Voluntary organisations in London last week staved off swingeing cuts to their grants by local councils in the capital.
A campaign by the sector averted a threatened 33 per cent cut and pegged the pan-London grant budget at last year's level of £28m.
London Councils, formerly the Association of London Government, which represents the 33 London boroughs, also withdrew proposals not to fund children's services and to ditch a £1.6m European Social Fund grant stream for small voluntary organisations.
Tania Pouwhere, co-chair of the Voluntary Sector Forum, which represents more than 400 recipients of London Councils' grant programme, welcomed the announcement but pointed out that it was a tainted victory because the councils' budget had not kept pace with the rate of inflation.
"We're really pleased that they've agreed to maintain a standstill grants budget," she said. "But we would urge them to think about raising the budget year on year in line with inflation. It has been at the same level since 1986."
Conservative council leaders on London Councils had proposed to give back 33 per cent of the grant budget to local boroughs and ring-fence it for local voluntary organisations. But council leaders could not guarantee the money would not be used to reduce council tax.
Elizabeth Balgobin, chief executive of the London Voluntary Service Council, said: "The sector has been united in supporting the Voluntary Sector Forum in this campaign. The campaign has highlighted what just 1 per cent of cuts would mean. It has also underlined the value for money we are getting out of the programme."