Income Generating Strategies and Financial Sustainability of Non-Governmental Registered Organisations in Nairobi City County, Kenya
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Date
2017
Authors
Busienei, Violet Chepchirchir
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
With Donor funding diminishing or diverted to other needy projects, humanitarian
organizations are deepening forays into commerce as they race to reduce over reliance on
dwindling inflows. This study focuses on financial sustainability which is the ability of
NGOs to develop a diverse resource base so that it can continue its institutional structure and
production of benefits for intended beneficiaries after the cessation of donor financial
support. The general objective of this study investigated income generating strategies and
financial sustainability among Non-Governmental Organization in Nairobi City County.
Specifically,the study investigate the relationship between Fund Raising, income
diversification, income generating projects and cost recovery adopted Non-governmental
Organizations on Financial Sustainability, a case of Non-governmental Organizations in
Nairobi City County. The study was conducted through descriptive study. Theories for
anchoring this study are Resource based resource Dependency, Resource Mobilization,
Legitimacy theories. The study was important to all managers in the NGO sector it helped
them understand the strategic practices and help the NGOs sustain their funds, it enlighten
the stakeholders on how to ensure financial sustainability of NGOs and the result of the
study was valuable to scholars in forming a basis of further research. Descriptive research
design was used and a stratified random sampling technique was used to select 127
respondents from a list of NGOs in Nairobi. The study used both primary and secondary
data sources in gathering data for analysis. A questionnaire was used as data collection
instrument. Data was analysed using statistical software, Statistical Package for Social
Sciences (SPSS). Multiple regression analysis was used to determine the relationship
between one dependent variable and one or more independent variables.The study achieved
a response rate of 81%. The findings show that 53% of the respondents were male; majority
60% of the survey organizations had been in operation for over 6 years. The findings further
shows that funding strategies had a mean of 11.68, income generating project strategies had
9.62 while cost recovery strategy and capacity building had 8.21 and 5.69 respectively. With
R Square of 0.589 (58.9%), the model used in this study was fit. In general, the study found
that all variables had strong evidence that there is greater association between fundraising
and finance sustainability.Most respondents agreed that their sustainability was guaranteed
for life as they received substantial grants to support projects. This study recommends that
NGOs explore their strategies to ensure sustainability, recognising however, that the need
for ongoing fundraising is part of what ensures the creativity and innovation of NGOs, while
also being a drain on financial and human resources.
Description
A research project submitted to the school of business in partial fulfillment of the requirement for the award of degree in master of business administration (finance) of Kenyatta University, November 2017