Social Investment Strategies and Sustainability of Nonprofit Organizations in Nairobi, Kenya

Abstract

This study is about social investment strategies and sustainability of nonprofit organizations in Nairobi, Kenya. The study is guided by two objectives; to establish social investment strategies used by NPOs in Nairobi and determine the relationship between social investment and sustainability for nonprofit organizations. The essence of this study is to expand knowledge on social investment, where Kenyan nonprofit organizations can tap social investment strategies for their sustainability in the transformation of livelihood of the communities (beneficiaries) they serve. The findings of this study will be important to the Government and policy makers towards formulating social investment national frameworks and policies like United Kingdom or United States, to actualize the social pillar/ third sector as arched in Kenya Vision 2030. Potential social investors can use the resource to form a better understanding of the Kenya social pillar to enable them make well informed investment decisions/choices. The academicians and researchers may use the resources also as a source of reference but more importantly, steer Kenyan universities (Including University of Nairobi) to adopt social investment/entrepreneurship as an MBA specialization like Harvard, LSE and Oxford Schools of business have done. The results of this study will shed light into other areas of research that other researchers need to put focus on. This study will highlight the role played by social investment strategies and its impact towards sustainability of NPOs in pursuance of realization of their vision. The study research was an exploratory crosssectional survey of nonprofit organizations (NPO) in Nairobi, Kenya. Primary data was collected by use of structured questionnaires and interviews. Senior level management was the research respondents given their role in strategy formulation and implementation. The triangulation aspect of data collection was employed for data authenticity and credibility. The data collected from the study was both quantitative and qualitative. Descriptive and inferential statistics such as mean score, standard deviation, frequency distribution, statistical graphics correlation and hierarchical multiple regression were used for data analysis and presentation. The research found that most of the NPOs in Nairobi County suffer from dependency on foreign donations. However, due to external environmental changes such as the global meltdown, they are adopting to SI strategies like social enterprises, volunteerism, endowment, commercial equity/enterprises and many more with the aim to be sustainable in future. As depicted by Hierarchical Multiple Regression (HMR) there is strong positive direct correlation/relationship exists between SI and sustainability of NPOs in Nairobi Kenya but there are other factors influencing SI adoptions such as social innovation, availability of financing, globalization and internationalization and organizational structure flexibility. Leadership and governance, networking, finance and technical capacity are some of the successful strategies towards NPO’s SI sustainability. SI sector is still underdeveloped and understudied in Kenya. Government, Operating intermediaries and SEs are the main SI players and they should harmonize working relations for full-bodied SI growth and development. The main barriers and challenges of SI growth and development is lack of an enabling policy environment. This can only be mitigated by the government playing their role to increase supply and demand for SI and providing an enabling environment as policy makers.