Third sector organisations have returned more than £26m in unspent grants to the Big Lottery Fund over the past six years.
The figures, revealed after a request by a charity beneficiary under the Freedom of Information Act, show that more than 7,000 organisations returned a total of £26.2m between 2004/05 and 2009/10.
The average was £3,600, but one organisation returned £1.8m in 2004/05. Others have returned up to £200,000 each, according to a BLF spokeswoman. Except for 2004/05, when £6.6m was handed back, the amount returned each year varied from £3.2m to £4.4m.
During the same period, the BLF awarded total grants each year of between £294m and £778m. In 2009/10, just over 1 per cent of the total amount awarded has so far been returned.
Kevin Curley, chief executive of local umbrella body Navca, said local charities could have very good reasons not to go ahead with projects that had received BLF funding. "Needs and opportunities change," he said. "It is much better to return the money for another charity to use than to go ahead with an unnecessary project."
Ben Wittenberg, director of policy and research at the Directory of Social Change, said the "instability and insecurity" of project-funded work often made it difficult to complete projects, because money often arrived late and staff sometimes left before the end of their contracts if they found other employment.
He said organisations should ask funders whether they could keep any underspend. "Most funders are at least willing to listen and are happy to avoid any unnecessary administration around the return of funds if they can," he said.
"It's best if you can have that dialogue when you first start forecasting an underspend rather than at the end of the grant period."
The BLF spokeswoman said it normally granted such requests if they were in "the general spirit of the original grant". She said returned funds were allocated to future projects.