• Doing Good Index 2022 highlights trust deficits, lack of policies, and disparities affecting the social service sector

As Sri Lanka is grappling with several forms of crises which some interpret to be a humanitarian crisis, the social sector, or the social service sector, plays a key role both on its own and in collaboration with many other sectors including the Government. 

Despite the fact that the services rendered by Sri Lanka’s social sector are essential, especially during the crisis that has weakened the Government’s capacity to provide all the necessary services, this sector is currently facing various challenges in terms of dealing with the Government and funders and is not confident about being able to operate in an enabling environment.

The dire circumstances under which Sri Lanka’s social sector operates were discussed in the “Doing Good Index (DGI) 2022”, which was based on a survey conducted by the Centre for Asian Philanthropy and Society (CAPS) in partnership with the Institute of Policy Studies of Sri Lanka (IPS) and which looked into regulatory regimes, tax incentives, procurement procedures, and socio-cultural conditions that have an impact on the social sector. 

The DGI 2022 surveyed 2,239 community organisations and interviewed 126 experts from 17 Asian countries including Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Nepal, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam. The findings of the DGI 2022 and the status quo of Sri Lanka’s social sector activities were discussed during a webinar held last week.

The DGI 2022’s findings 

According to the IPS and the CAPS, the DGI 2022 reveals widespread pessimism about the future of Sri Lanka’s social sector. Based on the DGI 2022’s survey findings, they noted that the country’s social sector has been heavily affected by wider social, political and economic instability and that only a quarter of organisations surveyed for the DGI reported feeling optimistic about the sector’s future, which is less than half the Asian average of 56%. 

In a statement, the two organisations further highlighted that policy consistency and transparency are necessary to facilitate an enabling operating environment for the social sector, and that collaboration between the social sector, companies and the Government is essential for creating enduring solutions to Sri Lanka’s social needs.

With regard to funding available for Sri Lanka’s social sector, the IPS and the CAPS said that the funding landscape is changing, with foreign funding in decline but domestic funding on the rise. They added that foreign funding for the social sector has declined, with only 50% of surveyed organisations in Sri Lanka receiving income from overseas sources, compared to 71% in 2020. 

In addition, they noted that although this was the dominant funding source for non-profits, which made up 59% 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% of an organisation’s income, according to the IPS and the CAPS.

Challenges faced by the social sector in Asia

During the webinar, CAPS Co-Founder and Chief Executive Dr. Ruth Shapiro spoke of several common challenges faced by the social sector in the Asian region. Speaking of the perception of the wealthy about engaging in welfare or charity work with their resources, Dr. Shapiro said that the common answer given by such individuals based in various countries in the Asian region with whom she has spoken was that they did not trust local organisations to receive this support. 

“We realised that we have, throughout the region, a profound trust deficit,” she emphasised, adding that this trust deficit extends to the private sector, social delivery organisations (organisations working in the social services sector), and governments. She added: “Unless we deal with that, we will not be able to work across different sectors to solve our problems and come up with innovative solutions. So, one of the big goals of the DGI is to address this profound trust deficit, which is a serious, debilitating factor in Sri Lanka as well.”

Another common challenge faced by the social sector across the Asian region is the Covid-19 pandemic, which Dr. Shapiro emphasised accelerated certain trends in many sectors including the social sector. She pointed out that the pandemic led to certain good developments, such as the tendency to collaborate at local levels. However, among the adverse trends that were accelerated during the pandemic are various forms of social disparities including health, education, and income disparities, which she noted are becoming intense. 

Furthermore, regarding the need for collective endeavours, Dr. Shapiro added: “We know that to solve our problems, we need to work more effectively, together. We need to bridge the gap between the private sector, the Government, and the social sector, to work more collaboratively because our problems are too big for any one sector to deal with on its own. There is, however, a widespread trust deficit, which is making that kind of cross-organisational collaboration much more difficult.” 

Social sector activities in Sri Lanka

Several speakers involved in Sri Lanka’s social sector activities also discussed the challenges faced by the sector and the Government’s role in addressing them. 

Dr. Shapiro expressed concerns that the state of Sri Lanka’s social sector is not at a satisfactory level. 

“Sri Lanka is in the category of not doing enough. It has gone down from doing better in 2018, doing alright in 2020, and not doing enough in 2022. This really follows the trajectory of the country as a whole in dealing with a host of challenges, not just philanthropy and the social sector.”

Adding that one of the reasons that Sri Lanka has gone down in the DGI 2022 is that while the regulations pertaining to the social sector have not changed, the implementers or those who are in charge of those regulations have changed, Dr. Shapiro pointed out that during the past 25 years, the social sector has remained under the purview of nine different Ministries. The sector has been under three Ministries, i.e. the Defence Ministry, the Foreign Affairs Ministry, and currently the Public Security Ministry, in the past year (2021) alone. What is more, she highlighted how Government policies encourage the social sector to operate more actively and in collaboration with the Government.

With regard to the existing registration process for social sector organisations, she added: “We really do not want organisations to operate in the grey zone; we want them to operate with accountability and transparency. Only by increasing accountability and transparency can you help eliminate the trust deficit.”

Meanwhile, speaking of the practical challenges faced by the social sector in Sri Lanka, Children’s Upliftment Programme of Sri Lanka Founder and Secretary Dr. Nadee Dissanayake described certain challenges faced by the organisation she represents. According to her, obtaining in-kind donations from donors is an arduous task, due to the great deal of documentation work it involves and a large amount of time this process requires. In addition, she expressed displeasure about certain regulations and processes imposed and implemented by the relevant secretariat that her organisation had had to deal with, as they were strict and did not function smoothly. 

Dr. Dissanayake also acknowledged the importance of maintaining and strengthening trust with donors, noting that maintaining transparency in an organisation’s work is one of the ways to do that.

Some of the challenges described by Dr. Dissanayake were responded to by Non-Governmental Organisations (NGOs) Secretariat Director General (DG) Sanjeewa Wimalagunarathna, who said that at present, a total of 1,707 organisations have registered with the secretariat, out of which approximately 60% remain inactive. 

In response to a question with regard to the challenges faced by the secretariat when dealing with social sector organisations, Wimalagunarathna said that there is a lack of co-operation from NGOs, especially when it comes to submitting the relevant reports to the secretariat. Noting that there are also various restrictions that are applicable to NGOs in this process, he said that steps are being taken to relax this process, particularly through facilitating the submission of the relevant reports online and simplifying the reporting formats. During his speech, it was further emphasised that the current reporting systems are aimed at improving social sector organisations’ performance, not blocking their work.

With regard to regulations, Wimalagunarathna said: “Most NGOs look at the Government with the mentality that the Government is trying to regulate them, and question why they should report to the Government/Secretariat when their deals are with the funders, as regulating or asking for reports on what they are doing is none of the Government’s business. 

“The funds they are getting for social services, be it from anywhere in the world, is taxpayers’ money. We need to respect them by ensuring that these funds are used properly and in a transparent manner. Most organisations are talking about transparency, but they do not act in a transparent manner.” 

He raised the importance of social sector organisations that are vocal about transparency and accountability on the part of the Government leading by example.

Social sector’s role in SL’s socioeconomic crisis

During the discussion, CAPS Senior Advisor Kithmina Hewage spoke about the role of the social sector in Sri Lanka’s economy with a focus on the prevailing socioeconomic situation in the country. He identified two important factors, i.e. trust deficit, which has also been noted in the DGI 2022, and the ongoing economic crisis and the resultant humanitarian crisis. 

Adding that the social sector plays an important role in the current context, particularly when governments face risks or constraints such as fiscal issues faced by the Government at present, Hewage said that the social sector has the ability to fill that vacuum and address certain gaps both in terms of funding and also expertise and outreach. One example he presented was how the social sector supported health and welfare services which the Government found challenging to provide during the Covid-19 pandemic.  

“It is clear that social sector organisations provide some of the services that you would expect the Government to provide traditionally – but it is unable to because of the fiscal crisis it is currently facing. What is important is to enable the ecosystem of the social sector to contribute. If you do not create that ecosystem and address the trust deficit, the social sector is going to be dis-incentivised in terms of getting involved, and they are going to find it more difficult to get funding from both domestic and foreign sources, and also in terms of the reach, because, if the Government sends a message that it does not trust the social sector, as a result, the public is also not going to trust social sector organisations.” 

Moreover, Hewage emphasised that the lack of trust between the Government and the social sector is exacerbating the humanitarian impacts, or the negative impacts of the current economic crisis, for this situation restricts the social sector from getting involved in the necessary services.