A new £55m Endowment Fund chaired by Michael Portillo has been established in order to help arts and heritage organisations work to secure their long-term financial stability.

Groups will be able to apply for grants worth up to £5m to support endowment fundraising, which will decided by the independent panel to match funds sourced from private donors. It is thought that 50 organisations will benefit from the fund, which forms part of the £100m government, Arts Council England (ACE) and Heritage Lottery Fund (HLF) Catalyst project.

Last December, culture secretary Jeremy Hunt earmarked £80m to help increase arts philanthropy - comprising £50m from ACE and £30m from the government. A further £20m has now been committed by the HLF to take the total funding pot to £100m, with £5m of that to go towards smaller cultural and heritage organisations.

Hunt said: "It took the Met in New York more than 100 years to build up their £2bn endowment. I want our endowments century to start today. World class cultural organisations should have world class financial resilience." HLF chief executive Carole Souter added: "Catalyst demonstrates how Lottery, government and private funding can come together to create fresh and innovative ways to sustain cultural organisations of all kinds."