A significant amount of the third sector’s funding comes from public-sector contracts and grants. This includes contracts and grants from the Scottish Government and local authorities.

Continued economic challenges mean it is unlikely the third sector’s financial outlook will improve over the short-term.

In response to these challenges, there have been calls from the sector to have access to:

• longer-term funding of three years or more
• flexible, unrestricted core funding – this helps 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
• accessible, streamlined, proportionate, and consistent approaches to funding applications and reporting
• timely process and payments
• partnership between the funder and funded organisation