The report, published today, is the first to analyse the prospects of the Big Society in the wake of the Comprehensive Spending Review settlement announced last month, according to the think-tank.
It concludes that without "sufficient and sustained support" from Whitehall, local government, community groups and third sector organisations will not be able to plugs the holes left by a retreating state.
"The Big Society shifts responsibility away from democratic government to self-help, mutual aid, philanthropy, local enterprise and big business," said Anna Coote, head of social policy at the NEF and author of the report.
"The cuts mean there is a much heavier responsibility for dealing with more acute poverty, unemployment, distress and social conflict. It is madness to imagine that in these conditions civil society can fill the gaps left by a retreating state."
The report also warned that the £470 million - earmarked in the spending review - that the coalition plans to make available over four years to build voluntary and community sector capacity "will not go very far".
The report says: "The small, locally-based organisations that are supported to provide the backbone of the Big Society are already losing grants. … However keen they may be to rise to the challenge, they will find themselves doubly embattled as a result of economic policies. Not only will they have to cope with more – and more acute – social needs; they will also have to do so with reduced and less secure funding and support."
The NEF proposes six key actions to make the best of the Big Society, including a clear goal of wellbeing for all, a gradual move towards a shorter paid working week, and more equal partnerships between providers and users of services.
Cutting It: The Big Society and the new austerity is available here.