Factors affecting financial sustainability of non-governmental organizations in Luapula province, Zambia.

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Date
2024
Authors
Simuchembu, Zengeni
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Publisher
The University of Zambia
Abstract
Amidst the challenging economic conditions, numerous Non-Governmental Organizations (NGOs) in Zambia have faced severe financial distress, leading to closures and diminishing financial sustainability. This issue has been exacerbated over the past decade as external support directed towards NGOs in Zambia has notably declined. Unfortunately, there is a lack of comprehensive and well-documented studies focusing on the financial sustainability of NGOs in Zambia, further limiting our understanding of this critical matter. This study focused on the factors that influence the financial sustainability of NGOs in Luapula Province, Zambia. The study explored the impact of key factors which are; financial management, revenue diversification, and donor relationship management on the financial sustainability of NGOs in Luapula Province. It utilized a mixed-methods research approach, involving both qualitative and quantitative methods, to gather data from sampled NGOs. The study population comprised local NGOs operating in Luapula Province, and a sample was selected based on those actively operating within the province. A total of 32 respondents participated in the study. The study tested three hypotheses related to the financial sustainability of NGOs in Luapula Province, Zambia. The results showed that there was an insignificant relationship between revenue diversification and the financial sustainability of NGOs in Luapula Province. On the other hand, financial management was found to significantly influence the financial sustainability of NGOs, while donor relationship management did not have a significant impact on financial sustainability. Nonetheless, correlation test shows that financial management and donor relationship have a strongly positive relationship. Based on this evidence, the study recommends that NGOs in Luapula prioritize building core financial management systems, examining the institutional conditions that enable them to meet donor compliance conditions and prioritizing revenue concentration before creating portfolios with multiple revenue streams. These recommendations will help improve NGO financial sustainability.
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Thesis of Master of Business Administration (Finance)
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