Small in size, big in impact: Scotland’s small charities

This post originally appeared as an opinion piece in TFN 22 June 2026.

For more on small charities see our new report on Small Charities in Scotland: size, shape, financial health, and current challenges.

Small charities are an essential part of communities across Scotland.
During Small Charity Week it’s worth pausing not just to celebrate their contribution, but to look at the pressures they face.

First, what do we mean by ‘small’? UK-wide definitions usually talk about charities with incomes under £1 million, but Scottish charities tend to be smaller. So here we’re talking about those charities with annual incomes under £100,000 - organisations typically run by small teams or entirely by volunteers, organisations like village halls, sports clubs, youth clubs, small health services and recreational charities.

And there are a lot of them. Nearly 18,000 Scottish charities fall into this category, accounting for over three-quarters of the entire sector. Yet collectively, they represent just 4% of the sector’s total income and paid workforce.

So small charities are doing a huge proportion of the grassroots work, often supporting the most vulnerable, tackling local issues, and building social cohesion, but they are doing it with just a tiny slice of the resources.

Standing still while costs rise

Over the past six years, the combined income of small charities has remained largely static, sitting at around £340m in both 2019 and 2025. During that same period, costs have risen significantly.

In fact, by 2025, small charities were collectively spending around £437m - roughly £100m more than their income. Smaller charities are more likely than larger ones to end the year in deficit, with over four in 10 ending 2025 in deficit.

While not every small organisation is in crisis, this overall picture raises concerns about financial sustainability. 

Fragile funding models

One of the defining features of small charities is how they are funded. Unlike larger organisations, small charities rely heavily on donations, local fundraising, and small-scale income generation like membership fees or service charges.

These income streams took a major hit during the Covid pandemic and, while they have recovered somewhat, they remain under strain. The cost of living crisis has left many people with less to give, and charities are feeling the impact. Unsurprisingly, 43% of small charities now report difficulty fundraising - significantly higher than larger organisations.

Grants from trusts and foundations remain a lifeline, but we know through our work with funders, fundraisers and SCVO members that competition is fierce.

Meanwhile, only around 30% of small charities receive any public sector funding at all - and when they do, it is usually via small grants rather than longer-term contracts. Accessing public funding continues to be a challenge for many smaller charities.

A workforce under pressure

Small charities depend heavily on volunteers, including more than 100,000 trustees across Scotland. But over half of these organisations report issues around volunteer and trustee shortages (Scottish Third Sector Tracker).

The paid workforce tells a similar story. Between 2019 and 2025, the number of employees in small charities fell by around 3,000. Those who remain are more likely to be on part-time and/or non-permanent contracts than their counterparts in larger organisations.

But staff resilience and job satisfaction are high. Paid staff and volunteers report high levels of job satisfaction, strong organisational cultures, and a sense that their workplaces are open and inclusive.

Delivering, despite the challenges

Perhaps most striking is that, despite all these pressures, small charities continue to deliver. Most are still providing all the services they planned, and the majority remain confident they will still be operating in a year’s time (Scottish Third Sector Tracker).

If we truly value small charities (and the evidence suggests we should!) we need to think carefully about how best to support them. That means ensuring funding is accessible and proportionate, and recognising the vital role of infrastructure support, from funding advice and HR resources to governance guidance and volunteer recruitment.

Organisations like SCVO, Volunteer Scotland and local Third Sector Interfaces already offer essential support, much of it free to the smallest charities. But support services alone cannot offset a system that often disadvantages smaller organisations.

Small Charity Week is a chance to celebrate the dedication and resilience of small charities. It is also a reminder: if you are running a small charity and facing challenges, you are not alone - and support is out there.

Sources of support from SCVO and others

As outlined above, key challenges for smaller charities include difficulty fundraising, rising costs, volunteer and trustee recruitment and wellbeing, and skills shortages.

There are many sources of support for smaller charities including:

• SCVO Membership – free for organisations with under £100k annual income, giving access to things like Funding Scotland Premium, Information Service support, free legal advice, HR resources and discounts on training.
• Funding Scotland
• HR resources and HR Service
• Governance support
• Volunteer Scotland’s volunteering resources
• TSI Scotland Network