The Glasgow-based coffee roaster will use the funding from the FDF, a Fairtrade partnership between Sainsbury and Comic Relief, to support The Gumutindo Sustainability Project.
The project seeks to help coffee growers in Uganda combat the effects of climate change, which is making it difficult for farmers to predict yields and ultimately maintain their livelihoods.
Matthew Algie said the initiative will help farmers in the Mount Elgon region adopt environmentally sustainable practices and become triple certified.
This means their coffee can be marketed as organic, Fairtrade and certified by the Rainforest Alliance.
The initiative, which will see Matthew Algie work with the Gumutindo Coffee Cooperative in eastern Uganda and Twin, an ethical trading body, will also aim to support climate adaptation and increase capacity. It is ultimately hoped the coffee will be sold at higher prices, with Sainsbury's in-store cafes potentially offering a route to market in the UK.
Matthew Algie already supplies coffee to the retailer's cafes and uses coffee supplied by the Gumutindo cooperative in certain blends.
A further dimension to the project is the emphasis it will place on training female farmers in a bid to boost gender equality in the region, where coffee has been grown for many generations around Mount Elgon.
Ewan Reid, technical director at Matthew Algie, explained the Gorbals-based firm was keen to work with Gumutindo when the latest round of funding became available through the FDF.
He said: "We're sourcing the coffee through Fairtrade contracts so there is an economic benefit to doing that. It is also organic.
"The challenge through much of East Africa in recent times has been around the impact of climate change - that is now starting to have a real impact on yields, predictability of yields per hectare of farm but also, therefore, predictability of livelihoods for farmers.
"What we're doing through the project is to source coffee from Gumutindo for Sainsbury's, and for other customers, but also to do it in a way that is more sustainable that allows us to be sourcing good quality coffee from them in 10 years' time."
Mr Reid said reliable data on climate change in East Africa has only emerged in recent thanks to satellite imaging, in contrast to the UK where there is "meteorological data going back many decades".