Charities and community groups across a borough have been invited to bid for small grants.
The cash will come from a special £80,000 budget for Hyndburn with £5,000 allocated to each of the 16 wards.
The council's cabinet on Wednesday approved the launch of the Community Chest scheme.
The authority's deputy leader Cllr Peter Britcliffe told the meeting the application process will open on the November 1 and close on the December 15.
He said: "Application forms are available to download from the councils website.
"The announcement of the bids recommended for award will be presented to Cabinet for approval at its meeting on January 24.
"It is expected that all successful grant payments will be made in February 2024.
"Charities and community groups across all wards will be invited to bid for grant funding from the Community Chest to be used in their own areas.
"The intention is that these grants will be awarded to constituted and well-established community organisations and charities across the borough, with each charity and community group being required to hold their own designated bank account.
"The application process will be proportionate to the size of grant and will not be too onerous so as to encourage applications; and each application will need to clearly state the community benefit that will be achieved with the grant funding.
"The grants will be for both revenue and capital purposes but will not be given where funding would create on-costs or future maintenance costs for the council unless those can be accommodated within existing budgets.
"It is proposed that the grant applications will be assessed by a cabinet working group.
"The aim is not to subsidise commercial enterprises bringing goods and services to market.
"Instead the funding will be directed to voluntary and not for profit organisations to support community activities in the borough."
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