The Community Foundation Network has raised the first £17m of a £150m match-funding programme to back small community projects.
The CFN announced it has raised £8.7m for the Community First funding programme, which will be matched by an £8.3m contribution from the Office for Civil Society.
The small grants fund is part of a £150m endowment match challenge that runs until March 2015. The yield from investing the money raised through the endowment match challenge will be used to replenish the grant fund in future years.
The endowment match challenge is made up of £100m to be raised by the CFN from philanthropists and individuals, matched by £50m from the Cabinet Office and the Office for Civil Society until 2015.
It will supply £15m in government funding for 2012/13, providing the CFN raises £30m.
The Community Development Foundation, which will administer the fund and disburse the money, has set up panels that include businesses, residents and representatives of local groups to decide on the priorities for funding for their areas and choosing schemes to back.
Lesley Chambers, director of programmes at the CDF, said schemes nominated for funding so far included sports clubs and equipment for local groups, and priorities had included projects for young and old people and community cohesion.
Nick Hurd, the Minister for Civil Society, said: "I am pleased by the success of the first year of the endowment match challenge, with more than £17m of endowment funding raised so far through generous donations by individuals and businesses matched by the government, creating a lasting legacy of support for communities across the UK."