The Masonic Charitable Foundation now offers small charities multi-year funding for running costs and other core funding expenses.
The new grants are a maximum of £5,000 per year over three years and are available to charities with an income of £500,000 a year or less.
The first round of grants for 22 small charities has already been announced.
The grants are an extension of MCF’s current programme for non-ring-fenced grants for small charities, which are one-offs of £5,000 toward general charitable purposes.
David Innes, chief executive of the Masonic Charitable Foundation, said: “There are many small charities that struggle with basic running costs.
“Project-based funding is fine, but if they can’t pay the electricity bill or put petrol in the car, delivering services to clients can be difficult if not impossible.
“Many charities cease their vital activities because this kind of funding is not available.
“This is why the MCF’s new core funding initiative, on behalf of the freemasons of England and Wales, is so important.”
Small charities struggle with lack of core funding
The MCF said it recognised that smaller charities face difficulties because of a lack of core funding and reacted with this policy shift on grant-making.
Often charitable foundations, including the MCF, have chosen to concentrate on project-based funding where results are more visible.
The MCF plans to monitor and evaluate its grants and share learning within the sector about the effectiveness of the new multi-year grants.
The funder gave grants of more than £5.6m in 2017 to 770 national, regional and local charities across England and Wales.