Strategic Financial Practices and Funding Sustainability of Non-Governmental Organizations in Kenya: A Case of Islamic Relief Kenya

Abstract

Sustainable funding assist various NGO's implements several programmatic interventions that not only assist the societies but will equally improve the living standard. But global funding has been in one way or the other affected by harsh economic times. A number of NGOs are stopping operations every day because they don't have sustainable funding. Many new NGOS are falling into the financial un-sustainability pitfall since they are in operation for a few years and then disappear. NGOS' failure to sustain their work arise from various inadequacies and majorly, the lack of financial resources. The general study objective was to establish the strategic financial practices and funding sustainability of Kenyan NGOs with specific reference to Islamic Relief Kenya. Descriptive research design was adapted. The target population was 224 staffs including the management both top and middle level and operational staff team of the Islamic Relief Kenya in Nairobi. Sixty-seven respondents were picked using stratified proportionate random sampling technique and data obtained by questionnaires. Inferential statistics included regression and correlation. The data variable was factored in the multiple regression model. The study found that own income generation contributed the least followed by income diversification and then financial planning while donor fund management contributed most to funding sustainability of nongovernmental. The study found that income diversification played a significant role as it fuels growth through corporate donor sourcing. The study also found that donor fund management played a significant role as evidenced by the information management which affects most and maintaining regular meaningful communications with their donors. The study further found that financial planning systems played a critical role mostly in preparation of budget control which contributed to financial planning as tool for enhancing sustainability. The study recommends that the NGO should hire skilled and competent staffs so that fair financial planning is achieved, the skilled staffs should have understanding in the areas of financial analysis, implementation of plan and budget control. The management team of NGO should find other ways to increase their income from their current source hence to increase income diversification. Through information management, the organization should ensure enhance communication and accountability to maintain a good relationship with the donors. The management should also participate more in income generating activities to enhance accountability.