Funding

There are a range of funding opportunities available to third sector organisations in Scotland. These range from small, independent fundraising activities (e.g., buckets in supermarkets, crowdfunding online) through grants programmes and into more formal Procurement exercises carried out by Public Bodies.

Many local organisations or groups operate on very small budgets. They carry out local fundraising and support volunteers to carry out their activities. This might include, for example, local walking groups or sports clubs which do not need to own and operate their own premises or pay staff members. For larger operations, for example to pay for staffing or building costs or more complex activities, then grants programmes or formal procurement might be more suitable.

Whatever the size of your organisation, it is important to understand the rules that govern the types of fundraising you intend to carry out and to remain compliant with any reporting requirements for the funder, OSCR (if you are a charity) and for any partnership agreements that might be in place (e.g., a Memorandum of Understanding with delivery partners). For anything beyond the most basic fundraising you will need to identify suitable funders. This can be complicated but research is key to achieving your aim.

General principles

In general, any kind of funding will require that your organisation demonstrate good governance. This will include:

• being able to demonstrate you can carry out the activities in a timely manner
• demonstrating how the activity will integrate with existing activities or with other local or national activities
• demonstrating your understanding of the risks related to your work, and
• that your work conforms to your charitable purposes

It is important to approach funding carefully by fully understanding the responsibilities the agreements with the funder will place on your organisation – for example, any reporting requirements, financial management and/or policy and practice guidelines. There is a high probability that some of your initial efforts to deliver projects will present challenges – this might include recruitment – so it is important to understand how you will manage these kinds of obstacles and where you can turn for help. More information is available on the wiki page Working Well With Funders.

Regulation

In Scotland, fundraising is self-regulated (see below). However, for charities registered only with OSCR, the Scottish Fundraising Adjudication Panel provides guidance and can support complaints from members of the public about fundraising activities carried out by charities. The Scottish Fundraising Adjudication Panel subscribes to the Code of Practice from the Fundraising Regulator.

In England and Wales, the Fundraising Regulator will investigate complaints about charities registered in England and Wales. It also acts as the ‘lead regulator’ in circumstances where a charity is registered with both the Charity Commission for England and Wales and with OSCR.

The Code of Practice and independent regulation have been developed to mitigate against a negative view of fundraising which has developed over the last decade and which centres around a perception that some charities are misleading in their marketing, employ aggressive fundraising techniques (e.g., ‘chuggers’), lack transparency in the purpose of the fundraising or breach ethical guidelines.

A revised Code of Practice will be implemented from 1 November 2025.

Types of funding

Independent Fundraising

Any group can carry out independent fundraising to support their activities. At its most basic level this would be about your organisation, volunteers or staff appealing directly to the public to raise money for your activities. Other forms of donation might be larger – including bequests and larger donations which may or may not be restricted [#] to certain activities, geographies or themes.

You can find further information in Governance, and Finance.

Grant Funding

A grant is a donation, provided by any organisation or public body, to deliver a specific programme of work which has been described by the beneficiary organisation. This is in contrast to a contract [#], service level agreement or framework which are framed as formal procurement [#] mechanisms and where the activities are described and prescribed by the funding body.

A grant will typically be provided as a restricted fund to carry out the activities you have proposed according to a budget you provided through the application process. The details of restrictions, conditions and options for you as the beneficiary organisation should be detailed in a clear funding agreement. There should be a clear understanding within your organisation – i.e., at board/management committee level and with senior staff about the obligations a given grant will place on your organisation.

You will be required to provide periodic reporting on the delivery of your activities and funders will require periodic financial reporting.

Scotland has a wealth of independent funding bodies, the most well-known include:

• The National Lottery Community Fund
• Foundation Scotland
• Inspiring Scotland

Public bodies, such as Local Authorities and NHS territorial Boards will also run local grants programmes to support areas such as health inequalities. Funders will identify areas of work in which they seek to invite applications. For example, The National Lottery Heritage Fund focusses their activities on the preservation of the heritage of the country and will support work in this area.

Your success in applying to such funds will relate directly to how well your programme of work supports these outcomes. The procedures employed by grants programmes will vary and it will behove you to gain a clear and detailed understanding of these procedures before making an application.

Procurement

In its strictest sense Procurement includes both grant and contracted funding, but for the purpose of this wiki, we are going to focus on the formal processes which surround the specification and purchase of activities, goods and/or services where a public body states its requirements in a formal tender.

At the most basic level, Procurement governs the processes and rules surrounding the purchase of activities, goods and/or services. Procurement can initially seem to be a complex and difficult area. It is carried out according to very specific rules which centralise fairness and seek to avoid fraud. The primary legislation at this time is the Procurement Act (2023) [#] which has now replaced the Procurement Reform (Scotland) Act (2014) [#] and the Public Contract Regulations (2015) [#].

The Scottish Government’s Supplier Journey website outlines five key stages for organisations seeking to bid for public contracts. This includes understanding how public bodies view and assess your organisation, through bidding, decision and award, contract management and lessons learned.

The information provided is intended to make sure that your organisation is making best use of its time in bidding for a tender. Support is also provided by the Supplier Development Programme who provide a range of training and advice sessions throughout the year.

From a governance perspective, it is important to ensure that your organisation is equipped to provide the activities, goods or services within the specification. The delivery of contracts will come with substantial scrutiny and there will be reputational risk in non-delivery. It is well worth approaching your Local TSI to explore whether they offer training or advice on the nuts and bolts of procurement, may be able to provide information about upcoming tenders and may have good relationships with local commissioning teams and procurement personnel from public bodies that can help.

Co-production

The nature of grant-giving and the delivery of public contracts can be alienating to small organisations, people in communities and particularly to those with experience of a multiple marginalisation.

Third Sector Interfaces (TSIs), community groups CLES, Scottish Coproduction Network and some think tanks (e.g., The King’s Fund and New Local) have advocated for a movement toward co-production and co-design, particularly in relation to the kinds of activities which affect daily living – health, community and education.

Co-production aims to mitigate against the power imbalances embedded within the ‘purchaser provider split’ by engaging earlier with those who are affected by funding decisions (including the organisations who deliver support).

If you wish to become involved with local commissioning and procurement processes, you will need to engage with your local public bodies to understand how procurement programmes are being designed. Your local TSI should be able to provide information about this. You can also find out about future contacts through local public bodies’ contracts registers which should be available on their website.

Finding suitable funders

Grant Funding

There are a wealth of funders across Scotland.

Funding Scotland is a free online search tool to identify funding opportunities for your organisation.

Many local Third Sector Interfaces (TSIs) host search engines on their websites to find sources of funding, including local geographical opportunities.

In some areas the local authority, sometimes through the library service, may host funding search engines and databases.

Procurement Portals

Crown Commercial Services provide guidance and support to those seeking to bid on work specified by the UK Government (including Scotland).

Public Contracts Scotland provides guidance and support to those seeking to bid on work specified by the Scottish Government, local or national public bodies including local authorities.

National Services Scotland’s National Procurement and Logistics website provides guidance and support to those seeking to bid on work specified by both national and territorial NHS Boards within Scotland.

Further resources and links

The Chartered Institute of Fundraising is the UK-wide membership body championing the work of fundraisers

The Scottish Fundraising Adjudication Panel offers a code of practice in relation to fundraising which will be helpful in guiding your practice.

The Supplier Journey website provides detailed information about procurement in Scotland

The Supplier Development Programme is a Scottish Government funded programme to support third sector organisations to better engage with formal procurement processes.

NDTI have provided learning about the development of Community-Led Support which includes the use of procurement to improve the availability and accessibility of activities within local communities.

Engage Renfrewshire - Funding Toolkit Managing, Monitoring and Reporting

CVS Falkirk – Are you ready to apply for funding

For further free, well-informed information, find your local Third Sector Interface (TSI) at the directory page here