The engagement of social organizations in elderly care services has become a crucial approach to actively addressing population aging. Based on policy text analysis and empirical data, this paper systematically explores the practical dilemmas and optimization paths for social organizations’ engagement in elderly care services. Findings reveal that despite policy incentives to promote social organizations’ engagement in elderly care systems, their development faces three core challenges. The first is the internal capacity deficiency, where some organizations prioritize profit-seeking or government subsidy acquisition, leading to problems such as professional talent shortages, weak management capabilities, insufficient self-sustaining capacity, and uneven service quality. The second is the capacity-building dilemma, as social organizations’ heavy reliance on government resources creates imbalanced power relationships, and administrative evaluation pressures trap them in a vicious cycle of “emphasizing form over professionalism”, constraining autonomous development. The third is the macro-policy implementation gap, where discrepancies between central policy guidance and local fiscal capacities/execution willingness cause unbalanced policy implementation across urban-rural and regional areas, with economically underdeveloped regions facing funding shortages and inefficient interdepartmental coordination. Therefore, social organizations should position themselves as “supplementers” rather than “pillars” in elderly care services. Sustainable development requires reconstructing multi-stakeholder roles (clarifying the family’s foundational role, the market’s dominant position, and the government’s ultimate responsibility), enhancing organizational capacity (improving internal systems, upgrading professionalism, and optimizing talent incentives), and optimizing external environments (implementing policy safeguards, establishing access mechanisms, and promoting collaborative governance). It emphasizes avoiding idealized assumptions and advocates building a “government-guided, market-driven, socially collaborative” elderly care service framework based on local realities to enhance service efficacy.