Cabinet Office minister Liam Byrne said the majority of the funds would be used to help charities offering help and advice on employment, mental health and family support services in deprived areas in England and Wales.
The money will be predominantly split between two programmes. The first, Real help for communities: Volunteers, Charities and Social Enterprises will look to retrain people as charity volunteers.
The second programme, the Community Resilience Fund will provide £15.5m in funds for small and medium-sized charities.
Even large charities are struggling amid the downturn. At the end of 2008 Oxfam, Help the Aged and Cancer Research UK all said they were concerned about the falling number of donations entering their shops.
Oxfam, which has 730 stores, said people were failing to buy new clothes and becoming increasingly thrifty.
Additionally, many charities traditionally receive money from trusts that invest in the stock market. However the economic situation has also led to a fall in income from these sources.
Help the Aged
Charities to receive Government cash injection
LONDON - The Government is setting up a 拢45m fund to help charities that have been badly hit by the recession.