The volunteering charity TimeBank has revealed that its application for £500,000 from the government's strategic partners programme has been unsuccessful.
The Office for Civil Society is considering whether to publish the names of other applicants that have also been ruled out at the first stage. The announcement of successful applicants will come on March 21.
TimeBank was among the 42 organisations that previously received programme funding and were eligible to reapply for funding of up to £500,000 a year until the programme’s closure in 2014. Funding will be given to 14 organisations at most.
TimeBank issued a statement saying it was "mystified" at the loss of funding, which was a "devastating blow". It said it would "create a petition to save the charity."
A TimeBank spokeswoman said it was not yet clear whether the loss of funding could lead to the charity’s closure. She said it was taking legal advice on appealing against the OCS decision.
She said the loss of the funding, which represented 25 per cent of the charity’s income, meant it would be thinking about redundancies, but it was not yet clear how many or which areas of the charity’s work would be affected.
"We hope that we won’t have to close down," she said. "We will scale back our work and could make redundancies, but we will do everything we can to keep going."
The strategic partners programme - set up in 2005 to fund voluntary groups to advise ministers, carry out research and promote the voluntary sector - gave out grants worth £12.2m in 2010/11. Some charities, including Volunteering England, CSV and the NCVO, received more than £1m from the scheme last year.
A spokesman for the OCS said it had not yet decided whether to publish a full list of the organisations that had already been told they would not receive funding.