Cornerstone has run a community cafe and charity shop for the last eight years, and has given more than £25,000 away to other charities in the process.
The scheme was originally set up by Methodist and Anglican churches, and is based at Sheriff Hill Methodist Church in Gateshead.
It offers friendship and conversation to locals, some of whom are vulnerable, and spiritual support.
Margaret Bell, from Sheriff Hill Methodist Church, told Premier: "We're very privileged to have been thought about. We're really thrilled that our work has been recognised.
"Some from care homes, some people are just living alone and want some company, because it's just a nice place to come and meet friends. You don't have to be poor to come, you can just come for whatever reason.
"Everyone is welcome and they obviously feel welcome because they all come back.
"We have a Methodist lay worker who comes every week... Any of us are prepared to have a quiet word with anyone, there's always a prayer station which is well used. People often ask for prayer."
Margaret Bell and Jen Batchelor, Cornerstone's volunteer administrator, attended a garden party at Buckingham Palace last month, with Queen Elizabeth II.
The Queen's Award for Voluntary Service, the biggest honour for such activities in the country, was founded in 2002.
The Lord-Lieutenant for Tyne and Wear Mrs Susan Wingfield OBE, who will be awarding Cornerstone their award later this summer, said: "Cornerstone Community Cafe is a brilliant example of how volunteers working together help local people on a day to day basis and also use their surplus resource to benefit other community groups."
Listen to Margaret Bell speaking to Premier's Iain Britton: