Philanthropy in Nepal: Opportunities and challenges

Photo by the Nepal Center for Philanthropy and Development

By Rewati Dhakal, Co-founder of NCPD – Nepal Center for Philanthropy and Development

Philanthropy holds immense significance in Nepali society, reflected in its participation in the 2024 government-organised monitoring exercise and national dialogue about effective development. The dialogue brought together government representatives, development partners and civil society to plan how to make their partnership in effective development cooperation more impactful.

Nepal is a leading member of the Global Partnership for Effective  Development Cooperation (GPEDC). Under the Global Partnership, a monitoring of development challenges and opportunities was conducted in the country. The results were discussed at an inclusive multi-stakeholder dialogue held on 21 November 2024, with a wide range of participation from local governments, civil society, the business sector, trade unions and philanthropy. 

Nepal’s national dialogue on effective development

While the discussions focused more on technical tools for tracking fund pipelines and absorption rates, the meeting was an opportunity to further explore broader topics, such as fostering an enabling environment for philanthropy. Also at the dialogue, representing the philanthropic sector, the Nepal Center for Philanthropy and Development (NCPD) provided views on philanthropy’s contributions towards effective development. Sector representatives reflected on the following elements:

• With funding from core international NGOs present in Nepal decreasing by 12.7% in FY2021/22 (dropping from USD 160.2 million to USD 139.9 million¹), Nepal needs additional funding to implement the SDGs and national plans. 
• The whole-of-society approach² needs to be more effective, aligning the private sector with the SDGs and social protection measures.
• The government’s procurement, tax and operational policies limit partnership opportunities by failing to create an enabling environment for sharing and harnessing resources and capacity with civil society organisations.
• There is an opportunity to harness the skills, capacity and resources that exist within the NGOs and CSOs.
• Aid tracking and financial transparency should include the overall development cooperation and aid received through all the channels, including incoming international funds mobilised by international NGOs and philanthropy.  

The data collected during the GPEDC monitoring indicated that development partners have improved their cooperation with CSOs, whereas the government’s regulatory environment should improve further³. The enabling environment for civil society, including philanthropy, was rated as moderate by government representatives and development partners but as basic by CSOs. 

Mr Upakar Pandey, of Nepal’s Centre for Good Governance and Peace, underlined civil society’s specific concerns about the legal and regulatory environment, which reflect restrictions on the ability of CSOs to exist. “The registration of CSOs is complicated and time-consuming, discouraging potential CSOs from participation in initiatives,” Mr Pandey commented in the GPEDC Steering Committee meeting. The difference in views lies in perceptions about delays in project approvals and bureaucratic inefficiencies, which are said to deter partners and donors, and contribute to falling international assistance for Nepal.

While philanthropic organisations contribute significantly to Nepal’s development, stakeholders have always felt that an enabling environment is missing. They also face similar challenges to CSOs in the cumbersome registration process for philanthropic organisations, which requires a police clearance report, financial source documentation, office details, and citizenship certificates of members.

During Nepal’s 2024 multi-stakeholder action dialogue, the civil society representatives proposed a set of commitments from the non-governmental sector to: 

• Involve and facilitate more participatory and inclusive monitoring and evaluation processes;
• Support capacity development and mobilisation for more participatory and collaborative efforts for the achievement of the SDGs and for making progress on leaving no one behind; 
• Bring in representative and local voices towards improving the four effectiveness principles of development cooperation⁴; 
• Contribute through a ‘seat at the table’ in the public policy setting to promote a realistic whole-of-society approach.

On a positive note, civil society’s Pandey said the government’s launch of the  Development Finance Information Management System (DFIMS) would improve transparency.

Contributions of philanthropic organisations

In recent years, the growing sense of ownership and motivation among people to address societal challenges has increased philanthropic activities. While much of the sector remains informal, the number of formally registered philanthropic organisations has risen significantly, with many engaged in impactful work across various sectors.

Philanthropic organisations have played a pivotal role in Nepal’s development, particularly in areas where government services are limited, such as health, education, poverty alleviation, disaster response and environmental conservation. Beyond direct service delivery, NGOs have contributed to research, knowledge sharing, capacity building, and policy advocacy, thereby strengthening Nepal’s broader development framework.

Key areas like streamlining cross-border donations and reducing bureaucratic complexities could benefit from more focused attention in future discussions. On a hopeful note, the Ministry of Finance representatives expressed commitment to improve the collaboration with the stakeholders and ensure more transparency and accountability in financial tracking, and also stressed enhancing cross-ministerial as well as multi-sectoral coordination. The aim for joint action could be to create an enabling environment for the local Nepalese philanthropy sector, since philanthropy receives and provides grants, and so can lessen the financial burden on the Government of Nepal to carry out development programmes. 

Conclusion

The GPEDC dialogue event was well-attended by bilateral and multilateral donors, reflecting their strong engagement. However, the limited representation of philanthropic organisations highlighted the importance of enhancing inclusivity in such forums. By fostering more diverse participation and addressing systemic challenges, these platforms can become even more impactful in promoting collaboration and advancing the philanthropic sector. The Ministry of Finance set a good foundation for public-CSO-philanthropic collaboration when it proactively shared the GPEDC monitoring report with key stakeholders before the event.

Philanthropic organisations are integral to Nepal’s development, addressing critical gaps in health, education, disaster response, and environmental conservation. Civil society and philanthropy want to be aligned with national development priorities. We in the philanthropic sector of Nepal look forward to collaboration with the government and CSOs, including philanthropy, to work together to create a policy environment supporting effective development.

However, bureaucratic hurdles, mistrust between stakeholders, and declining funding threaten their sustainability. A concerted effort by the government, development partners, and CSOs is needed to create a supportive environment for philanthropy, enabling it to scale its impact and contribute more effectively to Nepal’s development goals. 

At a time when international funding is shrinking and Nepal is graduating from the list of least developed countries, it is high time that an enabling environment is created for the national and international donors and collaborators to increase their donations and engagement in Nepal’s development.   

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1. Development Cooperation Report, 2021/22, Ministry of Finance, The Government of Nepal. 
2. According to the United Nations Educational, Scientific and Cultural Organization, A whole-of-society approach embraces both formal and informal institutions in seeking a generalised agreement across society about policy goals and the means to achieve them.
3. Country results brief – Global Partnership 2023-2026 Monitoring Round, Global Partnership for Effective Development Cooperation Report. https://www.effectivecooperation.org/midtermmonitoringinsights
4. Country ownership, focus on results, inclusive partnerships, transparency and mutual accountability. 

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