THE Scottish government is this week expected to announce a £10 million commitment to a venture philanthropy scheme aimed at disadvantaged youngsters worth up to £100m.

Inspiring Scotland's fund for 14 to 19-year-olds is the first in a series of new funds being launched by the Lloyds TSB Foundation, each of which will have £10m a year to spend on good causes.

The first fund, which is being opened to charities for applications on Tuesday, will aim to help disadvantaged youngsters obtain work and education. As well as the likely investment from the government, Inspiring Scotland is understood to have raised money from a number of high-profile business people, whose names will be released in the days ahead. The Lloyds TSB Foundation, which claims to be the largest private charity in Scotland, has itself committed £500,000 of its annual £10m budget to the fund.

Andrew Muirhead, chief executive of both the Lloyds TSB Foundation and Inspiring Scotland, said: "We spoke to a range of potential funding partners and 14 to19-year-olds was an area where a lot of people have a lot of interest, and a huge amount needs to be done.

"If you look at any league table of deprivation facing this age group, Scotland fares particularly badly."

He explained that research carried out for Inspiring Scotland by London-based specialist New Philanthropy Capital found that as many as 32,000 young people in Scotland are unemployed or not in education or training.

It also found that by the age of 21, young men who have spent at least six months without education or training are four times more likely to be out of work; three times more likely to have depression and mental health issues; five times more likely to have a criminal record; and six times less likely to have any qualifications.

It was for these kinds of reasons that the preceding age group was seen as particularly worth targeting.

The idea is that all investors sign up to the fund for three years, with the hope that if they are seeing a return on their money they will stay on for the fund's full seven to 10-year term. As much as 40% of the first three years' funding is already raised, and Inspiring Scotland hopes to have the rest in place by June.

Education Secretary Fiona Hyslop said: "Scotland's people are the powerhouse for progress of Scotland's economy. Scotland needs all its young people to be equipped to play their part in building a sustainable and prosperous economic future for our nation.

"Too many young people in recent years have not been given the opportunity to succeed in Scotland. We need to find better ways to give these young people more chances and more choices to obtain work, training or continuing education."

Having gone on a fact-finding mission to study venture philanthropy in other countries, Muirhead persuaded the board to set up Inspiring Scotland. Like the foundation, it will consider funding applications from good causes around Scotland each year, but with several key differences.

In particular, the foundation will contract a research organisation to identify specific areas where there is a need and it is perceived that things can be achieved. Assuming the first fund is successful, the plan is that one such area will be taken to launch a new fund every year or two.

Charities will have to meet the criteria of the fund they are applying to, and those that are successful will also have performance advisers whose job is to ensure that each charity meets certain agreed targets on what they will achieve and work with other successful applicants to meet the aims of the fund.

There will then be progress reports both on individual charities and funds that will be made available to investors, with the threat that if the money is not producing the necessary social returns in certain areas, charities could lose their funding.

The other difference is that while the foundation generally makes single grants, the money from Inspiring Scotland will be given to the same charities for the seven to 10-year period.

Muirhead said: "It's pretty hard-nosed philanthropy. A lot of people are showing an interest in social issues but have a business background and want to feel that what they are doing is making a difference."

For the first fund, it is envisaged the charities could be aimed at improving education or training for young people. That could mean anything from community training for motor mechanics to helping youngsters get into professions they may not have considered, such as the theatre or outdoor education.