The third sector has increasingly complex funding models and multiple income streams. Public sector support continues to fall and self-generated income is increasing in importance. Before you look to find your funds, check out where Scotland’s third sector gets its money from.

You should always seek as wide a diversity of funding sources as possible. Whilst grant funding is often the first port of call for third sector organisations, don’t forget that there are other ways of raising money and generating income.

Funding available from the Lotteries,Trusts and Foundations, and government and the EU is extensive, but competition is intense. Research and preparation is the key.  You’ll find help here so you can consider if grants are the best option for you.


The National Lottery is the state franchised national lottery in the United Kingdom. A percentage of the proceeds are distributed to good causes through 12 independent organisations in the UK. In Scotland these are Big Lottery Fund Scotland, Creative Scotland, Heritage Lottery Fund, sportscotland and the British Film Institute. Most programmes are competitive and it can be a lot of work to fill in an application for the major programmes. However the small grant funds such as Awards for All are much simpler. Check the guidelines and make use of the support offered by the Lottery distributors, so you don’t waste your time with an inappropriate or incomplete proposal.

There are a number of other lottery programmes in the UK. The Health Lottery includes 51 local society lotteries which raise money for local health causes managed through the independent charity The People’s Health Trust. The People’s Postcode Lottery provides grants distributed through the People’s Postcode Trust.

Trusts and Foundations

Grants making trusts and foundations come in all shapes and sizes, founded for a variety of reasons, with different social and political perspectives, and with different grantmaking approaches. Identifying those that are worth approaching needs careful research. There are five main types of grant making trusts:

  • Individual/Family/Private Trusts – set up as a way for a wealthy individual or family to practice philanthropy. These trusts usually have a strong philosophy of giving based on the personal values, views and interests of the founder, eg The Robertson Trust.
  • Institutional Trusts – founded from an act of Parliament, Royal Charter or Livery Company. eg The Carnegie Dunfermline Trust.
  • Governmental Trusts – set up by the government, or with a grant from the government, eg The Voluntary Action Fund was set up with funding from the Scottish Government.
  • Corporate Trusts – established by companies transferring shares or capital to trustees to be used for charitable purposes, eg Lloyds TSB Foundation for Scotland. These can be independent from the company itself, or are controlled by the company with company personnel as the trustees.
  • Fundraising Trusts – these are trusts set up to raise funds and then distribute them to other charities, eg Comic Relief (Red Nose Day) and BBC Children in Need.
  • Community trusts or foundations encourage philanthropy and strengthen the voluntary sectors in the countries, regions, and towns in which they operate. Foundation Scotland is Scotland’s only community foundation and busiest grantmaker, making more awards to good causes than any other independent funder.

For more information on applying to trusts and foundations, see the next section on making the ask.

Government Funding

Budget cuts and spending reviews have made substantial changes to central and local government funding. Core funding has been cut, but many organisations have benefited from wider access to contracts as local authorities and the government recognise the key part the third sector can play in public service delivery. As with most funding, government funding programmes have firm deadlines for submitting applications, so you need to plan your programmes well in advance.

The main funding priorities of the Scottish Government reflect current policy objectives and are usually focused on national projects that benefit large numbers of people. Here are some of the currently available funds, contact the Third Sector Unit for further information.

Many quangos and non departmental public bodies also give funding to charities and voluntary organisations. Examples include:

  • Creative Scotland distributes funding for the arts, screen and creative industries from the Scottish Government and the National Lottery.
  • Historic Scotland provides a number of grants and funding schemes to support bodies and individuals in the protection, education and promotion of the historic environment.
  • Scottish Natural Heritage provides funding to promote care for the natural heritage, wildlife, habitats, rocks and landscapes of Scotland.
  • Sportscotland provides funding for organisations involved in Scottish sport.

Local Authorities

Funding from local authorities has significantly decreased in recent years and many grant opportunities have been turned into competitive tendering for contracts and service level agreements. But some local authority grants still exist and many local authorities also administer historic trust funds. Application processes for local authority funding can vary widely. Most local authorities will have the information and documents needed to apply for a grant on their website, and also provide funding support which may include funding searches, bulletins, events and training.

You should work to build your relationship with your local authority as you would with any other potential supporter. You may want to get a local councillor or local authority worker to sit as an ‘advisor’ on your board (non voting so as to avoid conflict of interests). They can alert you to where there is money, who to talk to, and how to navigate the system.

European Funding

The European Union provides a large amount of money for social and economic development in the Member States, a small part of which is available to third sector organisations. Getting money from Europe can be a difficult, slow and painstaking process, but is not impossible. It takes time, effort and persistence. There is increasing competition for the available funds, and the programmes, priorities and guidelines are constantly changing.

Many EU funding programmes require match funding or partnerships of three or more organisations, and some call for cross-sectoral partners. The application process can be demanding, and if you do find partners, think carefully about your position. The lead partner will have to deal with the responsibility of project management and reporting.

If you’re successful make sure you have the right staff to financially manage the project, and don’t offer more than you can deliver. You must keep time sheets and document the progress of the project.

  • The EU Funding Portal is an online resource for Scottish organisations interested in EU funding.
  • Information about European funding is available on the Commission’s website
  • European Citizen Action Service produces an annual funding guide to help give organisations an overview of funds available.