Guernsey's overseas aid budget could be reduced by 25% in 2021 due to "future uncertainties" regarding coronavirus, the States of Guernsey said.
The proposed £2.3m Overseas Aid and Development Commission 2021 budget is £830,000 less than planned for 2020.
However, in April the £3.1m budget for this year was reduced by £1m to top up the island's general reserve, a process repeated in the 2021 budget.
The reduction in funding for the body must be approved by States deputies.
They will vote on the reduction as part of the overall budget in December.
President of the commission Deputy Chris Blin said it was "unfortunate" the body would not be able to launch its first large grants programme of up to £150,000 over a three year period.
He said the lack of "financial certainty" meant it would be "wrong to make any longer term commitments".
"However, the commission will be looking for its budget to be at least fully restored in future years if at all possible," he added.
The body will still continue to offer its small grants programme and emergency relief awards.
Last year, the commission supported a variety of projects, including a water and sanitation project for displaced Rohingya people from Burma in a refugee camp in Bangladesh and a food programme in South Africa run by island charity Goal 50.