Factors Affecting Financial Sustainability Of Local Non- Governmental Organization In Nairobi County, Kenya

Abstract

The study's overarching goal was to identify the factors affecting financial sustainability of local non-governmental organization in Kenya. The specific objectives factors affecting financial sustainability of local non-governmental organization in Kenya. The benefactor relationship management, income divergence, financial managements and staff management skills. The NGO council's jurisdiction extends to 12 regions across Kenya. The study adopted stratified random sampling. According to Sekaran and Bougie (2019) sampling refers to process of selecting a group of participants from the target population to take part in a survey. Mugenda and Mugenda (2003) justified the sample of 10% where the sample frame is large (and exceeding a minimum sample size of 30 respondents). Therefore, the sample was made up of 114 NGOs, where one individual was picked to assist fill the questionnaires from each NGO. To gather primary data, self-administered structured questionnaires were employed. Cronbach's alpha coefficient was used in the study to determine dependability. An alpha coefficient of 0.75 or higher indicated that the gathered data is reliable as it has a relatively high internal consistency and can be generalized to reflect opinions of all respondents in the target population. Techniques for descriptive and inferential statistical analysis were both used. To guarantee that the study is conducted in compliance with the university's norms and regulations, the researcher adhered to the rules established by the KCAU University. Conclusions are that the NGOs have established networks with donors and communicate regularly for funding. Despite the NGOs having donor tracking systems they are unable to meet the conditions set by donors for funding like accountability of funding. The study concludes income divergence affect financial sustainability of NGOs to a great extent. Financial management affect financial sustainability NGOs in Kenya through various practices with compliance to NGO conditions being the main factor. The study concludes that that staff management skills is perceived to affect financial sustainability of NGOs in Kenya; the study further concludes that the management of local NGOs in Kenya are not experienced enough to hold their positions as per donor’s required standards. Recommendations are that NGOs should lay emphasis on hiring management staff who are competent this is because competence of staff significantly affects the financial sustainability of NGOs. Therefore, NGOs should not only prepare strategic plans but also periodically review the strategic plans. Staff participation and proper communication in decision making should be highly encouraged in all NGOs. NGOs should adopt proper accounting knowledge and techniques as required by international accounting standards such as preparation of relevant financial reports supported by proper documentation.