Factors affecting financial sustainability of local ngos in Kenya, Kiambu county.

Abstract

Local NGOs in developing countries experience sustainability challenges that make them close down after few months of operation due to financial challenges. There is need to establish the factors that affect the financial sustainability of these NGOs. The study sought to determine the factors affecting financial sustainability of local NGOs in Kiambu County. The study was based on survey research design. The target population of the study was local NGOs in Kiambu County. The target population was 38 local NGOs in Kiambu County. The study sampled 38 local NGOs. Purposive sampling was used to select 5 employees from each NGO giving a sample of 190 respondents. The study was based on primary data. The data was collected through a structured questionnaire. Content validity index (C.V.I) was used to establish whether the questionnaire measured what it was to measure. Test-retest reliability was done where cronbach’s Alpha was used to measure of reliability. Both descriptive and inferential statistics were used in analysis of the data. The data was presented through tables, pie charts and graphs. The study found that the respondents indicated that donor relationship management, income diversification, financial management and management competence affected financial sustainability of their firms. The study concludes that donor relationship management, income diversification, financial management and management competence positively affect financial sustainability of local NGOs in Kiambu County. The study further concludes that local NGOs in Kiambu County are financially unsustainable. The study recommends management training, adoption of proper financial management practices and establishment of income generating projects. The study recommends a study on financial factors affecting sustainability of international NGOs in Kenya. Key words: Financial sustainability, Non-Governmental Organizations, Income Diversification, Management competence, financial management, Donor relationship management