Diversification of funding strategies and operational performance of drought-related humanitarian organizations in Machakos county, Kenya

Abstract

This study examined the effect of social enterprise ventures, corporate sponsorships, crowd funding, and NGO membership subscriptions on the operational performance of drought related humanitarian organizations in Machakos County, Kenya. The study was guided by Modern Portfolio Theory, Contingency Theory, Ansoff Matrix Theory, and Resource Dependence Theory. A descriptive research design was adopted, targeting 518 staff from 13 drought-related organizations in the county. Using cluster sampling, 103 departmental heads closely involved in funding decisions were selected. Primary data was collected through structured questionnaires that met validity and reliability standards, with Cronbach’s alpha coefficients exceeding 0.7. A pilot test was conducted with 10 respondents from the Kenya Red Cross Society. Data analysis involved descriptive and inferential statistics, including correlation and regression analysis. Findings revealed a significant positive relationship between diversification strategies and operational performance. Social enterprise ventures showed a strong positive relationship with operational performance (r = 0.600, p < 0.001), while corporate sponsorships had an even stronger correlation (r = 0.769). Crowd-funding strategies also demonstrated a positive but relatively weaker relationship (r = 0.523). NGO membership subscriptions recorded a positive and significant association (r = 0.686). The study concludes that diversification of funding enhances operational performance by improving financial stability, responsiveness, and sustainability of humanitarian operations. It recommends that policymakers and NGO managers strengthen capacity building in social enterprise development and digital fundraising, establish clear ethical guidelines for corporate sponsorships, and promote membership-based funding frameworks. Strengthening these strategies can help humanitarian organizations in drought-prone areas like Machakos County achieve more consistent and effective operational outcomes. In suggestion for further studies, there were some more factors that were not captured by the model but still affected operational performance in Humanitarian organizations in Machakos County. This gave room for further analysis or research in which other researchers may consider pursuing. Therefore, there is need for further research to be carried out to establish what other factors represented by 36.5% could be affecting operational performance because of diversification of funding strategies.