The government had announced that small businesses would be eligible for grant funding of £10,000 to help them weather the Covid-19 pandemic.
But only businesses that receive small business rate relief or rural rate relief will be able to apply for the grant.
Charities receive the 80 per cent mandatory business rate relief rather than either of the two eligible schemes, so would not be entitled to the £10,000 grant.
The problems with the scheme were raised in a letter from Richard Robertson, executive councillor for finance and resources at the Labour-controlled Cambridge City Council, to his MP Daniel Zeichner, also from Labour, which claimed that small charities would be excluded.
A spokeswoman for the SCC said: “Charities are struggling as it is. It doesn’t make sense to exclude smaller charities from the scheme.
“Fifty-four per cent of our members have been asked to provide a response to Covid-19. This grant could make the difference between staying open and closing.”
Roberta Fusco, director of policy and engagement at the CFG, said: “Sadly, this is yet another example of charities being forgotten about by the Chancellor.
“All charities and community amateur sports clubs in receipt of charitable rate relief should be allowed to access the grant-funding scheme at the same level offered by the small business grant fund.
“This would provide immediate support to both local and national charities delivering essential services to their communities at the same level as businesses also receiving existing rate relief.
“We really hope this is a design oversight rather than intentional exclusion, and urge the government to amend the regulation as soon as it can, because #EveryDayCounts.”
The Treasury did not respond to a request for comment before publication of this story.