The Big Lottery Fund has admitted that no grant programmes except the Young People's Fund have yet been put in place to take over from the Community Fund.
The funding pause could last for several months, jeopardising the future of many organisations that have become dependent on the Community Fund.
Other programmes will be announced, but no dates have been given so far.
Small to medium-sized organisations will be hardest hit by the pause, which could damage the already fragile relationship between the Big Lottery Fund and the sector, whose opinions have often been ignored.
"I don't think anyone trusts the Big Lottery Fund any more," said Stephen Bubb, chief executive of chief executives' body Acevo. "We knew there would be a transitional period, but we didn't know it would be so crass as to announce the closure of the Community Fund before starting a new one.
"Our organisations don't know if they will fit into the new funding programmes, so they will think this is their last chance to apply to the Community Fund. This will increase the workload, and applications will take longer to process."
Charities were being given "as much notice as possible" of the changes, said Sir Clive Booth, chair of the Big Lottery Fund. He advised charities to consider not applying for the last round of Community Fund grants as the anticipated flood of applications would reduce their chances of success.
But Directory of Social Change lottery watcher Luke FitzHerbert said applicants would be wise to apply because it is not clear when they will get another chance. "Even if unsuccessful, they could re-apply when the new programme is announced," he said.
FitzHerbert said the new process, in which applicants will complete an outline application to see how far they meet the Big Lottery Fund's pre-determined "outcomes", would cut time wasted on those applications unlikely to succeed. But on the other hand, charities whose needs do not meet the chosen outcomes will, in practice, become ineligible for lottery funding, he said.
- See News, p7.
Deadline for last Community Fund applications is 31 May
Sir Clive Booth, Big Lottery Fund chair, says charities will have less chance of success than usual because of large volume of applications
Young People's Fund is only Big Lottery Fund grants stream open beyond 31 May Stephen Bubb, Acevo chief, calls transition process 'crass'.