The National Lottery Community Fund has begun a consultation exercise with 42 staff over possible redundancies.
The grant-maker said in a statement that it was introducing a new, more efficient, grant-making system that would mean some roles would not be needed.
The at-risk positions are funding assistant roles in England, it is understood.
A spokeswoman for the NLCF said: "We want to make sure more people can access National Lottery funding in order to support their communities to thrive.
"We are introducing a new grant-making system to improve the experience of applicants and grantees, and help us to develop stronger relationships with the organisations we fund.
"Alongside these positive benefits for our applicants and grant-holders, the new system will also make our processes more efficient, reducing the number of administrative tasks our staff are required to undertake.
"Unfortunately, this means some existing roles will no longer be needed in the future. This change will affect the roles of 42 people in England.
"We understand that this will be a challenging time for those affected and we are supporting them at every stage, including looking at alternative roles within the fund where possible and working closely with our recognised unions".
The funder, which has 870 employees, intends to plough savings made through the redundancies back into front-line operations, Third Sector understands.
The process is expected to be completed by 15 November.