A charity funding body says there are so many other cash sources available to voluntary groups in and around Bradford that it can't give its money away.
West Yorkshire's Local Network Fund (LNF) had hoped to hand out £450,000 more in Government cash than it has done, and now stands to lose the lot.
The LNF has been told it has just 12 weeks to give away the cash or it must hand the money back to the Department for Education and Skills - and see its budget slashed next year.
The fund covers all of West Yorkshire and is administered by the Community Foundation for Calderdale (CFC). It has an annual budget of £1.5 million and has given out £987,000 since April.
Natalie Jowett, CFC's marketing and development manager, said: "There is an underspend of £450,000. We need to give that out before the end of March otherwise the money will go back and we won't get as much money for the next period.
"There are so many different funding bodies with money available that we are in competition with each other - maybe that's the reason we have underspent."
But she called on organisations that need cash to take advantage of the situation by submitting more than one claim.
"There is nothing to say that organisations could not get money from more than one body," she said.
Voluntary and community group projects ranging from sporting activities to after-school and breakfast clubs can qualify for LNF grant aid up to the sum of £7,000. They must work with young people under the age of 19 but any groups which work with young people with learning disabilities can also apply for grants for projects working with young people up to 25 years old.
To check if a project is eligible, for help completing the application form or for more information, contact the Charities Information Bureau on (01924) 239063.
Heather Stephenson, the bureau's deputy director, said it was a 'possibility' that competition between funding streams had led to an underspend at LNF.
But she said it was not a common problem and urged Bradford groups to make the most of the cash by applying for some.
"Don't look at the form and be put off," she urged. "Give us a call, we are here to offer support to groups interested."
Anyone who thinks the Local Network Fund could help their project should telephone 0845 113 0161 for an application pack.
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