The money will be channelled through the Adventure Capital Fund, which provides long-term 'patient capital' investment in businesses with a social purpose.
In June, the Home Office pledged £4m for the second round of investment by the fund. Last week, this was supplemented by £700,000 from the Office of the Deputy Prime Minister and £500,000 from the DTI.
Roger Brocklehurst, chief executive of the Local Investment Fund, which administers the investment stream, described the collaboration of the three central government departments as groundbreaking.
"To have three government departments joined in one programme for investment in community enterprises, and not in a conventional way but in a really innovative manner, is a major breakthrough," he said.
The DTI investment, delivered through the Small Business Service's Phoenix Fund, will be used as seed and working capital for organisations that are not yet ready for the mainstream investment offered by the Adventure Capital Fund.
The Local Investment Fund intends to recoup its investment by taking royalty payments on sales and a proportion of any outstanding surplus. "The aim is to replicate the kind of equity-style investments available in the private sector, for social enterprises," said Brocklehurst.
The £700,000 investment from the Office of the Deputy Prime Minister, which will be administered by the Scarman Trust and the Development Trusts Association, will be used as post-investment support for organisations that have received funding from the Adventure Capital Fund.
"It is for organisations managing a quantum leap forward," said Brocklehurst.
"Not only will it protect the investment, but it will enable groups to upscale, upskill and achieve a higher level of effectiveness."
Minister for Regeneration Jeff Rooker said the investment "will help more community enterprises to expand the business side of their operations and move away from grant dependency".
Organisations can now apply for second round investment from the fund.
It is intended to encourage community-based service delivery and will target black and minority ethnic groups in particular.
The deadline for applications is 5 December.