The Home Office, which runs the grant programme in partnership with the Department of Communities and Local Government, informed organisations of the decision without consultation after the start of the financial year.
Charities that tackle drugs, antisocial behaviour, crime and domestic violence are among those affected.
Jessica Riddle, chair of Carlisle CVS and a Labour councillor on Carlisle City Council, said the situation was detrimental to collaboration between charities and public bodies.
"It is bad practice and it really puts a strain on partnership working," she said. "The Compact says there needs to be a time for negotiating, but the Home Office has not given anyone that time."
Funding for Carlisle City Council fell by almost £100,000. The council learned about the cuts a month into the financial year.
The Safer and Stronger Communities Fund distributed a total of £90m nationally through local councils in 2006/07.
One community safety manager who did not wish to be named told Third Sector that projects would have to be scaled back and that new schemes had "gone out of the window".
"It's difficult because obviously we had to start planning on the basis that the funding wouldn't change, but now it has," the source added.
Terry Hephrun, chief officer at the Burnley, Pendle & Rossendale CVS, said that Lancashire County Council had suffered a sudden £200,000 cut.
"It goes against everything the Government says in giving notice and goes against the principles of the Compact," Hephrun said.
Saskia Daggett, Compact advocacy manager at the NCVO, said the situation was disappointing and she strongly urged those organisations that were affected to get in touch with the umbrella organisation.
"The Home Office is our worst offender in Compact compliance," she added.
A Home Office spokeswoman confirmed that no local authority had been told about its funding settlement before the current financial year. She said the national figure for cuts "would be announced shortly".
"We regret the situation and recognise that it is unhelpful to local authorities and their partners," she said. "We are working to resolve the situation as soon as possible."