The Association of London Government is gearing up to release grants worth more than £8 million to London-based voluntary organisations on 15 July.
It will be the first round of funding distributed since it revamped its grants process earlier this year, with the aim of giving a wider range of organisations access to funding.
However, spokesman Stewart Henderson said the process had demonstrated that demand far outstrips the available means.
"The amount of applications we received totals up to around £47 million," he said. "When we announced this new grants programme, we expected to receive a healthy response, but were overwhelmed by the scale and breadth of the applications made to us."
The revamp is designed to allow more flexible funding of London-based voluntary groups. Organisations can now apply for schemes lasting one to four years instead of the previous 12-month fixed period.