Strategies adopted by Non Governmental organizations to achieve financial sustainability in Kenya

Abstract

Financial sustainability is a state in which an institution has a reasonable expectation of covering its costs for the foreseeable future through a combination of donor funding and locally generated income. The purpose of this study was to identify the strategies that can be adopted by Non Governmental Organisations (NGOs) to achieve financial sustainability. The push for financial sustainability for NGOs is more real than ever before. Kenya is a developing country that has various challenges in terms of social economic development. This has necessitated the work of various nongovernmental organizations across the country. This study tried to identify the factors that nongovernmental organizations (NGOs) have adopted to increase financial sustainability, as data from the National Council of NGOs show that donor funding declined from Sh87 billion in 2007 to Sh81 billion in 2008 and Sh73 billion in 2009. The objective of the study was to find out how strategic financial management, paradigm shift in programming, internal financial funding, strategic alliances and organization structure contributes towards financial sustainability in NGOs. Data was collected using questionnaires and random sampling design used to select the sample of development NGOs whose head office is in Nairobi. The data was analyzed using Statistical Package for Social Sciences (SPSS) 17.0. The study used descriptive statistics and content analysis since the data was qualitative and quantitative in nature. Clearly, from this study strategic financial management was ranked highly followed by proper governance system, strategic alliances, internal financial sources, organisational structure, development funding and paradigm shift in programming in that order. This is a little different from the findings of the study carried out to investigate the strategies adopted by vi NGOs in Kenya to increase financial sustainability a case study of Meru County, (Waiganjo et al 2012). In this study, paradigm shift in programming was ranked highly followed by strategic financial management, then strategic alliances, organizational structure and finally internal financial resources in that order. These calls for further quantitative research on the topic to enhance on the findings established under each variable and establish consensus and relationship between variables. From the research, there is need for NGO to critically strategize on their financial sustainability as the environment of their operation is changing very fast and the needs of NGOs are increasing day by day due to disease epidemics, global climatic changes, natural disasters, diseases and drug abuse.