They say kinship carers such as themselves are discriminated against by being denied many of the supports offered to foster carers, including basic financial allowances, educational support and child therapy.
The group, part of the Scottish Kinship Care Alliance, claim they save the Government about £600m a year by looking after 3200 children in formal arrangements as well as many more who are not in officially recognised placements.
Members of the alliance will give evidence to the Education and Culture Committee of the Scottish Parliament tomorrow as it considers the Children and Young People Bill, then demonstrate at Holyrood on Wednesday.
They are calling for changes to the bill, which they say will entrench discrimination against kinship-care families where friends or relatives, usually grandparents, take permanent care of a related child when their parents are unable to care for them.
The bill includes plans to introduce a kinship care order, which the alliance says will cut costs to councils by removing "looked after" status from a large proportion of the children affected. The organisation fears this will further cut the support given to grandparents looking after their young relatives.
Anne Swartz, chairwoman of the alliance, added: "These are the same children who would have gone to foster or residential care, but have been taken in by a relative instead. Yet the essential support services available to the kids if they go to foster care are denied when they are placed with family.
"Kinship care provides the best outcomes for these kids and yet the majority are given no support at all and the Children and Young People Bill is going to cut the little that there is. Meanwhile we are saving the Scottish Government at least £600m in avoided care costs."
The alliance says children of comparable levels of need should be treated the same way, whether they are in foster care, kinship care or informal kinship care, and that therapeutic services should be available to all kinship children.
Tulip Rippingale, a kinship carer from Dumfries and Galloway, said more relatives would take on the role for children who are at risk if they were given extra help.
"They simply can't cope without basic supports such as financial allowances to enable them to give up jobs, and respite for an occasional break. All of this and so much more is offered to foster carers, where we know the kids suffer and have poor outcomes, whereas kinship care helps the children maintain their identity and culture and remain with their family.
"We are not asking for much. If these supports were in place, many more relatives would take in vulnerable children and take the pressure off the residential care and foster systems."
A report from the Buttle UK Trust in April found that informal kinship carers save local councils between £23,500 and £56,00 a year, but that many such families lived in poverty with 31% lacking money for at least one of eight basic necessities, including heating and winter clothes.
Stephanie Lenehan, 21, was raised in kinship care and still lives with her grandmother.
She is backing the demonstration and said: "Being brought up with my gran was the best outcome for me as I still got to see my family and friends. But kinship carers like my gran don't get enough support or recognition, and that has to change."