Forestry Challenge Funds are administered by Forestry Commission Scotland (FCS) under the Scotland Rural Development Programme (SRDP).
Two funds are available:

- The Woods In and Around Towns (WIAT) Challenge Fund aims to bring urban woodland into sustainable management and improve recreation facilities by carrying out an agreed programme of work.
- The Forestry for People Challenge Fund covers all Scotland, including the WIAT area. It supports local involvement in woodland projects for health, learning and strengthening communities.
The Community Woodlands Association have produced a useful guide to the Forestry Challenge Funds for community groups.