The relationship between cash flow management and the financial performance of NGOs in Kenya: case of NGOs in Nairobi

Abstract

The study sets out the relationship between cash flows management and financial performance indicators of NGOs operating in Nairobi and who file audited financial reports with the NGOs Coordination Board. The financial statements for NGOs operating in Nairobi were obtained from the records and database of the NGOs Coordination Board for the years 2006 and 2010.

From the data extracted from the financial statements and the database, an in-depth analysis involving simple and multiple regression were performed with the aid of the statistical package for social sciences (SPSS) version 19 to establish the relationship between cash flows management and the financial performance as indicated by the fiscal performance ratio.

The concept of financial performance among NGOs is relatively a new one and the study identifies critical areas that need further research to firm up on the ways of measuring the financial performance of NGOs. The regression results displayed no significant relationship between cash flows management and the financial performance of the NGOs registered by the NGOs coordination Board and operating in Nairobi.