Groups across the region say they rely on cash from the £200,000 Victims Fund, which is distributed annually by the Office of the West Midlands Police and Crime Commissioner (OPCC).
But from April the funding will be taken away from specialist domestic abuse services and redirected to organisations dealing with the problem of hate crime.
The decision comes despite domestic violence surging to record levels during the pandemic, with West Midlands Police dealing with nearly 22,000 cases in 2020-21 – more than a fifth of all crime.
Sikh Women’s Action Network CIC (SWAN), which received £20,000 from the fund last year, said they will have to lay off three case workers, greatly reducing the organisation's ability to support vulnerable victims.
SWAN chair Sukhvinder Kaur said: "We are the only Sikh women led specialist BAME domestic abuse support service provider in the UK and we have worked tirelessly to get the voices of the victims heard and are very disappointed with this announcement.
"Domestic abuse has hugely increased throughout the pandemic, and our own statistics show that we have had a 244 per cent increase in women reaching out to us, yet the Victims Fund will no longer support our domestic abuse services.
"Eighty per cent of the victims that have reached out to SWAN are from a Sikh background and they have said they would never have had the confidence to reach out for help if we did not exist."
Labour’s Deputy PCC, Waheed Saleem, launched this year’s Victims Fund last week.
He urged groups that work with hate crime victims to apply, saying: “Supporting victims of hate crime is a key priority for me.”
West Midlands Police say they were called to 1,250 incidents of domestic abuse over Christmas, a 60 per cent spike on the previous year, while a total of 191 arrests were made over a six day period – 30 per cent of the force’s total arrests.
A spokesman for PCC David Jamieson said “difficult decisions” had been made over funding allocations due to a real terms cut in government grants.
He said the Victims Fund was “not designed to finance organisations on an ongoing basis”, and that funding was not only allocated to domestic abuse services.
“Hate crime has risen significantly in recent years with 2020 seeing an increase of 39 per cent in the West Midlands,” he said, adding that “dedicated services to support victims of hate crime have not had significant funding in the West Midlands in the past”.