The National Lottery Community Fund will increase some of its grants to reflect the impact of the cost-of-living crisis on charities.
The news came as the Edinburgh-based Corra Foundation promised a 10 per cent funding “uplift” to help some of its grant recipients cope with soaring inflation.
It means dozens of small youth charities in Scotland will receive a funding boost.
The NLCF, which makes grants worth about £500m each year, said its rises were in response “to increased costs and pressure on services” facing charities.
In August, two other funders – the Bank of Scotland Foundation and the William Grant Foundation – agreed to uplift grants.
All community-based charities funded through the Corra Foundation’s Henry Duncan Grants programme have been offered “an automatic 10 per cent uplift on grants instalments, to be paid over the next 12 months to help with rising costs”, the funder said in a statement.
The same will be offered “where they are needed” through other programmes, Corra said.
The Henry Duncan programme helps about 25 charities each year, according to the funder’s website. A spokesperson said the additional help would cost the foundation about £60,000 in the next year.
Inflation is at just under 10 per cent, a 40-year high. Earlier in the year, the think tank Pro Bono Economics said it represented an “all-hands-on-deck crisis” for the charity sector.
Other funders have outlined their approaches to helping charities through the challenge.
A spokesperson for the NLCF told Third Sector: “We are committed to listening and supporting communities with what is important to them. Cost of living is a growing concern and we are responding flexibly while also monitoring the situation closely to ensure we are in step with communities’ needs.”
The Lloyds Bank Foundation for England and Wales said it hoped the flexibility of its grants would help charities through inflation.
Harriet Stranks, director of grants at the foundation, said: “As a non-endowed funder, this [crisis] has forced us to make difficult decisions about what we fund.
“Lloyds Bank Foundation aims to help charities grow, strengthening the communities and systems they work in. Offering fully unrestricted funding over a longer term (three years) allows charities continued flexibility on how they use the funding, whether it’s for staff costs, utility bills, topping off their reserves, or filling any other funding gaps. It can offer security at times of uncertainty.”