Nonprofits surveyed in three Southeast Asian countries advocate for five shifts in funder and intermediary support​ ​practices that would strengthen their ability to deliver greater social impact to populations in need, demonstrating the importance of strengthening the social sector in these countries.

Nonprofits in Southeast Asia are a vital and growing force, playing a critical role in addressing urgent social and environmental needs. Yet new evidence from our study of three Southeast Asian nations to strengthen the social sector paints a picture of nonprofits caught in a cycle of constrained growth: they have enough to keep the doors open, but the infrastructure around them and the nature of funding they receive limit their ability to innovate and build the organisational strength needed to endure and best serve communities, strengthening the social sector.

This was the core finding of a recent Bridgespan Group survey aimed at strengthening the social sector that received over 160 responses from nonprofit leaders in Indonesia, Malaysia, and Singapore, supplemented by in-country workshops with 45 nonprofit leaders and 20 stakeholder interviews. The analysis revealed that the challenges nonprofits face are systemic rather than due to individual operational lapses. This pointed to five shifts in the practice of funders and other sector stakeholders that would strengthen nonprofits’ ability to pursue their missions and strengthen the social sector as a whole:

  • Change the nature of funding to be long-term and flexible.
  • Target investments to develop nonprofit leaders, staff, and boards.
  • Support smaller organisations and those outside major cities.
  • Establish shared data and support services to strengthen nonprofits’ effectiveness.
  • Strengthen pathways for nonprofits and government to work together on shared priorities.

The full report on strengthening the social sector provides examples of how these shifts have been implemented in practice, illustrating how they can strengthen nonprofits and enable them to reach more people in need. Together, they offer a practical agenda for addressing the most pressing systemic challenges facing the sector:

  • Seven in 10 cite the lack of multiyear, unrestricted funding as a “highly” or “critically” important constraint.
  • More than 40 percent have fewer than six months of operating reserves.
  • Half report that they do not receive sufficient flexible funding to cover their nonprogramme costs to strengthen the social sector.
  • More than 80 percent identify leadership development and staff recruitment and retention as major obstacles to their success.
  • Smaller nonprofits headquartered outside Java in Indonesia and Peninsular Malaysia are three to five times more likely to have fewer than three months of reserves.

Read the full article about strengthening nonprofits in Indonesia, Malaysia, and Singapore by Keeran Sivarajah, Pritha Venkatachalam, Ying Yap, Farih Rahim, Chen Hui, John Carandang, and Roger Thompson at The Bridgespan Group.