Combine sugar, butter, and milk in a saucepan. Bring to a boil. Boil 1 minute, stirring constantly. Remove from heat.
Add butterscotch chips. Stir until the mixture is smooth.
Stir in oats and coconut. Mix thoroughly. Cool 10 minutes.
Drop by tablespoon on parchment (or waxed) paper. Chill until firm.