David Cameron's "big society" emphasis on charities and philanthropy to compensate for public sector cuts will exacerbate the north-south divide, according to one of the UK's leading thinktanks.

A report from the Institute for Public Policy Research North suggests the government's hopes that the voluntary, business and philanthropic sectors will help transform society at a time of budget cuts across the public sector are misplaced.

Depending on philanthropic donations to help achieve this goal will backfire because donations are unevenly distributed in favour of London, the IPPR warns. It found that 40 donations of more than £1m were made in London in 2009, compared with six in the north-east of England, eight in the Midlands and nine in Scotland. "Clearly, the gap between London and the rest of the UK is enormous," the IPPR says.

The rise of the modern philanthropist has been exemplified by Dame Vivien Duffield, who has given more than £200m to good causes, notably an £8.3m donation last month to a number of British arts organisations including Tate Britain, the National Theatre and the Royal Shakespeare Company.

The IPPR also claims that relying on the private sector to provide the resources to bring about the "big society" will put areas such as London – where many of the largest businesses have their headquarters – at a huge advantage. The south also benefits because it is home to the largest charities and voluntary organisations, which are better equipped to compete for public sector contracts. Conversely, the north suffers because it is home to more voluntary and community organisations that are reliant on public funding.