Effect of Financial Planning Strategies on Financial Sustainability of NGOs in Nairobi County Kenya

Abstract

With diminishing donor funding or its redirection to other pressing projects, humanitarian organizations are increasingly exploring commercial ventures to reduce their reliance on shrinking financial support. The primary focus of this study was to analyze the effect of financial planning strategies on financial sustainability of non-governmental organizations in Nairobi County, Kenya. The study employed a descriptive research design, drawing on theories such as Resource-Based theory. The study focused on a population of 201 NGOs that were fully registered with the NGO coordination board and located in Nairobi County. The primary data for this study will be collected using a self-administered questionnaire. Both qualitative and quantitative data was generated through the research process. Descriptive statistics, including absolute and relative percentages, frequencies, measures of central tendency, and dispersion (mean and standard deviation), will be employed. The findings were presented in tables and figures, with explanations provided in a narrative format. Furthermore, the study utilized Karl Pearson’s coefficient of correlation and multiple regression analyses to explore the relationships between the independent variables and the dependent variables, enhancing the depth of the research and contributing to a comprehensive understanding of the factors influencing the performance of local NGOs in Kenya. Findings revealed moderate agreement on the effectiveness of financial practices but significant variability, indicating inconsistent implementation. Strong financial planning was positively correlated with improved performance, while donor fund management showed no significant relationship with organizational outcomes. These insights provided a comprehensive approach to enhancing financial sustainability and organizational effectiveness within the NGO sector.