Strategic Responses to Financial Challenges by Selected Non Governmental Organizations in Nairobi City County

Abstract

The main objective of the study was to determine the strategic responses to financial challenges by Non- Governmental organisations in Nairobi City County. The research design of the study was a cross-sectional survey. The total population of the study was 6500 NGOs in Nairobi and systematic random sampling was used to identify 65 NGOs. Questionnaire was used as the main data collection tool. Data was analysed using the measures of central tendencies and the Statistical Package for Social Studies (SPSS) was used. The study established that reliance on donor funding is still very high and the lack of appropriate skills for proper grants management. Most organisations have adopted diversification and innovative strategies to reduce financial challenges. Coming up with coming generating activities and the use of innovative ways of fundraising are new ways of working in NGOs in Nairobi. Strategic alliance was also identified as a key strategy that creates synergies in program implementation, experience sharing and learning as well as joint fundraising. Proper financial management that would involve budgeting and planning, grants management and project monitoring and evaluation are important activities in any grant receiving organisation. The management leadership styles and the competences of the staff are important in enhancing the efficiency of an organisation. The study recommends that NGOs in Nairobi should have a balance between internal and external sources of income. Coming up with income generating activities and creating reserve fund are key internal sources of fund which could help finance operational costs. External funding which could come through the engagement of different donors could be used for direct program costs. The study also recommends proper financial planning and program monitoring and evaluation to enhance efficiency and effectiveness of the organisation. Continuous capacity assessment and enhancement of all stakeholders is also important in financial management strategy