FACTORS INFLUENCING SUSTAINABLE FUNDING OF NON- GOVERNMENTAL NOT FOR PROFIT ORGANIZATION A CASE STUDY OF ACTION FOR DEVELOPMENT IN ADDIS ABABA

Abstract

Sustainable funding has helped many NGO„s implement diverse programmatic interventions which has not only benefited the communities but has also improved the standard of living. But tough economic times buoyed by global recession have in one way or another affected global funding. Many NGO„s continue to cease operations by the day often due to lack of sustainable funding. The NGOs are overwhelmingly significant in most Africans search for their well-being, so deeply woven in the rhythms of their everyday lives and deeply entwined in their values, attitudes, perspectives and decision-making. Many new NGOs fall into the pitfall of un-sustainability, as they operate for a summer or for a few years and then fade away. The failure of NGOs to sustain their work stems from many inadequacies. A lack of financial resources contributes to their demise. The purpose of the study was to examine the factors that affect financial sustainability of NGOs in Ethiopia with specific reference to AFD in Addis Ababa. In this study, exploratory research design was adapted. The target population of this study included the management team of AFD in Addis Ababa. Stratified proportionate random sampling technique was used to select 13 respondents. This study made use questionnaires for primary data collection. Quantitative data was analyzed using table and ratios. Data collected through the open ended questions and analysis of documents was analyzed qualitatively through content analysis. The study found that donor relationship management contribute most to financial sustainability of nongovernmental followed by strategic financial management then income diversification while own income generation contributed the least to financial sustainability of nongovernmental organizations. The study recommends that in order to ensure that the NGOs remain sustainable; they should procure employees that are competent in strategic planning, plan implementation and financial analysis. The NGO management should increase their income sources from their usual ones. The management should ensure that they maintain a good relationship with the donors mainly by information management, ensuring there is accountability and meaningful communications.