Auckland Pride had its origins with the first Hero parade in 1991, when HIV/Aids was claiming more than one death a week.
It stopped in 2001 after a budgetary overspend, and returned as Auckland Pride in 2013 with funding from Ateed and other corporates.
However, a controversial call to ban police marching in uniform from the parade in 2018 led to a major fallout.
Pride sponsors, including NZME, SkyCity, Westpac, BNZ, ANZ and Vodafone withdrew.
The parade organisers also changed the format of the 2019 parade, and Ateed too withdrew its funding because the new format did not meet requirements as determined by Auckland's Major Events strategy.
Instead of a parade last year, the LGBTQ community marched through the streets of Auckland CBD in place of the traditional parade.
Despite not securing Ateed funding, Rainbow Pride Auckland said it would continue to work on plans for Pride Month 2020.
Acting board chair Nate Moss-Penman said a motorised parade was no longer an option because the extensive work happening across the CBD.
"Unfortunately we couldn't secure funding from a key producer of events in Auckland, but we are in ongoing discussions about alternative options which still align with our vision of delivering a world-class celebration in Auckland," Moss-Penman said.
The organisation said it would continue to work with Ateed where it could to make sure Auckland and the rainbow community gets the celebration they deserve.
Celebrations next year could include a multi-faceted walking parade as well as a range of other pride celebrations.
Director of Auckland Pride Max Tweedie described Rainbow Pride Auckland as a "splinter group" and said the other Pride events such as Big Gay Out, Pride Gala and the central city march will be going ahead as planned in 2020.
Tweedie said his organisation had received $25,000 funding from Auckland Council and are in negotiations with Ateed for funding too.
"We have the majority of community support, as well as venues and stakeholders," he said.
"Our (events) are receiving funding and going ahead, irrespective of what Rainbow Pride Auckland claim they're going to do."