Grants
Grants are non-returnable funds provided for a specific purpose linked to public benefit. The most common sources of available grants in Scotland are:
- The National Lottery Community Fund – includes the Scottish Land Fund (SLF)
- Trusts and Foundations (e.g. Robertson Trust, Esmee Fairbairn Foundation, Garfield Weston)
- Architectural Heritage Fund
- Scottish and UK Government (e.g. Capital Regeneration Grant Fund)
Sources of grant funding information
There are numerous websites providing funding information and it is often hard for groups to know where to start. A good starting place is:
- Funding Scotland - from small grants to funding for big capital projects, this SCVO website helps find funding from over 800 different funders that assist Scottish based community groups.
- Foundation Scotland - offers a diverse range of funding programmes for organisations working to benefit a range of communities across Scotland.
Other sources of finance beyond grants
COSS have written a comprehensive and practical guide to alternative approaches to raising finance and fundraising: "Beyond the Usual Suspects". The most common alternative sources of funding (loans, community shares and community bonds) are briefly explained below.
Community Shares Scotland, part of DTAS, can support organisations interested in doing a community share offer or to find out more about loans and bonds.
Loans
These are funds made available over a set period. The main loan has to be repaid as well as the costs of the loan (interest) with an agreed repayment schedule. They come in a large range of shapes and sizes have very varied rates of interest and repayment terms. There is often a fee payment when loans are arranged. Lenders range from the mainstream commercial banks, social or charity banks, specialist social investment firms, trusts and foundations.
Community Shares
Community shares are a fundraising mechanism for community enterprises that serve a community need. Community shares allow supporters to invest in an enterprise or facility that they want to save or to see developed. In turn, the enterprise is owned and governed by the members and shareholders. Community shares have been used to finance many community run projects including shops, pubs, hubs, housing, renewable energy and food and farming initiatives.
Community Bonds
Bond issues or loan stock issues (the terms are interchangeable) are offers to the public to lend money to an organisation on similar terms for several years. It is long-term debt capital. Bonds capital is commonly loaned in smaller denominations, typically £50 or £100, and evidenced by a piece of paper, a bond, which promises to pay interest and return the capital to the bondholder on a set date.
Bonds are widely used by public authorities, credit institutions and companies, but are rarely used by smaller community enterprises – mainly because of the requirement to repay within a fixed period, and to pay interest.
Unlike community shares, bonds do not provide for community engagement. Bondholders are not members, and they have no voting rights in the affairs of the society, so there isn’t the same scope to engage bondholders in the business activities of the society as customers, volunteers or elected directors.
Community Shares Scotland can offer further advise and support on community bond offers and community finance more broadly.
