Social sector’s heavy reliance on state aid risks flexibility

At least half of annual budgets depend on state support.

Singapore’s non-profit sector remains heavily reliant on government funding, with state support accounting for at least 50% of annual budgets for many organisations, according to a Bridgespan Group report on Southeast Asia’s social sector.

The report found that 30% of Singapore-based respondents operate with annual budgets below $641,057 (US$500,000), whilst another 30% fall within the $1.28m (US$1m) to $6.41m (US$5m) range. A further 16% reported budgets above $25.64m (US$20m).

It also noted that 36% of organisations hold operating reserves of seven to 12 months, while 33% have three to five months, and 11% maintain reserves above 24 months.

The findings were published in Bridgespan Group’s report Strengthening Nonprofits Across Indonesia, Malaysia, and Singapore, based on 161 survey responses collected between November 2025 and January 2026, including 44 organisations in Singapore.

Across the regional sample, 71% of nonprofit leaders cited a lack of multi-year, unrestricted funding as a significant constraint, whilst 50% reported insufficient coverage of core operating costs. More than 40% said they operate with fewer than six months of financial reserves.

In Singapore, the report said the funding model is characterised by strong public-sector involvement, particularly in areas such as eldercare, disability support and family services, where government grants commonly account for at least half of total budgets.

It added that whilst this structure provides financial stability and predictable funding, it can limit operational flexibility, particularly in adjusting programmes or funding experimentation.

Smaller organisations in Singapore were also 1.6 times more likely to face shortfalls in covering core administrative costs compared with larger nonprofits, the report said.

On ecosystem conditions, the study found relatively low levels of friction in Singapore compared with regional peers.

Only 23% of respondents cited charitable tax incentives as a critical constraint, whilst 14% pointed to compliance requirements and 5% flagged data transparency issues.

The report highlighted Singapore’s ageing population as a key structural driver of demand for social services, with organisations increasingly shifting towards system-level interventions alongside direct service delivery.

It also cited several capacity-building initiatives in the ecosystem, including Care Corner Singapore’s Circle of Care model, which expanded from two preschools in 2013 to 22 preschools and six primary schools by 2023, and The Majurity Trust, which has raised more than $105.13m (US$82m) and channels around 50% of grants to smaller grassroots organisations.

Additional support structures include the Social Service Institute under the National Council of Social Service, the Centre for Non-Profit Leadership, and Pro Bono SG, which provides legal support services to nonprofits.