The group was told during a recent meeting with civil servants that the bulk of the grants - roughly £25m a year - would be distributed during the subsequent three years, since the programme would not be in operation until March of next year.
Many of the details are yet to be ironed out, but Urban Forum was told the grants offered are likely to be between £500 and £5,000. No decision has been taken on whether they should be channelled towards particular targets areas or groups.
Urban Forum also learned the grants are likely to be distributed through existing grant-making bodies. The Office of the Third Sector hopes to choose a national partner by the end of September to coordinate a programme of delivery via local mechanisms such as Community Foundations, Community Empowerment Networks or grant-making charities such as the Scarman Trust or Youth Bank.
Urban Forum chief executive Toby Blume said he was pleased that the Government had responded to his organisation's research last year showing that just under 80 per cent of Community Empowerment Networks had lost money since Local Area Agreements were established.
Calling the grants "a welcome step in the right direction", he said: "The focus on small local community groups is welcomed, as our research findings show that they tend to lose out most."
However, he said the amount allocated "barely scratches the surface" of what is needed. "The amount crudely equates to approximately £50,000 per local authority area per year and is far less than the amount previously dedicated to the Single Community Programme," he said.
He also expressed concern that the fund might put off the Department of Communities, which he described as a "big spender", from investing more in the community sector. "One of the dangers in having a dedicated Office of the Third Sector is that all the other Departments assume it is no longer their job to support and engage with the sector," he said.
A Cabinet Office spokesman said: "The fund is just one example of the ways in which the Office of the Third Sector is driving a shared understanding throughout Government of the sector's broad role in society, and how departments can best support that."