Local umbrella body Navca has said it will encourage its members to follow Government guidance that could help community fundraising groups claim an estimated £6m in Gift Aid on donations.
The Office of the Third Sector published guidelines in March last year that said small community groups without charitable status could funnel donations through local umbrella bodies such as councils for voluntary service, which could claim Gift Aid on their behalf and pass on the money.
Kevin Curley, chief executive of Navca, told Third Sector he was unsure why the scheme had not taken off.
"This is a perfectly good idea," he said. "It would be an administrative burden for the umbrella groups, but the amount of money it would raise would mean it was worth it.
"The Government needs to remind the sector of the existence of this guidance and confirm that local bodies can fund the costs of the scheme through tax refunds. If it did so, we would publicise it again to our members."
Curley estimated last year that the measure could help thousands of organisations to claim back as much as £6m.
Pene Walsh, a London-based fundraiser involved with a number of local community organisations, said: "I have raised more than £15,000 for some local groups but they haven't been able to claim Gift Aid on this.
"Umbrella groups need to start approaching them and helping them."
An OTS spokesman said: "The Government is working with charities to help them get the full benefit of Gift Aid, providing guidance as part of this work."