Brighton Pride is reducing its staff weeks after announcing it faces a potential £50,000 deficit this year.
One of its three full-time staff members is to be made redundant and the others are to be put on four-day weeks, despite a fundraising drive.
Since the deficit was announced five weeks ago, the charity has received £4,723 from donations and events.
It said it has plans in place for its own major fundraising event in December and is planning a street collection.
The organisation is applying for a street licence for a date in October which will enable it to collect money and also raise its profile.
Pride is organised by the lesbian, gay, bi-sexual and trans-sexual (LGBT) communities in Brighton and Hove.
The deficit for the 2009 week-long event has been blamed on appalling weather, higher running costs and the recession.
The annual event costs more than £300,000 to stage.
The charity has started a fund-raising drive and said the 2010 Pride would be a lot smaller if it does not raise £50,000 in the next 14 weeks.
"This is clearly a very difficult time financially for Pride," said chairwoman Yvonne Barker.
"We have already had to make staff cuts which will have a negative impact on our capacity as an organisation to organise and fund Pride next year.
"Unless significant additional fundraising is achieved, further cuts will have to be made."
Pride has also appealed for competitors in the first Brighton marathon, being held in April, to run for the charity.