A local authority has agreed under the Compact to transfer the management of a community centre to the YMCA and to give the charity £200,000 to cover refurbishment costs.
Redditch Borough Council and Redditch YMCA previously ran competing community centres close to each other in the West Midlands.
But they agreed to work together, under the management of Redditch YMCA, to develop both sites.
"Both could have closed," said Alan Fraser, chief executive of Redditch YMCA. "But if we work together, both will remain open and provide a greater range of activities than before.
"It shows that the Compact is not just a piece of paper - it really will lead to significant changes in service delivery."