The donation has been made to create the 'Butler, Tanner & Dennis Fund', which will provide individual grants of up to £2,000.
Priority has been given to former employees, or their dependents, of the Frome-based printer, which closed in April.
Kevin Sarney, managing director of BT&D, said: "When we began talks with Felix Dennis, there was the view to put something aside for the local community, those that had no choice in the closure.
"We were very sensitive to those that have suffered hardship from the situation."
Sarney added the fund, which is available to those within a 20-mile radius of Frome, is a "significant gesture" designed to "help locals affected by what has happened".
Stephen Gilbert, chief executive of the PCC, said: "This is an extremely generous gesture by Butler, Tanner & Dennis and we will be promoting the fund not only through local organisations, but also through Unite."
Those wishing to apply for grants from the fund should contact the PCC by email info@printerscharitablecorporation.co.uk or telephone 01293 542 820.
Last month, staff who lost their jobs when Butler and Tanner closed were awarded £1,200 each by an employment tribunal in Bristol.
Charitable fund set up for former B&T employees
Butler, Tanner & Dennis (BT&D) has set up a 150,000 fund through the Printers' Charitable Corporation (PCC) to help former employees and others affected by the closure of the old Butler and Tanner earlier this year.
