Unlock Democracy and Sheffield for Democracy are behind the campaign, which is called Turning the Tide.
They want to see powers that were stripped away over the last 40 years given back to local communities.
Tom Brake, director of Unlock Democracy, said: “The research we commissioned which has prompted the campaign highlights many areas where councils do not have full or any responsibility for services, meaning they cannot respond to local needs.
“Housing, schools and transport are very good examples. Most councils have very high demand for affordable housing but limited powers to do anything about it. Some councils are building a small number of affordable homes, some are building none.
“Councils have to ensure there are enough school places locally for children but they are not in control of schools, making this task much more difficult.
“With the exception of London, many local councils do not have the powers to determine which bus routes must be covered or the frequency of services.
“Local councils are flexible and act quickly and decisively. They are closer to communities than Whitehall and should be allowed a greater say in what happens locally.”
Deputy Council Leader Julie Grocutt is hosting the launch of the campaign online on Wednesday, July 21 at 4.30pm. Anyone interested can join by registering here