Cambodia's Social Sector Faces Financial Strain as International Aid Declines

Cambodia’s social sector is under growing financial strain as international donors pull back and domestic philanthropy fails to fill the gap, the Centre for Asian Philanthropy and Society (CAPS) said in a report this week. The sector has been hit by a broader global decline in foreign aid, as well as by U.S. cuts last year that terminated the majority of its foreign assistance programs. More than 90% of Cambodia’s Social Delivery Organizations (SDOs) – nonprofits and other civil society groups that deliver social services such as education, health care and humanitarian aid – rely on foreign funding, which accounts for 80% of their budgets on average, CAPS said. That is double the reliance on foreign funding seen among social organizations elsewhere in Asia, according to the group, which studies philanthropic and private giving in the region. Cambodia remained in the “Doing Okay” category of CAPS’s 2026 Doing Good Index, reflecting gains in areas such as registration and public trust. But researchers said heavy dependence on foreign funding, limited domestic giving, low corporate engagement and thin government support have left many organizations exposed. “Cambodia’s social sector has demonstrated remarkable resilience despite operating under increasing financial pressure,” said Annelotte Walsh, CAPS’s director of research. “The challenge is no longer simply attracting foreign funding. It is building a more balanced and sustainable funding ecosystem by strengthening domestic philanthropy, encouraging greater corporate engagement, and creating the policy conditions that enable local resources to flow toward social good.” Eighty percent of Cambodian SDOs surveyed for the index said domestic funding was insufficient, underscoring the need to diversify revenue sources, CAPS said. Trust in the sector has grown, however. More than half of organizations surveyed said they feel trusted by the public, and nearly all said they support individual donations. CAPS said 56% of Cambodian SDOs host corporate volunteers, suggesting considerable potential to deepen partnerships beyond one-off engagement. Mar Sophal, program manager at NGO Forum on Cambodia, said the country’s social organizations have long played a vital role supporting communities nationwide. “As international funding declines, the findings highlight the importance of strengthening domestic giving, improving collaboration across sectors, and creating an enabling environment that allows local organizations to continue delivering impact,” he said.