The Collaborative International Dictionary of English v.0.48:

Funk \Funk\, v. i.
   1. To emit an offensive smell; to stink.
      [1913 Webster]

   2. To be frightened, and shrink back; to flinch; as, to funk
      at the edge of a precipice. [Colloq.] --C. Kingsley.
      [1913 Webster]

   To funk out, to back out in a cowardly fashion. [Colloq.]
      [1913 Webster]

            To funk right out o' political strife. --Lowell
                                                  (Biglow
                                                  Papers).
      Funk