North London Itec, which provides IT training to black and minority ethnic communities, faces closure following the abrupt termination of £500,000 funding.
Stanmore College, which is funded by the Learning and Skills Council, provided the money to educate 900 adults in business management and IT.
Itec managing director Joe Okoli said: "The consequences of the decision to terminate our contract without adequate warning will have far-reaching ramifications for our local community and everyone concerned with our organisation."
The charity has 39 employees on long-term contracts and leases on three premises from which its programmes are delivered.
Umbrella body the NCVO said the last-minute withdrawal of funding breached the Compact, the agreement between government and the voluntary sector designed to improve behaviour towards one another.
All government departments, including the Department for Education and Skills, which is responsible for the Learning and Skills Council, are signed up to the Compact, which states reasonable notice should be given to changes in funding.
Millie Barrett, the NCVO's Compact advocacy officer, said: "If North London Itec's funder had acted in accordance with the spirit and the letter of the Compact, it would have to give at least three months' notice of the change to funding arrangements.
"This would have enabled the charity to seek alternative funding sources and limit the adverse impact of this decision on the communities it serves.
"We know for a fact that the Compact does improve relations between government and the voluntary sector both at a national level and, where local Compacts exist, at a local level.
"The Government and the voluntary sector must work to ensure that every agency, public body and publicly funded quango pay attention to this agreement in order to avoid bad funding practices that impact directly upon the most vulnerable in our communities."
The revised Compact Funding Code, published next month, will recommend that all public agencies that distribute funds to the voluntary sector, including colleges, act in accordance with the Compact.
The NCVO's Compact Advocacy Programme will be publishing a series of reports based on surveys of voluntary organisations' experience of how government department are observing the Compact. The first, out in September, will assess the record of the Department for Culture, Media and Sport.