Foundations' report, which examined the DFG's development since its introduction in the early 1990s, argued that under current systems, older and disabled people had low awareness of the fragmented support available to them.
As a result, the 40,000 of those eligible for DFGs - which pay for home adaptations including ramps, level access showers and stairlfts - were often left to seek out their solutions to allow them to live independently.
At the moment, DFGs are awarded by local authorities to a variety of different, independently-operating organisations nominally overseen by the Better Care Fund.
But citing areas such as Knowsley, Cornwall and Ealing where services had been joined-up effectively, Foundations' report argues that bringing all support - including that offered by occupational therapists and home improvement agencies - into one grant will lead to more efficient service delivery.
They go on to argue that allocating all support through the DFG will prioritise preventative approaches and take pressure off hospitals and social care services currently overstretched through the demands associated with the UK's ageing population.
It says: "The access of the home is finally being recognised as important for successful hospital discharge, to enable care to take place at home, and to allow people to live independent lives.
"...it is possible to join up the previous disjointed pathways and link the DFG to other related health and care services in a way that will make much more sense to customers.
"Rather than standing alone as a single solution it can be part of a more holistic range of interventions to help older and disabled people remain independent at home."