Voluntary organisations received £48m from Section 64 grants in 2002-03. Under the Compact, the Department has a duty to confirm payments by 15 January each year, but it has consistently moved that target to within weeks of the new financial year, often panicking charities into putting staff on notice of redundancy.
The alterations herald the first major changes to the system since Section 64 was launched in 1968.
Charity fundraisers previously had from July until mid-September to submit 16-page applications. Now they will have six weeks until 14 May to submit an initial three-page form. The department has promised to inform applicants within four weeks if their projects won't progress, and within six weeks if they will.
The department will also send out more detailed rejection letters. Only those that progress to the second stage will now have to complete the 13 extra pages - by a deadline of 13 August.
Jonathan Coe, chief executive of Popan, which was six weeks from closure before its Section 64 core funding was awarded two months late in March, welcomed the changes. "Reducing the first layer of bureaucracy will provide a much clearer system and help to weed out early applications that don't meet its priorities."
Stephen Bubb, head of chief executives' body Acevo, said it was timely.
"The department is beginning to understand that if it treats charities as equal partners, they can plan properly. At the moment it's more patronage than partnership."