Widespread pessimism about the future of Sri Lanka’s social sector: IPS

Optimism among social sector organisations in Sri Lanka is low, according to Doing Good Index 2022, a new report from the Centre for Asian Philanthropy and Society (CAPS) in partnership with the Institute of Policy Studies of Sri Lanka (IPS).

The social impact study exposes the underlying structural conditions preventing the region’s social sectors from thriving. It also identifies opportunities for government, companies, philanthropists, and social delivery organisations (SDOs) to work together to address social and environmental challenges.

Sri Lanka’s ongoing social, political and economic turmoil has created a challenging environment for social sector organisations. Only a quarter of surveyed organisations feel optimistic about the sector’s future, less than half the Asian average of 56 per cent, IPS said in a statement. “While the factors inhibiting Sri Lanka’s social sector are embedded within a larger context of the circumstances facing the country, there are still steps that can be taken to make improvements,” said Dr. Ruth Shapiro, Co-founder and Chief Executive of CAPS. “The need to revive the social sector is urgent, and the Doing Good Index is a starting point to show us how the sector can be fortified.”

Foreign funding for the social sector has declined, with only 50 per cent of surveyed organisations in Sri Lanka receiving income from overseas sources, compared to 71 per cent in 2020. Previously the dominant funding source for nonprofits, making up 59 per cent of an organisation’s budget in 2020, this proportion has since fallen to less than a third in 2022. Exacerbated by the economic crisis, government funding, including grants and procurement contracts, is also low, comprising less than 2 per cent of an organisation’s income.

Constant changes to the regulatory environment have created a challenging ecosystem for Sri Lankan SDOs to operate. Over the past 25 years, the NGO Secretariat has come under the purview of nine different ministries, resulting in high levels of uncertainty and unease among SDOs. Policy consistency and transparency are necessary enabling factors for the social sector to effectively carry out its work for Sri Lankan society.

“Local support for Sri Lanka’s social sector organisations is high, and there is room to facilitate domestic giving,” said Dr. Asanka Wijesinghe, IPS Research Fellow. “Sri Lanka has faced—and will continue to face—many challenges. It will be important to foster trust between the private, public, and social sectors so we can work together to rebuild.” IPS and CAPS will also host an online webinar to share highlights of the DGI2022 findings for Sri Lanka followed by a panel discussion on Wednesday November 30 at 10.30 am.

Constant changes to the regulatory environment have created a challenging ecosystem for Sri Lankan SDOs to operate.