeswoman said. "Hopefully, we will get more programmes and scale up again if that is the right thing to do." The organisation is in the process of bidding for future government programmes.
The spokeswoman said the move to charitable status would give the organisation "more flexibility to work with the private sector that has vested interests in communities."