Awards of up to pound;20,000 will go towards encouraging children aged five and under to make music in the pound;1m First Steps scheme while pound;5m will go towards expanding work of existing organisations in a programme called Dynamo.
First Steps is open to musicians, nursery schools and playgroups, children's music organisations or others with a strong commitment to music-making and teaching others how to do it.
Dynamo will help national organisations such as Music for Youth and the National Federation of Music Services, and fund regional projects, for example, arts organisations such as the Warren in Hull, or Artswork in Southampton.
Richard Stilgoe, the entertainer and a trustee of the NFYM, said the money would "help to spread the excellence".
He said Britain had the best youth music programmes in Europe, but that some areas andschools in the country had strong musical traditions, but others had not.
An instrument amnesty encouraged people to donate unused instruments for young people to learn how to play, in partnership with BBC Music Live.
More than 5,000 instruments have been distributed to 1,000 organisations - ranging from a magnificent Steinway grand piano to guitars, drums and the more humble kazoo.
The National Foundation for Youth Music was set up in 1999, with the help of the Arts Council of England to promote and develop music opportunities for young people, up to and including 18-year-olds.
Its mission statement reads: "Music-making is as natural as eating or breathing and we want it to be available to every young person. We are committed to facilitating fundamental change to make this a reality."
Details of the awards from NFYM, 40 Brunswick Square, London WC1N 1AU; telephone: 020 7841 0800; fax: 020 7841 0801; e-mail: firstname.lastname@example.org; web site: www.youthmusic.org.uk