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