| dc.description.sponsorship | Financial sustainability has been a matter of on-going concern for non-governmental organizations, with scarcity of resource and mounting societal needs. The enduring problem has been on how to attain financial sustainability and reduce over-dependency on donor funding. It is hypothesized that engaging in financial sustainability practices will enhance financial performance of non-governmental organizations. The main aim of this research was to examine the effect of financial sustainability practices on financial performance of non-governmental organizations in Kenya. The following specific objectives guided the study; to determine the influence of funding diversification, financial planning, donor relationship management and financial risk management on financial performance. Stakeholder theory and resource dependency theory were adopted to anchor the study. A descriptive research design was used in this research. The population of the study were the 10 Kenya Red Cross Society departments in Nairobi. The unit of observation was the 389 employees in these departments. Sample size was 198 employees stratified according to their departments. For ensuring that the questionnaire was accurate, valid and reliable, a pilot study was undertaken. Primary data obtained using questionnaires was collected. The questionnaire's validity and effectiveness was tested in this study by randomly selecting 39 employees from KRCS to complete it. Those respondents used in the pilot study were not included in the final study. The questionnaires were administered through emailing as well as drop and pick later method. Upon collection of the data, it was coded in quantitative format so as to enable analysing through use of statistical package for social sciences (SPSS) version 24. Descriptive and inferential statistics generated included frequencies and percentages and simple and multiple linear regression respectively. Descriptive and inferential statistics generated were presented in tables and figures. The study revealed a significant positive relationship between funding diversification, financial planning, donor relationship management, financial risk management and financial performance of NGOs in Kenya. This study concluded that financial sustainability practices are essential for NGOs to use in their endeavor to improve on their financial performance. The study recommend management of NGOs should implement funding diversification, financial planning, donor relationship management and financial risk management in their operations to enhance financial performance. It is further recommended policy makers should come up with sound practices to guide NGOs on financial performance | en_US |
