Quaker Social Action had previously refused to accept grants from the Big Lottery Fund because it "promotes the illusion of wealth as the ultimate fulfilment". But trustees have changed the policy so they can apply for money to save projects threatened with closure.
"Quaker Social Action has always prized all three words in our name, and we continue to do so," said Judith Moran, director of the charity, which has tackled deprivation in London's east end since 1867.
"The issue with the lottery arises where being Quaker limits our social action," said Moran. "It raises the uncomfortable choice between jettisoning principles in favour of engaging more effectively with our service users or limiting our work to protect our principles.
"In this case, our trustees felt we were bound to make a theoretical choice in favour of our work."
Gambling goes directly against the denomination's statement of beliefs, Quaker Faith and Practice, which says Quakers should "resist the desire to acquire possessions or income through unethical investment, speculation or games of chance".
Trustees at the charity consulted widely before making their decision. The move paves the way for the organisation to apply for a grant from the BLF's Family Learning Fund to support a project to promote financial literacy in low-income families, called Made of Money?
Neil Johnson, chair of trustees at Quaker Social Action, said: "We felt it was time to widen our options and remove our objection."