Lancashire County Council has cut three voluntary sector grant funds totalling more than £1m in a money-saving move.
The Conservative-controlled local authority has decided to scrap its Central Gateway Grants fund, which provided funding for infrastructure organisations and had a gross budget of £673,000 in 2017/18; its £127,000 Local Initiative Fund, which provided grants of between £1,000 and £5,000 to local groups; and its £252,000 Member Grants scheme, which gave a budget of £3,000 to each elected council member to support local groups.
The decisions will take effect from the start of the new financial year in April.
Decision documents provided to council cabinet members before the decision was made to cut the Central Gateway Grants fund last week warned that "the viability of third sector groups may be affected by the withdrawal".
The papers also say that the removal of the funds might lead to reduced capacity within the voluntary, community and faith sector and result in greater demand for council services.
The council had already decided last month to scrap the Member Grants scheme.
When that decision was made, documents provided to council cabinet members said the fact that other funding streams remained available for third sector organisations would mitigate the effects of closing that scheme.
But at a meeting this month the council decided to scrap two other schemes.
"Other grant funding streams offered by the council have already been proposed to be withdrawn as savings measures," the document relating to the Central Gateway Grants fund says. "Part of the mitigation for those earlier decisions was that this funding stream was to continue."
Geoff Driver, leader of Lancashire County Council, said the council was facing a "significant financial challenge" and therefore had to make tough decisions about how it provided its essential services.
"In an ideal world we wouldn't need to make difficult decisions such as these, because community groups do important work for local people," he said.
"Unlike the previous Labour administration, we are determined to ensure that the county council has a viable financial situation so that we can provide certainty to those people who rely on our services."
The Conservatives took control of Lancashire County Council in May last year.