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The study set out to investigate factors influencing financial sustainability of Local NonGovernmental Organisation (LNGOs) in Tanzania, with reference to Kinondoni District.
Financial sustainability being the act of ensuring a steady flow of funds and generation
of revenue for retaining and continuing the organizational work. The study was based on
four specific research objectives: To determine if maintaining of good relationship
with donors ensures financial sustainability of LNGOs in Tanzania, to establish the
extent to which income diversification leads to the financial sustainability of LNGOs
in Tanzania, to determine the extent to which financial management practices affect
the financial sustainability of LNGOs in in Tanzania, to establish if management
capability affects the financial sustainability of LNGOs in Tanzania. The study relied
on rigorous review of various documents, including various financial statements,
reports, policies, and various laws and regulations governing Non-Governmental
Organisations (NGOs) in the country. Additionally, the study used a sample size of 65
NGOs selected based on operating nationally and are currently actively operational.
Specifically, the researcher chose at least one senior staff in 60 of the selected NGOs,
who were administered with a semi-structured questionnaire while the remaining five
NGOs were administered with key informant interviews from these NGOs’ top
management, such as executive directors. This study was conducted using purposive
sampling through descriptive survey research design. The conceptual framework had
NGO sustainability as a dependent variable while good relationship with donors, income
diversification, financial management and management capability were the independent
variables. The study found that good relationship with donors has a strong correlation
with financial sustainability but is not statistically significant; income diversification,
financial management practices, and capable management all had near perfect positive
correlation with financial sustainability of NGOs. It is therefore concluded that, for
NGOs to be financially sustainable they need to have good financial management,
diversify their income and have a capable management. The study recommends training
of their staff on communication skills so as to ably communicate with donors, income
diversification streams, financial management and qualified management members
among other skills needed for effectively running an NGO in this highly competitive
environment. |
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