Effect of Climate Investment Funds on Financial Sustainability of Selected Non-Governmental Organisations in Kenya
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Date
2026-04
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Stratford Peer Reviewed Journals and Book Publishing
Abstract
Despite the global shift towards sustainable financing, green financing accounts for less than
10% of total NGO funding in Kenya, underscoring a significant gap in the adoption of
environmentally aligned climate investment funds strategies. This study seeks to examine the
effect of climate investment funds on the financial sustainability of registered project-based
NGOs operating in Nairobi, Kenya, particularly those engaged in poverty alleviation and
development. The study was anchored on the Theory of Change. Guided by a positivist
philosophy and a descriptive research design, the study targeted 114 project-based NGOs
headquartered in Nairobi, selected from the 161 listed by the National Council of NGOs, using
Fisher’s (1983) formula to determine sample size. Data was collected using structured
questionnaires. Pilot study was undertaken at Hope in Action Association-Kenya to ensure
appropriatness of the data collection instruments. The correlation and regression analyses
revealed that climate investment funds significantly influenced the financial sustainability of
NGOs in Kenya. Climate investment funds showed moderately strong correlations with
financial sustainability, emphasizing their role in diversifying income streams, enhancing
resilience, and attracting donor confidence. Regression analysis confirmed that climate
investment funds significantly impact NGO financial performance, explaining 33.2% of the
variation. The study concludes climate investment funds significantly boost NGO
sustainability in Kenya. Climate investment funds provide both financial and strategic
opportunities, enabling NGOs to align with global sustainability agendas while improving
operational efficiency. The study therefore recommends NGOs and policymakers to adopt
comprehensive, diversified, and well-regulated climate investment funds to secure both
financial resilience and environmental impact
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Citation
Muchemi, W., Mungai, J., & Kariuki, G. (2026). Effect of climate investment funds on financial sustainability of selected non-governmental organisations in Kenya. Journal of Finance and Accounting, 10 (2), 120-137. https://doi.org/10.53819/81018102t5423