Arising as a market-induced improvement on existing governmental services and competing with the government for customers and resources, non-profit organisations are a relatively unexplored area of public policy. This chapter on Sri Lanka’s non-profit sector is part of a collection of essays, written by scholars from a variety of disciplines, adds new dimensions to the theory of non-profit organisations, and describes the public policies regarding non-profit organisations that do or should exist in both developing and developed countries. Sri Lanka, a developing country, has a small but growing non-profit sector that engages in the formation of social overhead and human capital, as well as in more traditional social services. The chapter compares Sri Lanka’s non-profit sector to that of the USA and also looks at how the non-profit sector in Sri Lanka is structured, if it does things that are or could be done by private enterprise or government, also assessing which arrangement is more efficient and equitable.