TITLE:
Factors Influencing Financial Sustainability of Local Health Non-Governmental Organizations (LHNGOs) in Developing Countries (Case of Zambia)
AUTHORS:
Maximillian Katongo, Jackson Phiri
KEYWORDS:
Local Health Non-Government Organizations, Sound Financial Management Practice, Income Diversifications, Own Income Generation
JOURNAL NAME:
Open Journal of Business and Management,
Vol.11 No.6,
November
27,
2023
ABSTRACT: Although donors are the
major funders for most Local Health Non-governmental Organizations (LHNGOs), donor financing has become very stiff to acquire in the recent
past and donor contribution has steadily reduced and this has affected the
operations of most LHNGOs in Lusaka and in the country at large. While LHNGOs are important development partners to the government of Zambia, there is
uncertainty on their future operations because of their over dependence on
donor financing. We aimed at determining the bottlenecks to financial
sustainability among LHNGOs in Lusaka and inform them on the best way(s) to avoid
these bottlenecks if they are to remain sustainable. We sampled 106 LHNGOs from
a list 147 using systematic random sampling. Data was collected using a
pre-tested questionnaire with open and closed ended questions. All the 106
questionnaires were distributed and all of them were returned. There was a 100%
response rate. Primary data was collected from the Directors of the LHNGOs who
were purposefully sampled. We utilized
quantitative research method. Using SPSS version 26.0, data was analyzed in
univariate and multivariate. Multivariate analysis was done using ordinal
regression model. Collected data was analyzed using descriptive statistical and
Ordinal Regression in order to find out the influence of independent variables
on the dependent variables. The hypotheses test results revealed that sound
financial management practice, good donor relationship and income
diversification have significant positive influence on the financial
sustainability among LHNGOs, for every positive change, there is a predicated
increase in the dependent variables. Own income generation had no significant
influence on financial sustainability among LHNGOs. The study concludes that if
LHNGOs are to remain financially sustainable, they need to uphold values of
good financial management, and build very strong relationships with donors for
them to able to secure adequate funding that would sustain them in the running
of their projects and programs, and set up various income sources to strengthen
their foundation financially. There is also need to train LHNGOs Managements on various streams of income so that LHNGOs can reduce
overreliance on donor fund.