The Scottish Third Sector tracker Wave 12 (Spring 2026)

The Wave twelve findings are based on responses from 495 third sector organisations. Surveys were conducted online and by telephone, with data collected in April–May 2026. Quotas and weighting were applied to ensure the final dataset represents the Scottish third sector in terms of the organisations’ location, activity, and turnover.  

The dataset contains a mix of quantitative and qualitative responses. Quantitative data were used to generate the figures presented throughout this report. A thematic analysis was conducted on qualitative respons­es to open questions. In each case, the most frequently reported themes have been highlighted. Supporting quotes are provided for these and other noteworthy themes.  

All the data for this report have been taken from the Scottish third sector tracker.   

Explore the interactive dashboard.

The twelfth wave of the Scottish third sector tracker paints a picture of a sector that remains resilient but continues to operate under significant pressure. Financial challenges remain widespread, with difficulty fundraising, rising costs, and funding uncertainty continuing to affect a large majority of organisations. While many organisations remain confident about their future and are continuing to deliver planned services, this is increasingly being achieved through adaptation, the development of new income streams, and, in some cases, the use of financial reserves. 

Recruitment and retention challenges remain a feature of the operating environment, particularly in relation to volunteers. Organisations report fewer people coming forward to volunteer and increasing pressures on their capacity to recruit, support and retain volunteers. Recruitment of paid staff also remains difficult, driven by uncompetitive salaries and skills shortages. 

The findings also highlight the increasingly complex social and political context within which voluntary organisations operate. One-third of respondents reported challenges linked to the changing socio-political environment, including funding pressures, growing demand for services, social division, discrimination and difficulties engaging with public bodies and decision-makers. When asked what support would help, organisations consistently called for more sustainable funding, stronger representation, better relationships with government and practical support. 

New questions on procurement suggest that many organisations perceive procurement systems as difficult to navigate and often inaccessible, particularly for smaller and volunteer-led organisations. At the same time, responses on financial reserves demonstrate the importance of reserves for organisational resilience, continuity of service delivery and strategic investment. 

Overall, the findings suggest that the sector continues to play a critical role in supporting communities across Scotland but is doing so in an environment characterised by increasing demand, financial uncertainty and capacity pressures.

• Ninety-seven percent (97%) of organisations reported facing challenges in Spring 2026, an increase of two percentage points since Autumn 2025. Difficulty fundraising (40%), rising costs and inflation (38%), volunteer shortages (33%), financial or cash flow constraints (32%) and delays or reductions in funding (29%) were the most commonly reported challenges.

• Almost nine in ten organisations reported acting in response to financial pressures, most commonly applying for funding (72%), developing new income streams (42%) and using financial reserves (32%). One in four organisations had cancelled or deferred planned projects or activities. 

• Despite ongoing challenges, 73% of organisations reported delivering all or most of what they had planned. More than half (51%) expect to be operating at a similar level in 12 months’ time and almost one-third (32%) expect to expand their activities or services. 

• Rising costs remain a major constraint on growth. Among organisations not planning to expand, two-thirds (66%) identified rising costs and inflation as a barrier, while 60% cited fundraising difficulties and 48% cited delays or reductions in funding.  

• Recruitment and retention challenges continue across the sector. Thirty-eight percent (38%) of organisations reported moderate to significant challenges recruiting paid staff, while 56% reported moderate to significant challenges recruiting volunteers. The most commonly reported volunteer challenge was fewer people coming forward to volunteer (70%). 

• Twenty-three percent (23%) of organisations reported a decrease in turnover over the previous six months. For over half of these organisations (51%), the decrease was expected to persist for more than a year. 

• Procurement remains a limited source of income generation for many organisations. Only 10% of organisations described the process of applying for contract opportunities as easy or fairly easy, while almost half found it fairly or very difficult. The most common barriers were complex tender documents (58%), difficult-to-navigate processes (54%) and limited internal capacity (46%). 

• Qualitative responses suggest that many organisations view procurement systems as overly complex, resource-intensive and disproportionately geared towards larger organisations with specialist capacity. Smaller, volunteer-led and rural organisations often felt disadvantaged by existing arrangements. 

• More than half of organisations hold less than six months of financial reserves. However, responses suggest that reserves continue to play an important role in helping organisations manage cash flow, maintain services and invest in their future sustainability. 

• One-third (33%) of organisations reported challenges linked to changes in the wider socio-political environment. The most frequently reported issues related to financial pressures, growing service demand, policy and public sector challenges, social division and organisational sustainability. 

• Organisations facing socio-political challenges called for more sustainable and flexible funding, stronger representation, better relationships with government and public bodies, and practical capacity-building support. Rather than new programmes or initiatives, organisations emphasised the need for sustainable funding, stronger relationships and practical support.

Respondents were asked to identify the biggest challenges their organisations had faced since Autumn 2025. Ninety-seven percent (97%) of organisations reported facing challenges – an increase of two percentage points since Autumn 2025. The challenge most frequently ranked as organisations' biggest challenge was difficulty fundraising (17%, up two percentage points on Autumn 25), followed by volunteer shortages (14%, down seven percentage points) and financial or cash flow constraints (14%, up one percentage point). Rising costs and inflation accounted for 12%, down three percentage points.  

When organisations' top three challenges were considered, the most frequently reported were difficulty fundraising (40%), rising costs and inflation (38%), volunteer shortages (33%), financial or cash flow constraints (32%), and delays or reductions in funding (29%). Overall, financial challenges were reported by 80% of organisations, compared with 49% reporting staffing and volunteer challenges and 31% reporting planning and service delivery challenges.

The most frequently selected challenge in Spring 2025 was rising costs and inflation (50%). The introduction of a new response option (delays or reductions in funding) makes direct comparisons difficult, but difficulty fundraising (40%) and volunteer shortages (33%) remain perennial challenges.

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Thirty-eight percent (38%) of respondents reported that their organisation had delivered most, but not all, of what it had planned over the previous six months. Thirty-five percent (35%) reported delivering everything they had planned, while one in five (22%) delivered everything they had planned and had capacity to do more in some areas. These findings are broadly in line with Autumn 2025.

Organisations were also asked what level they expected their organisation to be operating at in 12 months' time. Half of respondents (51%, down one percentage point since Autumn 2025) expected to continue delivering at a similar level. Almost one-third (32%, up six percentage points) expected to expand services or activities, while only 7% (down two percentage points) expected to be operating at reduced capacity.

For those organisations that aren’t planning to expand their programmes or services, we asked what they saw as the main barriers to expansion. Two-thirds (66%) identified rising costs and inflation as the main barrier to expansion; 60% reported difficulties fundraising; 48% reported delays or reductions in funding; 40% uncertainty about the future and 39% volunteer retention or recruitment.  

Organisations reporting rising costs were asked which costs were most prohibitive. The most frequent response was staffing costs (63%), followed by energy (56%), materials and supplies (54%), business support costs (42%), transport (41%), premises rental (35%), and marketing and advertising (33%).

Organisations were asked about key actions taken regarding paid staff over the previous six months. Of those employing paid staff, 44% (up 18 percentage points on Spring 2025) had hired one or more new members of staff; 23% (up 3 percentage points) had cancelled or postponed recruitment plans; 19% had promoted one or more members of staff; and 8% had made one or more staff redundant (down 3 percentage points).

Staff recruitment and retention

Organisations were also asked whether recruitment or retention of paid staff had been a challenge. Overall, organisations found it more difficult to recruit staff than retain staff. Just under four in ten organisations (38%) reported a moderate to significant challenge in recruiting staff in the past six months, down slightly from 41% in Spring 2025. Just over a fifth (21%, down six percentage points on Spring 2025) reported a moderate to significant challenge in retaining staff.

In wave twelve, organisations reporting recruitment and/or retention challenges were asked about the reasons behind these difficulties. For half of organisations (49%), the main issue was fewer applicants for roles; 44% reported that applicants lacked the required skills and/or experience; 43% cited uncompetitive pay or benefits; 36% cited a lack of progression opportunities; and 33% reported staff fatigue or burnout.

Organisations have taken a range of actions to address recruitment and retention challenges, including offering more flexible working arrangements (40%), increasing salaries for existing staff (37%), increasing salaries offered to new staff (20%), increasing the number of vacancy advertisements (23%), and improving other staff benefits (14%). Around one in five organisations (22%) took no action.

Volunteer recruitment and retention

As with paid staff (Figure 4), organisations with volunteers were asked whether they had found volunteer recruitment or retention challenging. Recruitment continued to be more challenging than retention. Over half of organisations (56%, up one percentage point on Spring 2025) reported a moderate to significant challenge recruiting volunteers. Volunteer retention was less problematic, with 37% of organisations reporting a moderate to significant challenge in Spring 2026, broadly in line with Spring 2025.

Organisations reporting recruitment and/or retention challenges were asked about the factors contributing to these difficulties. The most commonly reported challenge was fewer people coming forward to volunteer (70%, down three percentage points on Spring 2025), followed by people having less time to volunteer (61%, up nine percentage points) and insufficient staff or volunteer capacity to support new volunteers (38%). Around one in three organisations also identified volunteer fatigue or burnout (31%, down 10 percentage points) and a lack of a dedicated volunteer coordinator (30%).

We also asked organisations experiencing recruitment and/or retention challenges what actions they had taken to improve volunteer recruitment and retention. Half of organisations (50%) had engaged with volunteers to better understand their views. Thirty-seven percent (37%, up 12 percentage points on Spring 2025) had run a recruitment campaign, while 36% (up nine percentage points) had sought to increase volunteer numbers by reaching out to people who do not typically volunteer for the organisation. One in three organisations (33%, up 11 percentage points) had sought advice from their local Third Sector Interface (TSI), an infrastructure organisation, or another third sector organisation. 

Among the 23% of organisations that had taken no specific action, respondents were asked what had prevented them from doing so. The most commonly reported barriers were a lack of volunteer management support (38%, up three percentage points on Spring 2025), financial resource constraints (34%), uncertainty about future service provision (28%, up four percentage points), and uncertainty about where to start (17%, up two percentage points). A further 22% of respondents identified other factors that had prevented them from taking action.

To understand the overall financial health of organisations, we asked respondents about their turnover and financial reserves.

Turnover

Just over half of organisations (52%) reported that their average monthly turnover had remained about the same over the previous six months, broadly in line with Spring 2025. Around one in five (21%) reported an increase in average monthly turnover, while 23% reported a decrease.

Among organisations reporting a decrease in monthly turnover, just over half (51%) expected this to be a long-term issue lasting more than 12 months, up from one-third in Spring 2025. A further 29% expected the decrease to persist for between three months and one year, while only 12% considered it likely to be a short-term issue lasting less than three months.

Financial challenges

Over the previous six months, more than eight in ten organisations reported taking action in response to financial challenges. The most commonly reported actions included applying for funding (72%, up 14 percentage points on Spring 2025), developing new income streams (42%), and using financial reserves (32%, down 11 percentage points).

Almost one-quarter of organisations (24%, up five percentage points) had cancelled or deferred planned projects or activities, while 15% (up four percentage points) had stopped delivering one or more services or areas of work.

New to wave twelve, organisations were asked about their experience of applying for and securing contracts over the previous two years. Questions covered the procurement routes organisations had used, the bodies they had secured contracts with, their experiences of applying for contract opportunities, factors contributing to any difficulties, and barriers faced by organisations that had not engaged with procurement. Respondents with procurement experience were also invited to provide additional comments about their experiences.

Most organisations had not engaged with procurement through any of the routes listed over the previous two years. The exceptions were organisations that had existing contracts renewed (23%) and those that had secured contracts through less formal approaches (18%) (Table 1).

Table 1. Routes organisations use to pursue contract opportunities

Procurement route	Sought, but not secured	Secured contract
Open competitive tendering	4%	8%
Direct invitation from a public body	5%	10%
Framework agreements or approved supplier lists	5%	7%
Subcontracting through a larger organisation	1%	4%
Partnership or consortium bids	9%	7%
Renewal or continuation of an existing contract	3%	23%
Grant funding that transitioned into a contract	5%	6%
Informal approaches or existing relationships	11%	18%

Organisations that had used one or more procurement routes were asked about their overall experience of applying for contract opportunities. More than one-quarter (27%) found the process fairly difficult, while a further 22% described it as very difficult. Another 27% found the process neither easy nor difficult, and only 10% considered it easy or fairly easy.

Among organisations that had successfully secured contracts, over half (55%) had held contracts with a local authority. Around one-quarter had held contracts with the Scottish Government (24%) or the NHS or another health and social care provider (23%), while one in five (20%) had contracted with another public sector body. A further 20% reported that none of the listed organisations applied, including universities and colleges (8%) and housing associations (5%).

Despite the challenges associated with procurement, organisations generally reported positive working relationships with contracting bodies. Positive relationships ranged from 71% for local authorities and the NHS to 84% for the Scottish Government. Further information on these relationships is available in Questions 18f and 18g of the data tables.

Organisations that found the procurement process fairly or very difficult were asked about the factors contributing to these difficulties. The most commonly reported barriers were complex or time-consuming tender documentation (58%), procurement processes that were difficult to navigate (54%), and insufficient internal capacity or expertise to engage effectively with the process (46%). The full range of responses is presented in Figure 8.

Organisations that had not sought or secured contract opportunities over the previous two years were also asked about the barriers they faced. Almost half (45%) said that procurement did not fit their organisation's usual approach to fundraising. Around one-quarter (26%) reported that there were no suitable contract opportunities available, while 23% identified limited familiarity with procurement processes and 19% said they were unsure where to begin. Eighteen percent cited a lack of internal resources, and 16% highlighted concerns about the administrative burden and the perceived low likelihood of success.

Finally, organisations with experience of procurement were invited to provide additional comments about their experiences. Seventy respondents provided qualitative feedback. 

These responses suggest that many organisations view procurement as a difficult and often inaccessible route to income generation. Respondents frequently described procurement systems as complex, resource-intensive, and disproportionately geared towards larger organisations with specialist administrative capacity. Concerns were also raised about inconsistent practices across public bodies, poor communication, inadequate cost recovery, and contract values that had failed to keep pace with rising costs. For some organisations, particularly smaller, volunteer-led, and rural organisations, procurement was viewed as a route that was effectively closed off or not designed with their circumstances in mind.

There were five key themes: 

• Procurement processes are too complex and resource intensive.
• Small organisations are disadvantaged.
• Inconsistent and poorly communicated systems.
• Financial and contracting models create barriers.
• Procurement is often seen as inaccessible or not suitable. 

Firstly, organisations repeatedly described procurement as bureaucratic, difficult to understand, time-consuming, and requiring expertise that many small organisations do not possess.  

"Without an allocation of time and dedicated members of staff of expertise it is a mine field for smaller charities." 

“How difficult the process is when small organisations don’t have access to large finance and admin teams or are expected to understand these processes when it is out of our remit.” 

“As a community club, we often face barriers such as complex procedures, limited capacity, and lack of clarity around requirements.” 

As the above quotes illustrate, many respondents felt procurement systems favour larger, more established organisations with dedicated bid-writing, finance and compliance capacity. 

"The procurement is geared towards larger organisations with more administrative resources." 

"As a small, volunteer-led organisation, we face challenges in accessing procurement routes due to limited resources, lack of dedicated funding, and complex application processes." 

"TSIs keep telling us about Procurement and how easy and straightforward it is. At meet the buyer events, the buyers tell us we are too small to work with." 

Thirdly, a common theme was frustration with inconsistent practices across public bodies, changing personnel, poor communication, and difficulty identifying opportunities. Some key issues included: inconsistent approaches between local authorities; a lack of transparency and a reliance on personal relationships with individuals between the organisations.  

"It comes down to individual officers within the public sector and our experience changes every time a new person comes into post." 

"As a charity which operates across multiple local authority areas, the inconsistencies of approach, funding, decision making, expectation, monitoring, etc is stark." 

"We find procurement routes difficult to navigate, and while contacts often indicate they will follow up, responses can be inconsistent and communication unclear." 

The fourth most common theme was financial and contracting models create barriers. Many organisations highlighted structural problems in how contracts are funded and managed, particularly around payment terms, cost recovery and contract values. Respondents mentioned contracts not keeping pace with inflation; payment in arrears; core costs often excluded; and organisations having to subsidise contracts.  

"Contract value never increases even though COL is at an all-time high." 

"Authorities need to recognise the additional costs facing us all, especially staffing costs." 

"The exclusion of administrative and management costs from funding bids is a significant barrier for charities." 

"We believe that other bidders are subsidising their bids, and so we have decided that we will too, in future bids." 

"They pay quarterly but an organisation like us, we don't have that amount of reserves available to pay the actual bills in arrears." 

Finally, a notable number of organisations reported not engaging with procurement at all, either because they saw it as inaccessible, unsuitable for their model, or unlikely to generate results. For many respondents there is a perception of procurement being a “closed shop” with limited relevance to small organisations; a low return on investment and geographic barriers.  

"We are very small and procurement isn't something that we really view as an option for us." 

"It's not something we tend to do due to lack of experience in volunteers and the amount of time and work it takes for no return." 

"We are not really geared up to work in a procurement manner and our work is not really that suitable for it." 

"Our location works against us because we are not mainland or easily accessible."

The proportion of organisations holding less than six months' financial reserves increased by four percentage points between Spring 2025 and Spring 2026, to 57%. Despite this, almost half of organisations (49%) considered their reserves to be very important or essential to their short- to medium-term survival, a decrease of seven percentage points compared with Spring 2025. Similarly, the proportion of organisations reporting that their use of reserves was unsustainable fell to 41%, down 13 percentage points over the same period.

To better understand governance and financial management practices across the sector, respondents were asked how their organisation decides when to use its financial reserves. The questions explored why reserves are used, who is involved in decisions about their use, and the principles that guide those decisions. A total of 399 organisations provided qualitative responses.

The responses suggest that most organisations view financial reserves primarily as a means of maintaining financial resilience and organisational continuity, rather than as funds to be drawn on routinely. Decisions about using reserves are typically made by boards or trustees, informed by financial forecasts and risk assessments, and focused on protecting services, staff, and beneficiaries. While many organisations use reserves defensively to manage funding uncertainty and cash flow pressures, others also see them as a tool for strategic investment and long-term sustainability. At the same time, a notable minority reported having little or no financial reserves available, limiting their ability to respond to future financial pressures. 

The key themes included:

• Reserves as a safety net for financial sustainability. 
• Board-led governance and collective decision-making.  
• Decisions are based on financial forecasting and risk assessment. 
• Protecting services, staff and beneficiaries.  
• Strategic investment and organisational development.

The dominant theme was that reserves are primarily viewed as a contingency fund to ensure organisational survival during periods of financial uncertainty. Many organisations described using reserves to manage funding gaps, delayed grants, cashflow problems, or threats to service continuity. 

"We use our reserves only if expected grant money is due to come in but has been delayed." 

"We would use reserves in two scenarios: paying liabilities for winding up the organisation, or to cover core costs during funding insecurity." 

"Our organisation considers drawing on financial reserves in circumstances where there is a gap in cash flow, delayed funding, or an unexpected shortfall that could affect our ability to deliver services or meet staff and operational costs." 

"We will use our financial reserves to allow us to keep our doors open... £100k in the bank is no good to anyone if the services aren't running." 

Theme two was board-led governance and collective decision-making. Respondents spoke of decisions about reserves as being the responsibility of trustees, boards, committees, or finance sub-groups. Very few organisations relied on a single individual.

"The board of trustees would make the ultimate decision which would be in board meeting minutes." 

"After review of reserve levels and forecasts, all financial decisions must be examined by a financial sub group before being presented to the Board of Trustees for approval." 

"The Board of Trustees holds ultimate responsibility for ensuring reserves are used appropriately and in line with charitable objectives." 

Many organisations described a highly structured approach to reserve use, involving cashflow forecasts, reserve policies, risk registers, budgets, and scenario planning.

"Risk register, financial forecasts, priorities, reserve levels, future funding. We have a policy on using reserves." 

"Reserve levels, organisation priorities, cash flow projections, and risks would be considered. Risk/benefit analysis, etc." 

"Financial forecasts are considered to ascertain if the loss can be recouped through ongoing fundraising activities. Risk considerations are at the forefront when deciding to use reserves." 

A strong theme was that reserves exist to protect people. Many organisations described using reserves to safeguard services, maintain staffing, honour commitments, and minimise disruption for beneficiaries.  

"The decision to access reserves is taken by the manager, approved by trustees, but with a deliberate focus on beneficiaries." 

"The organisation prioritises maintaining consistent support for members and carers, and reserves are used where necessary to avoid interruptions to this." 

"Over the past year we have used our reserves to pay salaries to staff whose project funding had stopped." 

Finally, although reserves were usually viewed as a safety net, many organisations also described using them proactively to invest in growth, infrastructure, new projects, or future sustainability. Respondents mentioned things like capital or building projects; match funding; and new ventures. 

"To fund new projects with the intention of these bringing in more income." 

"To unlock larger funding from lottery fund - under match funding - we put in £100k and got over £1m back to the redevelopment project." 

"After a few years of budget surpluses, the board have agreed to run deficit budgets for the next couple of years to absorb wage inflation, to invest in people and development and to fund our continued growth." 

"When we were facing financial difficulties post pandemic we used our reserves to invest in the organisation."

New to wave twelve, organisations were asked about their use of and understanding of artificial intelligence (AI). Almost half of organisations (45%) reported using some form of AI, although only 17% had an AI policy in place.

Organisations using AI were asked how they were applying it in their work. The most common use was writing or editing content for newsletters, emails, and social media (58%). Around half (51%) used AI to summarise lengthy documents such as reports and policies, while 44% used AI-powered design tools to create graphics or posters. The same proportion (44%) reported using AI for administrative tasks, such as drafting meeting minutes. A further 43% used AI to help prepare funding applications or grant proposals, and around one-third used it to create accessible versions of content or generate ideas for workshops, activities, and fundraising campaigns.

Organisations were also asked about their understanding of the risks associated with using AI. Over half (56%) reported having a medium level of understanding, while 22% reported a high level of understanding and 17% a low level of understanding.

Building on our recent pulse research, organisations were asked whether they had experienced challenges linked to changes in the wider socio-political environment over the previous year, including policy changes, public attitudes, polarisation, and community tensions. One-third of organisations (33%) reported experiencing such challenges.

Respondents were then invited to answer two open-ended questions: the first explored the nature of these challenges, while the second asked what support would help organisations respond to them. A total of 166 organisations responded to the first question and 130 to the second. 

Responses suggest that voluntary organisations are operating in an increasingly challenging environment characterised by financial pressures, growing demand for services, policy uncertainty, social division, and workforce challenges. Financial pressures were the most frequently reported issue, with many organisations describing how rising costs and constrained funding were undermining their ability to meet increasing levels of demand. Respondents also highlighted frustrations with policy implementation and relationships with public bodies, alongside growing concerns about social tensions, discrimination, and declining trust within communities. These pressures were compounded by ongoing difficulties recruiting and retaining volunteers and maintaining organisational capacity. 

The five key themes to emerge from analysis of the first question included:

• Financial pressures and funding challenges. 
• Growing demand and pressure on services. 
• Challenges in the policy and public sector landscape.  
• Social division, discrimination and community tensions. 
• Workforce, volunteer and organisational sustainability.

Financial pressures and funding challenges was the strongest theme across responses, with organisations highlighting funding cuts, inflation, rising employment costs, shrinking grant opportunities, and increasing competition for limited resources. 

"Our primary income is a grant from Scot Gov. This has been a cash-flat grant from its inception in 2021. Due to cost of living and other inflationary increases, that fund is now only worth around 78% of what it was in real-term value." 

"An uncertain pricing environment, utility costs, lack of grant income due to vastly increased competition, and a local authority who prioritise their own resource needs over the third sector." 

"There is less funding for all social care projects but more pressure to deliver." 

"Funding has been more geared towards hubs and larger organisations as opposed to grassroots organisations." 

Respondents also described rising demand, increasing complexity of need, and pressure to fill gaps left by public services.  

"Increase in demand for service particularly in relation to neurodiversity, inequality and social policy gaps e.g. in housing, healthcare." 

"Local policy shift re: changes to social care eligibility criteria has led to unsustainable demand." 

"We have received no state or public funding and we are now filling the gaps of decreasing or closed public services. Also, our service demand has gone up due to the social and economic downturn." 

"The political and economic circumstances of the country directly affects us through either increased demand on the foodbank and decreased donations to us." 

The above touches on the third most frequently mentioned theme; challenges related to policy and/or the changing public sector landscape. Organisations expressed frustration with policy implementation, bureaucracy, public sector relationships, and political uncertainty. 

"The implementation gap between policy and practice is becoming increasingly challenging when we see National legislation poorly implemented locally or, in some cases, legislation and policy ignored completely without consequence." 

"Politicians support charities that enhance their profile; they are blind to many smaller third sector requirements and won't even engage." 

"Over the past 12 months, our organisation has faced growing challenges stemming from an increasingly complex and shifting social and political environment. Rising bureaucracy across funding and procurement processes has placed a significant administrative burden on our small team, diverting time and energy away from direct service delivery." 

Fourthly, respondents speak of growing social division, discrimination and community tensions, with organisations reporting increasing polarisation, racism, anti-migrant sentiment, and a decline in trust and social cohesion. 

"Society is getting more divided that creates extra challenges for community groups." 

"Many of the people we work with are experiencing a higher level of racism and discrimination especially in the LGBT & New Scot communities." 

"The significant harshening of both public policy and public attitudes on immigration is a challenge for our organisation.” 

"There is a general feeling of uncertainty in the community, growing distrust and frustration with public bodies, also the whole issue of misinformation and very reductionist, binary points of view” 

Finally, respondents highlighted challenges recruiting and retaining volunteers and staff, as well as sustaining organisations in a difficult operating environment. 

"Adults appear to be less enthusiastic about volunteering. A combination of lack of time, perceived risk and other priorities." 

"Cost of living and care crisis has hit us hard with volunteers not able to give the time to us as they are needed for caring for others at home.” 

"Support organisations becoming fragile and spending more time re-inventing themselves instead of supporting and/or withdrawing face to face support/development services."

Respondents were also asked what support would help organisations address these challenges. The responses suggest that organisations experiencing rising demand, financial pressures, and wider socio-political challenges are not primarily calling for new programmes or initiatives. Instead, they emphasised the need for sustainable and flexible funding, stronger representation, more meaningful engagement with decision-makers, and practical support that enables them to continue delivering services within their communities.

A cross-cutting theme emerging from the responses was the need for greater recognition of the distinctive role that small and rural organisations play in delivering locally tailored, community-based solutions, often in particularly challenging circumstances.

The four key themes to emerge from the analysis of this question were:

• Sustainable and flexible funding. 
• Stronger voice, representation and influence. 
• Better relationships with government, funders and public bodies. 
• Practical capacity-building support.

Sustainable and flexible funding is overwhelmingly the dominant theme. Organisations consistently call for more funding, but particularly longer-term (multi-year), unrestricted, core funding rather than short-term project funding. Respondents also want funding certainty and a fairer distribution of funds.   

"Consistent (multi-year) funding streams that are reliable and not just every 12 months." 

"Access to core funding, encouraging funders who give grants to make them unrestricted grants rather than always having to invest in new projects." 

"What would be most helpful is not additional support programmes for organisations like ours, but a shift in how funding systems operate... multi-year, flexible funding that recognises relational delivery, funds core capacity, and values continuity over short-term outputs."

The second theme predominantly relates to small and grassroots organisations not feeling heard by government, public bodies or funders. Respondents mention wanting better access to decisions makers; collaborative action; and for rural voices to be included in the discourse. 

"Collaboration between organisations with similar priorities and values to enable one powerful voice to speak out." 

"The opportunity as a very small organisation to be heard, we are in the North of Scotland and decision making is done in the central belt." 

"We would welcome clearer, more accessible routes to decision-makers who have a real understanding of frontline, community-based services." 

Relatedly, respondents want better relationships with government, public bodies and funders. In addition to wanting a stronger voice, organisations need more meaningful partnership, engagement and recognition from statutory bodies. Respondents want to see genuine co-production; improved communication; better consultation; accountability of public bodies; and recognition of the sector’s contributions.  

"I think probably a bit of interaction with the local authority and involvement in the consultation process." 

"The public sector needs to understand that it can't survive without the third sector and look at how they can invest to enable productive, collaborative partnership work." 

"A local authority and health board long term partnership that delivered and had impact and had localness at its heart." 

"Greater accountability from statutory bodies and commissioners, alongside genuine opportunities to showcase the real impact and value of our work." 

Finally, many organisations want practical support to help them navigate funding, governance, communications, procurement and organisational development. This included: help with funding applications; procurement support; fundraising support; and training and learning opportunities. 

"Procurement support for low capacity organisations." 

"Help with funding applications, from people who are prepared to come and visit the charity to understand its needs." 

"Administrative support, sourcing funding assistance in completing funding applications and just general support and guidance for the third sector, because we are very inexperienced as a charity."

The findings from wave twelve suggest that Scotland's voluntary sector continues to demonstrate resilience and adaptability in the face of persistent financial and operational challenges. Organisations are continuing to deliver services, support communities and respond to emerging needs despite a backdrop of funding uncertainty, rising costs, recruitment difficulties and increasing demand. 

However, the findings also point to growing pressures that may challenge the sector's long-term sustainability. Financial concerns remain the dominant issue across the sector, with organisations reporting difficulties fundraising, increasing costs and ongoing uncertainty around future funding. Many organisations are responding by developing new income streams, drawing on reserves and adapting services, but there is evidence that some are also postponing projects, reducing activity and operating with increasingly limited resilience. 

Organisations describe operating within a more complex socio-political environment characterised by greater demand for support, increasing social division and ongoing frustrations with policy implementation and engagement with public bodies. Many respondents feel they are being asked to do more with fewer resources while simultaneously filling gaps left by shrinking public services. 

The findings on procurement and reserves further reinforce the importance of organisational capacity and financial resilience. While reserves continue to provide an important buffer against uncertainty, many organisations have limited reserves available. Similarly, procurement opportunities remain difficult to access for many smaller organisations, raising questions about the extent to which existing systems enable the full range of Scotland's voluntary sector to participate. 

Taken together, the findings suggest a sector that remains committed, innovative and responsive, but which continues to face significant structural challenges. As organisations look ahead to the next 12 months, sustainable funding, stronger partnerships, improved access to opportunities and support for organisational capacity are likely to remain critical factors in maintaining the sector's ability to deliver for Scotland’s communities.

Please come back in August for our regional snapshots.

In the meantime, you can use our interactive dashboard to filter the information on Wave 12 by region, staff, number of volunteers, turnover, and main activity.