Doncaster Pride has been given a £24,500 grant by the National Lottery but will charge visitors £3 entry for this year’s event.
The festival will be held at Doncaster Racecourse this summer, which organisers say has resulted in “significant increases in costs”.
Previously, it was free and held at Doncaster marketplace.
A statement from Doncaster Pride said the Lottery money would be used for “major core costs” such as stage, lighting, sound equipment, security and first aid.
It said the entry fee would be used to “secure funds for next year”. Festival organisers are still trying to find corporate sponsors to reach a £40,000 budget.
Pride spokeswoman Jen Dewsnap said: “We have introduced a small entry fee (£3) for this year but this will allow us to secure funds for next year, so we should always be in a position to plan to what we can afford and as grant funding becomes increasingly difficult to secure we’re now hoping that we are safe for the long term.
“This does not mean we will stop fundraising or looking for local sponsors, indeed now is the time for sponsors to get in on what is going to be one of the largest events in Doncaster this year.
“When you consider the budget this year is in the region of £40k then there is still a lot of money to find elsewhere, so the Lottery funds are just part of a massive commitment to staging this event.”
No acts have been confirmed for the August 21st event yet although some attractions have been announced.
These include an acoustic stage, a civil partnerships supplier exhibition and a fashion show.
Doncaster Pride is now in its fourth year. It hit the national news last year when newly-elected English Democrat mayor Peter Davies tried to ban it.
Mr Davies soon performed a U-turn after he was forced to admit he had not idea how much revenue the event generates for the town.