Factors Influencing Financial Sustainability of Local Health Non-Governmental Organizations (LHNGOs) in Developing Countries (Case of Zambia)

Abstract

Although donors are the major funders for most Local Health Non-governmental Organizations (LHNGOs), donor financing has become very stiff to acquire in the recent past and donor contribution has steadily reduced and this has affected the operations of most LHNGOs in Lusaka and in the country at large. While LHNGOs are important development partners to the government of Zambia, there is uncertainty on their future operations because of their over dependence on donor financing. We aimed at determining the bottlenecks to financial sustainability among LHNGOs in Lusaka and inform them on the best way(s) to avoid these bottlenecks if they are to remain sustainable. We sampled 106 LHNGOs from a list 147 using systematic random sampling. Data was collected using a pre-tested questionnaire with open and closed ended questions. All the 106 questionnaires were distributed and all of them were returned. There was a 100% response rate. Primary data was collected from the Directors of the LHNGOs who were purposefully sampled. We utilized quantitative research method. Using SPSS version 26.0, data was analyzed in univariate and multivariate. Multivariate analysis was done using ordinal regression model. Collected data was analyzed using descriptive statistical and Ordinal Regression in order to find out the influence of independent variables on the dependent variables. The hypotheses test results revealed that sound financial management practice, good donor relationship and income diversification have significant positive influence on the financial sustainability among LHNGOs, for every positive change, there is a predicated increase in the dependent variables. Own income generation had no significant influence on financial sustainability among LHNGOs. The study concludes that if LHNGOs are to remain financially sustainable, they need to uphold values of good financial management, and build very strong relationships with donors for them to able to secure adequate funding that would sustain them in the running of their projects and programs, and set up various income sources to strengthen their foundation financially. There is also need to train LHNGOs Managements on various streams of income so that LHNGOs can reduce overreliance on donor fund.