The Scottish Council for Voluntary Organisations is the membership organisation for Scotland's charities, voluntary organisations and social enterprises. Charity registered in Scotland SC003558. Registered office Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8EG.
Distributing & allocating funding
Through our experience, we know that financial stability is important – if not more important - as the levels of investment. Yet short-term annual funding cycles too often undermine this. They limit organisations’ ability to plan, increase administrative burden, and divert skilled staff away from frontline delivery. For the vulnerable people many charities support, whose needs do not align with annual funding timetables, this instability can result in paused services, closed waiting lists, and lost momentum.
Multi‑year, fairer funding has the potential to transform this picture. It gives organisations greater certainty to plan and invest, supporting staff retention, and reducing the significant waste associated with repeated recruitment and training. It enables smarter, longer‑term decisions on overhead and running costs, ensuring more funding reaches frontline services. It also frees leadership time that’s often spent on annual funding bids - to focus on governance, programme delivery, sustainability, quality improvement, innovation, and increased accessibility.
Without improvements to funding practices, the sector risks unnecessary inefficiency, workforce instability, and reduced capacity to meet long-term needs. Scotland’s third sector is the backbone of our communities—often the first to respond to poverty, inequality, mental ill‑health, and social isolation. At Inspiring Scotland, we stand alongside these organisations as a funding partner, combining investment with tailored development support to help them grow, adapt, and deepen their impact.
SCVO’s Fair Funding work closely aligns with our own long‑standing calls for stability, trust, and fairness. Together, we make a clear case that fair multi-year funding is not merely good practice but essential to the future resilience and effectiveness of Scotland’s voluntary sector.
The positive impact Fair Funding could have… cannot be underestimated
From Scottish Government to local authorities, NHS Boards to Health and Social Care Partnerships, from corporate foundations to independent grant-makers, trusts to charities themselves, the voluntary sector’s funding landscape is varied and diverse. As outlined by SCVO data, 42% of the sector’s income comes from the public sector, with 59% of this earned in the form of contracts. Grants make up the other 41% of that public sector income. However, despite this, sizeable swathes of sector funding comes from grant-making organisations who are themselves part of the voluntary sector.
As a result, such organisations can face the very same issues and barriers caused by unfair and unsustainable funding practices as those faced by any other charity or voluntary organisation. This can include the inability to plan for the long-term, to recruit and retain staff, or to face rising costs without the security and resilience required. And yet, at the same time, it is often these organisations that are already incorporating Fair Funding principles as part of their funding approaches. For example, as the Social Justice and Social Security Committee’s report on Third Sector Funding Principles outlines, such funders are often those leading the way in terms of longer-term funding, sometimes with ten years seen as the “optimum”, and are recognised to be amongst the most likely to address rising inflation through the inclusion of uplifts.
“People can often think that, because you are a grant-maker, you are somehow immune to the same problems as others,” explains a charity that provides funding to local projects and groups. “That couldn’t be further from the truth but we still ensure that the funding we provide is long-term and sustainable.”
“The current model is broken and does not allow organisations to grow and thrive,” says a national charity offering support to organisations seeking funding. “If someone were to buy shares, it would never be expected that they could invest in just one specific product, it would be widely understood that this isn’t how investment works and that it would limit the business’s ability to grow and develop – yet this is effectively what is expected of organisations through restricted funding.”
Fair Funding is far from a radical set of asks. Instead, it is largely a manifesto for basic expectations and processes that make funding more efficient and more impactful for everybody. And we know that is the case because there are already funders out there, many of whom voluntary organisations themselves, incorporating Fair Funding principles in their processes. It is these funders who can clearly see the benefits Fair Funding would have if implemented by the Scottish Government.
“Fair Funding is a great example of what funding should look like,” says the local funding provider. “We like to think that we approach all of our grants with similar consideration and understanding of the sector. But there’s always improvements we could be making – we’re not perfect.”
“The positive impact Fair Funding could have, if implemented by all funders, cannot be underestimated,” agrees the national charity. “Both in terms of strengthening organisations themselves and in increasing the impact they are able to have on society.”
William Grant Foundation
The William Grant Foundation is a funder of good causes, connected to one of Scotland’s leading family-owned businesses – William Grant & Sons. The organisation has a vision of a future where everyone has the opportunity to thrive and, with this in mind, it provides grants across a number of areas, such as health and social causes, youth opportunities, natural and built environment, and Scottish culture and heritage, as well as strategic grants that reflect cross-cutting themes and promote a thriving voluntary sector in Scotland.
As a values-driven grant maker, the William Grant Foundation recognises that its approaches and processes can always be improved, while also acknowledging the specific barriers that exist. For example, as the Foundation’s annual funding is based on variable profits from William Grant & Sons, there is recognition that this reduces the ability to make a large number of multi-year commitments. However, the Foundation does indeed provide multi-year funding of up to three years where possible within an agreed limit. The Foundation is also committed to being an Open and Trusting Grant-maker as part of a campaign run by IVAR.
The William Grant Foundation is vocal about the value of flexible funding. From its various strands of work, the Foundation has come to understand that flexibility helps organisations be responsive to what people need, reduces pressure and creates space to think, strengthens relationships and builds trust, supports stability, enables thoughtful risk-taking and learning, and reduces administrative burden. With this in mind, the William Grant Foundation recognises that projects “are only as good as the organisation delivering them” and that “the next project will only be as good as the capacity and sustainability of the organisation”.
The Foundation sees itself as a “supporter of organisations, rather than projects” and there is a commitment to strengthen organisations and offer as much flexibility as possible regarding how funded partners can apply the funds they receive.
Communication and relationships are also a cornerstone of the William Grant Foundation approach. With a focus on building trusting human connections, the Foundation aims to have a constant dialogue with those it funds, ensuring communication is clear and mutually beneficial. Although decision-making doesn’t follow set turnaround times, timescales are always communicated clearly to voluntary organisations and feedback is sought from grant holders via tailored surveys at key points in the funding relationship, feedback that is subsequently reflected upon and, where necessary, actioned.
This acknowledgement of prioritising communication and relationships over complex processes and systems is best identified in the William Grant Foundation’s approach to reporting, described by the organisation as “light touch”. In place of extensive reporting requirements, the Foundation often holds conversations with its grant holders on an annual basis and, although these still require preparation on the part of the grant holder itself, promote a far more open, human interaction between grant holder and grant maker.