Fundraising website Bmycharity will close next week after the collapse of a deal that would have funded its expansion.
The site will be taken down on 19 March and charities whose supporters have raised money through it will receive the funds by April.
Ben Brabyn, managing director of Bmycharity, said: "We've had hundreds of new charities asking to join since we scrapped our commission charges. But we needed more staff and more technical resources and we haven't been able to raise the capital to fund these.
"A deal that was looking very promising has not materialised. The trouble is, we are a team of just two people and we operate in a market dominated by organisations with more staff and much bigger budgets."
The number of donation websites has grown recently, most notably with the launch of Virgin Money Giving in October last year.
Brabyn declined to reveal how much money was needed to run the service, saying it was still possible that an investor would step in to rescue it. He said he wanted to reassure charities that funds raised through the site were safe.
Bmycharity stopped taking commission charges in October and announced that it would be funded through sponsorship by businesses instead.
Earlier this month, the firm announced it had recruited its first corporate sponsor, financial services company Interactive Investor. Brabyn said the company had not pulled out of the sponsorship deal.
A statement on Bmycharity's blog said: "We'd like to thank the thousands of fundraisers and donors who have encouraged their friends to use Bmycharity, the hundreds of charities that have registered with us and the many suppliers and advisers who have contributed.
"Without additional resources, we've done all we can to contribute to the development of the market for online fundraising in the UK, and now the time has come to seek other challenges."