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Sri Lanka’s charitable organisations need more govt. collaboration: New study

Only 11% of social delivery organisations (SDOs) in Sri Lanka have contracts with the government, compared to the Asian average of 26%, while foreign funding is increasingly scarce with the rise in Sri Lanka’s per capita income, according to a new report.

“Today, 71% of Sri Lankan SDOs surveyed receive foreign funding, making up 54% of their budget. With Sri Lanka having been classified as a lower middle-income country in 2010 and upper middle-income in 2019, foreign funding is increasingly being redeployed to low-income countries,” notes the Centre for Asian Philanthropy and Society’s (CAPS) in the second edition of its Doing Good Index (DGI2020).

The study was conducted in 2019, and Sri Lanka has subsequently been reclassified as a lower middle-income country. However, it is still placed at the higher end of lower middle-income countries list, and therefore it is believed that diminishing foreign funding will continue to be an issue.

The study adds that only 16% of SDOs surveyed in Sri Lanka receive government grants, half the average proportion across Asia, and that government grants make up only around 2% of the average Sri Lankan SDO budget.

In light of these figures, the Doing Good Index advocates greater collaboration between the Sri Lankan Government and SDOs, as government procurement can be an important source of growth for the social sector.

“Only 11% of SDOs surveyed in Sri Lanka have contracts with the government, compared to the Asia average of 26%,” it said, adding that most SDOs continue to find procurement processes lacking in transparency, not just in Sri Lanka but in Asia as a whole.

The Doing Good Index (DGI2020) examines the vital role of the social sector, and how Asian countries help or hinder it. It identifies opportunities for the Sri Lankan Government to do more for society, as well as how private/corporate donations must play their part in meeting people’s needs. 

“The global pandemic has accelerated the decline in foreign funding among local social delivery organisations, and there is a growing reliance on domestic philanthropy more than ever to ensure that community needs are met,” said Institute of Policy Studies of Sri Lanka Research Economist Kithmina Hewage. “It is crucial for the social sector to work closely with the government and corporates to increase domestic funds that not only address immediate Covid-19-related needs, but also longer term needs related to disaster management, environmental conservation, poverty alleviation, and post-conflict reconciliation.”

The Institute of Policy Studies of Sri Lanka (IPS) is the local partner for the Sri Lankan component of the study. 

In terms of regulatory oversight, the study acknowledges that the establishment of the National Secretariat for Non-Governmental Organisations in 1996 made all necessary regulations easily accessible through its official website, and that more recently, it introduced an online platform for registration. However, it notes that the oversight of the organisation has changed frequently between different government ministries, resulting in a lack of continuity and consistency. Furthermore, it says 41% of SDOs in Sri Lanka find laws pertaining to the social sector difficult to understand.

On the tax front, country experts in 14 out of 18 economies, including Sri Lanka, have said they have difficulty in accurately identifying relevant tax policies. Going further, 70% of Sri Lankan SDOs believe it is difficult to claim available tax deductions, according to the study.

On the positive side, the study found that in Sri Lanka, nearly 80% of SDOs report occasional or regular participation in policymaking. Furthermore, 51% of Sri Lankan SDOs receive corporate funding, making up 16% of their average budget, while 40% of Sri Lankan SDOs receive in-kind services from corporates or partner with them to raise awareness of social issues. 

The DGI2020 research surveyed 2,189 SDOs and interviewed 145 country experts across 18 Asian economies: Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam. It examines regulatory regimes, tax incentives, procurement procedures, and sociocultural conditions.