Charities in Brighton have received a letter from the city council warning that they could lose their discretionary relief on business rates next year.
Any charity that runs or owns property in the city is entitled to apply for the relief. It was worth £184,000 to the 147 organisations last year, according to Brighton & Hove City Council.
"Your current award of discretionary rate relief will cease on 31 March 2011," says the letter, sent last month. "The council will be reviewing all awards of rate relief later this year."
Sally Polanski, chief executive of Brighton & Hove Community & Voluntary Sector Forum, said she was worried the council believed this was an easy way to cut the sector's funding.
"There are many worried charities out there," she said. "The loss of this relief will affect vulnerable organisations such as scout associations and community centres."
Colin Chalmers, chief executive of Community Base, a charity that provides housing for 27 other voluntary sector organisations, said the move by the minority Conservative administration could cost his organisation £20,000 a year.
"The council has said this review is not a formality and it can't guarantee our relief," he said. "We feel that there is a very unsupportive attitude towards the sector."
Chalmers said a council decision not to renew a licence for an advertising billboard on the side of his building had already cost his organisation £20,000 a year.
Kevin Curley, chief executive of local umbrella body Navca, said rate relief cuts were "picking on easy targets" and undermining people who had volunteered to help their communities. He said his organisation would consider asking the national Conservative Party to intervene.
A council spokeswoman said: "Individual reviews are a standard feature of discretionary rate relief. We are carrying out a review of the whole system to make sure that the support is going where it is most needed."