Effect of financial management practices on the financial sustainability of non-governmental organizations (NGOs) in Nigeria
DOI:
https://doi.org/10.33003/fujafr-2026.v4i2.343.51-64Keywords:
Financial sustainability, Non-Governmental Organizations (NGOs), Funding diversification, Grant compliance management, Own income generation, InflationAbstract
Purpose: This study examined the effect of financial management practices on the financial sustainability of Non-Governmental Organizations (NGOs) in Nigeria.
Methodology: An ex post facto research design was adopted, utilizing secondary data obtained from the annual reports of 15 national and international NGOs registered with the Corporate Affairs Commission (CAC) and operating across Nigeria. The study covered an eleven-year period (2014–2024) and employed descriptive statistics, correlation analysis, and fixed effects regression techniques to analyze 165 observations.
Results and conclusion: The results revealed that while fund diversification and grant compliance management have positive but statistically insignificant effects on financial sustainability, own income generation has a strong positive and statistically significant effect. Inflation shows a significant negative effect, whereas NGO size exhibits an insignificant negative relationship with sustainability. The study recommended that should NGOs prioritize investment in grant compliance systems, expand mission-aligned income-generating activities, and focus on building stable and predictable funding relationships. The study contributes to existing literature by providing empirical evidence within the Nigerian context and offers practical insights for enhancing the long-term viability and developmental impact of NGOs.
Implication of findings: The study concluded that the financial sustainability of NGOs in Nigeria largely depends on their ability to strengthen internal financial capacity, particularly through income generation and effective financial management systems.
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