A Study of the Factors that Determine Local NGO Financial Sustainability, A Case of CIDRZ

Financial sustainability as a concept is
essential for non-governmental organisational operating
in developing countries. While it has been observed that
NGOs will depend entirely on funding from donors, it is
also important that an organisation also positions itself
to ensure that it is able to cover costs for the institution
in the long run. This paper sought to address
determining factors that could affect financial
sustainability in a local NGO such as CIDRZ and
provide factors that management can utilize to enhance
CIDRZ financial sustainability. Specifically, this study
assessed the financial sustainability of CIDRZ based on
frameworks developed in past empirical
research/applied by experts in the area. It examined the
relationship between attributes/ diversification of
funding sources and financial sustainability of CIDRZ.
Further, the possible relationship between donor
relationship management and financial sustainability of
CIDRZ as well as internal system attributes and
financial sustainability of CIDRZ was examined. This
study also examined relationship between business model
innovation and furtherance of financial sustainability at
CIDRZ. Data for the study was collected from a
purposive sample of 51 employees comprising of
supervisors and managers of the organization using a
self-administered questionnaires made available online.
The data was analysed by Stata 15 with correlation
analysis and robust regression methods being used to
establish the relationships. Results of this study showed
that the NGO of interest could be considered financially
sustainable. There were statistically significant
coefficients in the robust regression empirical model for
each of the indexes that were used representing funding
diversification, interaction between donor relationship
management and internal systems attributes, as well as
innovative business models. It is recommended that
management regularly review funding portfolios to
ensure they are sufficiently broad for financial
sustainability. They should also closely align internal
systems with the demands of donor relationship
management to increase likelihood of financial
sustainability.