Five Shifts in Practice to Strengthen Nonprofits in Southeast Asia

Nonprofits across Southeast Asia are doing more to meet the region’s rising social and environmental needs. Yet, the support they get from funders and intermediary organisations falls far short of providing what they need to invest in operational capabilities such as leadership development, governance and strategy. In a three-country survey, almost three-quarters cite limited access to multiyear funding as a major constraint. Tightening government budgets and a sharp decline in overseas development aid are making matters more difficult.

This was the key finding of a recent Bridgespan Group survey of nonprofits in Indonesia, Malaysia, and Singapore. The survey findings come at a time of rapidly growing Asian wealth and a corresponding rise in the philanthropic ambitions of wealth holders. There’s a significant opportunity for that growing wealth and rising ambition to translate into a stronger nonprofit sector equipped to achieve more durable impact.  

Doing so calls for funders, intermediaries, and nonprofits to break with the past and develop new ways of working together. Our analysis of survey data pointed to five shifts in practice that would strengthen nonprofits’ ability to pursue their missions:

1. Change the nature of funding to be long-term and flexible. Nonprofits most need longer-term, flexible funding rather than short-term, project-restricted grants. Multiyear, flexible support would enable nonprofits to invest in operational capacity, including measurement, evaluation, and learning. 
2. Target investments to develop nonprofit leaders, staff, and boards. As their organisations grow, nonprofit leaders stress the importance of investing in professionalising staff and planning for leadership transitions. They also need effective boards that provide strategic and financial oversight. 
3. Support smaller organisations and those outside major cities. Our research points to a systemic tilt towards funding large, urban nonprofits. Those outside of major economic centres have difficulty raising funds and attracting talent. Nonprofits headquartered outside the island of Java in Indonesia and Peninsular Malaysia have particular difficulty securing grants.
4. Establish shared data and support services to strengthen nonprofits’ effectiveness. Intermediary organisations provide shared services, research and data that small nonprofits may not individually be able to afford. A nonprofit’s ability to outsource functions such as HR, payroll, and compliance to competent third parties enables leaders to focus on mission delivery, while shared data infrastructure enables nonprofits to deepen their influence and mobilise resources at scale.
5. Strengthen pathways for nonprofits and government to work together on shared priorities. Many nonprofit leaders view closer collaboration with government as an opportunity to contribute meaningfully to national development goals by bringing community insights, stronger evidence, and innovation to the table. Working together, nonprofits and governments can identify shared priorities, scale or replicate proven programmes through public systems, and shape policy in key areas.

These proposed shifts represent a practical action agenda for all the key players: 

• Funders can treat nonprofits as trusted partners and provide flexible, multiyear investments in leadership, staff talent development, and strengthened governance. They also can invest in intermediaries that assist nonprofits with organisational capacity building, data insights, and shared services.
• Nonprofits can cultivate long-term relationships with funders through honest dialogue about financial needs, impact expectations, and risks and vulnerabilities. They can make the case for investing in leadership, talent, and governance as well as measurement and evaluation systems to track progress and share results with funders – all of which ultimately strengthen their programmatic impact.
• Intermediaries could play a vital role in helping nonprofits learn and grow by offering executive coaching, professional training, and support for board development. They also deliver shared services in areas such as finance, HR, compliance, and technology to help reduce the operational burden for small and medium-sized nonprofits, and shared data infrastructure for greater ecosystem coordination.

There are many local and regional examples of how these changes are achievable and, over time, could profoundly change how the social sector in Southeast Asia operates. They also show how strong programmes alone are often insufficient for systems change. Durable impact requires strong organisations and ecosystems behind them. Now is the time to move from individual examples to more widespread change to ensure that the region’s growing resources, nonprofit ambitions, funder intentions, and community leadership coalesce to create durable, inclusive outcomes for the decades ahead.