Perceived Manegerial Effect of Selected Internal Factors on Financial Sustainability of Non-governmental Organizations in Kenya: Case of Kisumu County

Abstract

For the last few years, there has been a global pressure on the Non-governmental Organizations to practice financial probity by simply adhering to the standard financial guidelines. The Non-Governmental organizations are registered with NGO Board and are not subject to corporate income tax since their activities are non-profit making and more often than not relieve the government of some of its public and social responsibilities however, there are strict guidelines put in place by the government of Kenya to ensure there is financial efficiency and stay in shape. WHO (1990), describes Non-Governmental organizations as voluntary groups which are independent, not-profit making and they are organized locally, nationally or internationally with an aim of promoting economic, social and environmental developments through lobbying and advocacy. The general objective of this study was to investigate perceived managerial effect of selected internal factors on financial sustainability of non-governmental Organizations in Kisumu County. This study was guided by the following research investigative questions: How perceived managerial effect of diversified sources of funding can affect financial sustainability? How perceived effective financial management can affect the financial sustainability? How perceived managerial effect of effective strategic planning on financial sustainability. Lastly, how perceived managerial effect effective leadership capabilities on the financial sustainability? The study used descriptive design which was successfully administered. The study planned to reach 55 respondents in Kisumu County out of which 42 of the respondents gave feedback which represents 76.3% response rate. This rate was achieved mainly because of proper field organization and coordination with the respondents hence the rate is considered satisfactory. The study showed that the research questions had positive relationship with the dependent variable whereby diverse sources of funding got a 4.907029 score, leadership and capabilities got a score3.702381 while financial management practices got a 4.6706349. The findings further indicated that there was a positive relationship (R = 0.356) between the variables. To check the reliability of this study, then it was passed through the reliability test to check whether the two instruments would produce the same scores. The instrument is in two phases. One, reliable instrument shows the level of accuracy while the unreliable instrument shows the level of inaccuracy. Cronbach’s alpha was used as it is the most reliable coefficient used to determine consistent estimates and it ranges between 0 and 1. The test is more reliable when the coefficient is high. Cronbach’s Alpha was used in this study and the following findings were identified. Diverse source of funding scored a coefficient of 0.703; leadership capabilities scored 0.764 and financial management scored 0.708. Since all the values in the test were above 0.7 then study was reliable.