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 Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB.
What is Fair Funding?
The voluntary sector needs a funding landscape that is fair, flexible, sustainable, and accessible to ensure that organisations can provide the services and projects that are crucial to communities across Scotland. This can only be achieved by guaranteeing Fair Funding that includes longer-term funding models, ensures processes are accessible and consistent, and provides more unrestricted funding with in-built uplifts.
Fair Funding is central to a sustainable voluntary sector in Scotland. It includes, but is not limited to, longer-term funding of three years or more, flexible unrestricted funding, timely payments, more accessible application processes, sustainable funding which incorporates inflation-based uplifts, and transparent approaches to monitoring and reporting.
In Scotland, the many benefits of multi-year funding are understood and recognised by the Scottish Government and parties across the Scottish Parliament. However, there has been little progress towards implementation, and flexible, sustainable, and accessible approaches to funding are less well understood.
To support Scotland’s vital voluntary sector to adapt to current and future societal and economic challenges, and to address years of poor funding practices, Fair Funding that incorporates the following is urgently needed:
- Longer-term funding of three years or more;
- Flexible, unrestricted core funding, which enables organisations to provide security, plan effectively, and fulfil good governance requirements;
- Sustainable funding that includes inflation-based uplifts and full costs, including core operating costs;
- Funding that accommodates paying staff at least the Real Living Wage and pay uplifts for voluntary sector staff on par with those offered in the public sector;
- Accessible, streamlined, proportionate, and consistent approaches to applications and reporting, timely processing and payments, and partnership between the grant-maker and grant-holder; and
- A comprehensive and proportionate approach to financial transparency around grant funding to support organisations and the public to understand spending decisions.
We have divided our Fair Funding calls into four distinct definitions – multi-year funding, sustainable funding, flexible funding, and accessible funding - and they key lines and asks for each can be found below.
Voluntary organisations need longer-term funding models to provide security, plan effectively, and retain and develop staff. The time and resources that go towards the annual funding cycle, from organisations and funders alike, leads to vital capacity being wasted every year.
We want the Scottish Government to:
- Commit to a longer-term funding model for the voluntary sector across all Scottish Government departments;
- Define multi-year funding for voluntary organisations as a three-year minimum commitment;
- Ensure these practices are adopted by public bodies and third-party organisations for disseminating funding on behalf of the Scottish Government; and
- Measure and report on the number of Scottish Government grants and contracts which are delivered on a multi-year basis and the impact of this on voluntary organisations and the services they provide.
Inflation-based uplifts must be built into funding to avoid the all-too-common occurrence of organisations facing real terms cuts on an annual basis, and to ensure organisations can pay the real Living Wage. Ensuring more opportunities for full cost recovery, enabling organisations to recover more of their overheads, is also vital to ensure funding, and therefore the sector, is sustainable.
We want the Scottish Government to:
- Commit to ensuring that all multi-year funding arrangements have annual inflation-based uplifts inbuilt, at a level as close to inflation as possible;
- Commit to ensuring that all public grant funding and procured contracts have both the real Living Wage and annual uplifts to the real Living Wage built in; and
- Commit to working towards introducing more opportunities for voluntary organisations to recover full costs, including core operating costs, for projects and services.
Funding should, wherever possible, be unrestricted to allow organisations to meet core running costs, providing greater stability and allowing organisations to plan for the longer-term. Greater flexibility from funders, in areas such as project and service design, and the setting of targets is also necessary.
We want the Scottish Government to:
- Commit to ensuring that all funding streams avoid the common default of only providing restricted funds;
- Commit to working with the voluntary sector to ensure that future grant arrangements include meaningful, productive discussions on the make-up of restricted and unrestricted funding;
- Commit to working with the voluntary sector to co-design and develop approaches across Scottish Government departments that allow for flexibility in approach and monitoring; and
- Commit to working with the voluntary sector to ensure that future contracts and grant arrangements include the setting out of mutually agreed expectations aimed at improving relationships between grant-makers and grant-holders, as set out in Principles for Positive Partnerships.
The sector needs standardised, streamlined, consistent approaches to funding and application processes to ensure a level playing field for all organisations. Providing clearer guidance, simplifying the approach to monitoring and reporting, and making timely decisions are crucial to ensuring no voluntary organisation is disadvantaged by the process.
We want the Scottish Government to:
- Commit to undertaking improvements in practice for all Scottish Government departments and funds delivered by others on behalf of the Scottish Government;
- Ensure funding decisions are issued no later than December and funds paid no later than the start of the tax year in April; and
- Work with the voluntary sector to ensure that good practice, both from within the Scottish Government and elsewhere in the funding landscape, is highlighted and shared.