The Barrow Cadbury Trust is investing £3m in voluntary and community projects to help young adults within, or at risk of becoming involved in, the criminal justice system.
The funding follows new research by the Barrow Cadbury Commission that shows young offenders are more likely to re-offend as a result of being treated like adult criminals.
"The £3m that Barrow Cadbury will be providing to community and voluntary groups is a recognition that young adults between the ages of 18 and 24 are not given sufficient priority or attention by statutory services as they make the transition to adulthood," said Sukhvinder Stubbs, director of the Barrow Cadbury Trust.
"Voluntary organisations are often best placed to build trust with young adult offenders or those at risk of offending."
The commission's research, called Lost in Transition, also reveals that jailing young offenders costs the taxpayer £800m each year.
The Barrow Cadbury Trust intends to roll out its planned funding over a period of three years. Detailed application criteria will be available to voluntary and community projects from next spring.