Track: Master Thesis Competition
Financial sustainability is the ability of public administrations to continue now and in the future current policies without causing the debt to rise continuously. Both Local and international NGOs in Lusaka have had challenges on financial sustainability. However, there is little evidence on key risk factors affecting sustainability of local NGOs in Lusaka. This study thus, sought to examine the risk factors that affect the financial sustainability of NGOs in Zambia.
The study took a quantitative approach and a total of 53 respondents interviewed, out of the 65 invited representatives of the local NGOs in Zambia. Inherent risk factors, collateral risk factors and environmental risk factors were used as independent variables while financial sustainability of NGOs was the dependent variable. Linear regression analysis was used to establish the significance of the effects and correlation analysis was used to establish relationships.
The results showed that none of these risk factors has a significant negative effect on financial sustainability of NGOs in Zambia. Despite the mixed coefficient signs, no significant correlations were established. Thus, the study recommends a strong need for NGOs leaders to set up a clearly defined funding policy and the framework for tracking the financial flows of the organization. In addition, Policy makers should consider opening up more partnership opportunity for local NGOs and focus much on empowerment programmes so as to level the ground field for all NGO players in Zambia.