This paper uses data from the national survey of third-sector organisations in England to show, for the first time, important variations between organisations and localities in government funding of third-sector activity. It shows that organisations serving the personally or socially disadvantaged are most likely to be publicly funded and that deprived neighbourhoods and local authorities have the highest share of publicly funded organisations. Further, at the neighbourhood scale there is evidence for an interaction effect between kind of organisation and area deprivation, such that organisations working in deprived areas with disadvantaged groups are particularly likely to receive some public funding. These results have particular resonance at a time when many third-sector organisations are faced with cuts in their public funding. They also have relevance to theoretical work on the relationship between government and the voluntary sector.