Grants made by the Co-operative Membership Community Fund are awarded by 48 local committees around the UK according to their knowledge of their particular area's needs.
In 2012, a total of £3.2m was awarded to 2,709 charities and community groups to support projects that addressed a local issue and provided long-term benefit. This was an increase of £529,000 on 2011, and 279 more organisations benefited. Grants from the fund range from £100 to £2,000, averaging £1,100.
Money for the fund comes from the Co-op's seven million members, who donate part or all of their share of its profits every six months.
For January to June this year, £1m is in the fund's pot. But Sarah Robinson, manager of the community fund, says this does not reflect the potential figure for the whole year because the second payout tends to be higher.
"The donations are spent in the area where the member lives," she says. "One of the unique selling points of the fund is that your money goes back to where you live and elected members decide how it is spent."
Between 10 and 15 Co-op members are elected to each local area committee, which meets about twice a month to decide which grants to award, based on established criteria.
"Projects have got to have an impact on the local community and applications need to give an idea of what the benefits will be," Robinson says. Projects should ideally be innovative in their approach, she says.
Examples of recent grants include £944 to the Llansilin Over-60s Club in north Wales, which funded six coach trips in the summer and at Christmas. Teen Flavour, a community project in Oldham that nurtures musical talent and celebrates multiculturalism through music and workshops, was awarded £1,838 to buy computers and software that enables members, service users and volunteers to communicate.
Since the economic downturn and the public sector cuts, Robinson says, the fund has seen a large increase in the number of applications asking for money to cover core costs.
"People are really struggling with running costs such as rent and utilities," she says. "Without heat and lighting, they cannot run at all. There is no point having wonderful community projects if there is nowhere to run them."
The fund receives many applications from community interest companies and social enterprises, which get grants only for special projects and not core costs, she says.
"With such a massive number of people involved, keeping the majority happy is quite a challenge, but it is fantastic to have so many people engaged," Robinson says. "The committees love making these decisions and good things are happening."
Charities and community groups can keep reapplying for grants if they are unsuccessful.