Organisers of Sydney's popular Sculpture by the Sea event have warned that it will not take place next month unless a shortfall of $200,000 can be raised in the next two weeks.

One of Australia's best-attended and longest-running annual events, Sculpture by the Sea, attracts over 450,000 visitors to the iconic Bondi to Tamarama cliff walk over 18 days and is the world's largest annual free outdoor sculpture exhibition.

Sculpture by the Sea is run as a not-for-profit event. Its founder, David Handley, said the organisation had found out last week that it had fallen short 7 per cent of the $2.85 million needed.

Despite a successful year of fundraising and the continued success of long-term sponsor relationships, the gap was caused by a lack of federal government funding, Handley said.

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