The claim came from North West Glasgow Voluntary Sector Network after Glasgow Community Fund applications were deemed unsuccessful last week.
Hundreds of charities, including a well-known theatre, have been told they are not being recommended for community funding from Glasgow City Council next year, as local authority bosses said a review of the process would take place.
More than 400 organisations applied to the Glasgow Community Fund for the coming year, with 223 of those “competent” bids being ruled unsuccessful, and not recommended for funding for the coming year.
The 436 bids were requesting a total of £136.5million, with the fund limited to a total of just £50m. This led to decisions being taken which left just 165 bids ultimately being successful across the city.
Glasgow City Council said there had been a “comprehensive, robust, open and transparent process”, with officials claiming the quality of bids was “exceptionally high”.
A report added: “This provides a strong indication of the calibre of the third and voluntary sector organisations operating in Glasgow.”
However, some groups have reported they face closure as a result of the decisions.
Last week, Glasgow Food Train warned that hundreds of their service users could go without help if they are allowed to close, as they were deemed unsuccessful.
Despite community and political pressure, the Govanhill-based charity saw support pulled after more than 10 years of council support.
Now, a well-known theatre has joined the chorus of concerns after having their own funding pulled.
Bosses at the charity-run Tron Theatre in the city centre hit out after the venue was stripped of its funding by the council.
Tron Theatre’s artistic director, Andy Arnold, told the Glasgow Times the venue had effectively been “struck off” after more than 30 years of financial support.
Mr Arnold said no reasoning had been provided to the charity, who had applied for £200,000 having received grants ranging from £130,000 to £300,000 in recent years.
He told the newspaper: “We have to apply to the Glasgow Community Fund which, clearly from the application process, has no interest in cultural activity.
“Every question was focused on community involvement.
“There was nothing at all about culture. We had to almost pretend that we were a community centre.
"We know a decision has been made, but we’ve been given no reason as to why the Tron, which invests so much in Glasgow – 10 times what it’s received from the council – is now struck off.
"Our building is actually owned by the council – we spend hundreds of pounds every year looking after it for them.
“The loss of that funding will definitely impact what we can do and how many staff we can employ. There’s no question about it.”
According to Glasgow Live, charity representatives in Glasgow have now warned that those most vulnerable in Glasgow are not being served during “the worst austerity crisis for 30 years”.
Martina Johnston-Grey, of the North West Glasgow Voluntary Sector Network, told a council meeting on Thursday: “I don’t care where the funding comes from. It needs to come from somewhere and we all have to work together to make sure that happens.
“We’ve got people in the room today who probably haven’t slept because they are so worried. They’re not worried about their job, they are not worrying about themselves, they are thinking about how we are going to serve people.
“I am concerned about citizens who are in the worst austerity crisis for 30 years and we are not serving them enough, we just aren’t.”
A council official at the meeting is reported to have said the process had “not been perfect”, adding: “We will review it and take on board the comments.
“It doesn’t sit well for us, we know that there will always be people who lose out. It just comes down to decisions having to be made.
“We will never have enough money in Glasgow's Communities Fund to satisfy the level of demand.”
Following an amendment raised by Green councillor Anthony Carroll noting “concerns which have been raised” regarding “the extent of meaningful community engagement and the time allowed for meaningful scrutiny of the proposals”, the council confirmed all organisations would receive feedback by the end of February.
Officials also committed to providing support and advising unsuccessful applicants “in accessing other sources of funding”.
Responding to comments from the Tron Theatre, a Glasgow City Council spokeswoman told the Glasgow Times: “The fund was over-subscribed by 64% and we know that organisations will be disappointed, but there is not the money to fund everyone.
“Organisations should not see this as core funding or have any guarantee it will be renewed each time.”