Barnet Council is the first in London to set up a charity.
Live Unlimited is a charitable trust which will provide children in care with the 'extras' that a parent might pay for, such as money for football coaching, tickets for cultural events, ballet and music lessons, among other things.
The charity aims to give children the opportunity to do things they normally would not have access to activities they might be unattainable otherwise.
It is hoped the charity will help put children in care on an equal footing with those who are not in care.
Due to the shortfall in council funding across the country the creation of Live Unlimited is seen as a novel way to help pay for additional activities that could not be paid for through normal taxation.
The council's chief executive John Hooton told ITV London: "In some instances, children in care or care leavers are not achieving as highly as other kids in the borough.
"We have some fantastic educational outcomes in Barnet, we have fantastic employment opportunities asnd for me it's about making sure all those children in care, all those care leavers have exactly the same quality of outcomes as other kids in Barnet who are doing fantastically well."