1.1 Background of the Study
Despite, the vast differences among the NGOs globally, mostly NGOs share a common dilemma when comes to fundraising, and the inadequate funding limits the quality, and quantity of the important work they do. The chasing of unlimited needs with limited resources is one of the fundamental facts of economic life in developed and developing countries. NGOs sector globally are well known for their contribution towards development and poverty reduction especially in the poorest countries of the world and in the developing fragile states where government capacity is often frail and the objective of NGOs are wide and diverse, mostly pursue long-term goals that seek to improve the well-being of communities such as delivery of humanitarian assistance and social goods like health and education (Silva & Burger, 2015).
NGOs face difficulties in securing enough funds and this is attributed to the fact that, the projects they undertake requires a substantial amount of resources, financial and non- financial. And due to high level of poverty and political tension in most of the developing countries and majority of INGOs, donors, and so forth, where the NGOs receive support are experiencing financial difficulties (Batti, 2014). NGOs are prone to suffers from high volatility and uncertainty of income flows which turn them to be susceptible to financial problem. The donor funding volatility and continuity be it in short term or long term makes it difficult for NGOs to plan and implement their organization’s core activities in addition to an increased cost for services delivery, in an increasing competitive and restrictive environment for obtaining funds such as grants and donation which greatly affects NGOs, and the communities they serve (Saungweme, 2014). Shuria (2014) elaborated that organizations face organizational capacity challenges such as lack of dedicated fundraising staffs for the majority of the organizations due to lack of financial resources to retain the professional fundraising staffs. Many of the organizations engage in fundraising professionals or consultants compared to full time employed fundraising staffs.
According to Banks, Hulme, and Edwards (2015) pointed out that international humanitarian actors have to work closely with national organizations through funding of various activities. For example, the donors have to ensure that their priorities and policies are well balanced to enable funding of various project activities globally. Khieng and Dahles(2015) further, elaborated on how strategies applied by Cambodian NGOs to reduce their dependence on external resources affects the sustainability of the organization’s mission, program and funding. The study findings indicate that NGOs dependence on foreign aid has mixed effects on the organizations such as changeability of funding, goal displacement, and top-down accountability leading to reduced organization autonomy.
Gyamfi, (2010) investigated on issues and challenges in financing local non-governmental organizations in Ghana demonstrated that dependence on grants and donations can inhabit the autonomy of the organization in choosing which program activities to undertake and to select the most effective intervention strategies to achieve organization’s program goals. Foreign Donors have their own agendas, and they look at which pressing problems, need urgent intervention strategies to address these problems. NGOs find themselves in a dilemma, and are compelled to follow the funding. This allows donors to dictate on the scope and direction of their activities implementation or else they cannot receive funds at all. As the old saying that goes, “a beggar can’t be a chooser”. NGOs increasingly find that grants and donations from foreign donors are inadequate to meet their current pressing programs needs as well as to expand their program activities. As the developing countries continue in population’s growth, new issues emerges such as poverty, hunger, diseases like cholera, HIV/AIDS, and the number of vulnerable groups and those in conflict-affected countries that need urgent humanitarian assistance from NGOs becomes a major concern all demand urgent attention and require substantial funding (Duffield, 2014).
NGOs are faced with rising cost for staff salaries, high rate of senior management earnings, internal disputes caused by a power struggle for positions many times, issue of poor financial reporting, and the intense scrutiny of financial expenditures by the donors, and the government prevailing political circumstance all putting the organization at a higher stack. Additionally, even wealthy donors lack the resource to fund every worthwhile effort (Weinstein& Barden, 2017). An organization has to meet its projects costs and develop programme for the future, pay wages and salaries of its staff plus all the organizations administrative overheads keep its building and vehicles in a good state of repair, and pay for any new equipment that it needs. The list is endless. The stark truth is that unless, funds are sourced, the organization will not carry out its work and mandate and all pressing needs will remain unmet. NGOs known to implement projects based on certain conditions imposed by the donors. Of these conditions, other seems to be straightforward whereas, other conditions could prove un-favourable to the kind of the development activities that need implemented for the welfare of the local community (Finkler, et al. 2016).
Gawish (2016) investigated the relationship between foreign donors and NGOs in developing countries, the study found out that, NGOs in developing countries depend from foreign donors for funding, moreover, funding from foreign donors are not sustainable, the funds can be there now but can just disappear next day without any warranty and perhaps reappear back again and when choices are few, NGOs cannot refute this reality. The volatility or survival of humanitarian work of NGOs will depend on their willingness to explore alternative funding sources. NGOs in developing countries especially a country like South Sudan in particular though not all the organizations lacked defined organization’s structures for example, organizational chart, buildings facilities, equipment and human resource and inappropriate management approaches for retaining skilled workers in war and conflicts zones (Bunny, 2017). The main influential factor to this is the limited financial resources to enable them plan, organize, design a defined organizational structures and equip their offices with adequate equipment and facilities for purpose of fundraising for funds. In a study on 19 Sub-Saharan African countries, USAID (2010) found out that, only 6.2 % of the NGOs in Africa were financially stable. The study concluded that NGOs lacked financing due to over-dependence on external donors as the only source of funding.
Similarly, (Samina, Khushi2017) the chief executive officer CEO of orient women organization (O.W.O) demonstrated that well organized organizational resources helps in strengthening fundraising efforts by giving an overall idea about the available finances and help an organizational employee to plan for fundraising ventures. The challenge of funding in developing countries especially in the African continent attributes to political volatility, and poor performing economies. It is high time that organizations started to think beyond just donor funds, or external funding.
1.1.2 Overview of National Non-Governmental Organizations in south Sudan
South Sudan alongside Syria, Iraq, and Yemen, is currently classified by the United Nations as one of four “Level 3” (the highest level of humanitarian emergencies in the world), and is the only one in Africa (Blanchard, 2016) Conflict in South Sudan and the Challenges ahead.
South Sudan organization work jointly together under one podium called south Sudan NGOs forum and the forum is an independent coordinating body of National, and International organizations that provide harmonized approaches where NGOs, Government, UN, Donors, and other external stakeholders can exchange information, share expertise, and establish guidelines for more coordinated, efficient, and effective use of aid resources in South Sudan. The South Sudan NGOs forum secretariat primarily focuses on information sharing, coordination, representation, NGO capacity building, and security communications. The forum provided platform that enabled positive engagement of NGOs on a wide range of issues, from humanitarian access and protection of civilians to safety and security.
Despite the difficulties, South Sudan National Nongovernmental organizations for the past few years have been on evolution track, and has seen their presence shift from trivial and noticeable (South Sudan NGOs Forum, 2015). NNGOs remain committed towards working and collaborating with international non-governmental organizations, donors, United Nation Agencies, united nations mission in South Sudan (UNMISS), local communities and authorities throughout the country, with a mutual goal of creating and supporting an environment that facilitates timely, effective and efficient delivery of humanitarian assistance to the South Sudanese people especially those who require urgent humanitarian emergency.
NNGOs in South Sudan are categorizes as local organizations. (South Sudan NGO forum, 2012), Local organizations were self-categorized at the point of registration, and determined by which government institutions they were registered with, local organizations that classified them as national NGOs was registered with the ministry of legal affairs and constitutional development ministry of justice, and the South Sudan Relief and Rehabilitation Commission at the national level. Local organizations that focus on sectors such as agriculture, education, food security, and health, income generating activities, disability, child protection, capacity building, peace building, and emergency relief were classified as National NGOs. In 2015 the parliament of South Sudan passed two laws the Non-Governmental Organizations Bill, NGO Bill, 2015 repealing and replacing the Non-Governmental Organizations Act of 2003, and the Relief and Rehabilitation Commission Bill, 2015, Sudan tribune, (Feb.11.2016). On February eleventh two thousand sixteen, the president of the republic of South Sudan, His Excellency Salva Kir Maryardit, signed into law two bills; Non-Governmental Organization Act (2016) and Relief and Rehabilitation Commission Act
The Non-Governmental Organization Act (2016) requires NGOs to register and submit to constant monitoring by the government. Any NGO interested in operating in South Sudan is required to first register. To register, the organization must take a number of steps, including making available information regarding all known or probable sources of its funding. An NGO will have to submit to government monitoring, evaluating and auditing of all its activities. The legislation includes provisions mandating the use of local talent. It requires that a minimum of 80% of the employees of the NGO in every organization should be South Sudanese citizens. The Relief and Rehabilitation Commission Act, this legislation establishes an NGO regulatory body. Set up an independent legal entity, the commission is under the control of the ministry of Humanitarian Affairs and Disaster management with regard to policymaking and oversight matters, RRC Bill, (2015) laws of South Sudan. The commission has various functions and powers including; Registering and licensing of NGOs, Directing the deployment of NGOs to areas in which it deems there is need, Coordinating, monitoring, and evaluating all programs of NGOs in the country, Investigating NGOs suspected of violating the country’s laws and, and Performing any other function delegated to it by the government. The law intended to wipe up effective service delivery by the aid agencies in the country especially by many international and national NGOs. Although donors and NGOs have expressed concern with the new NGO law passed on February 2016 that the law imposes new regulations, including restrictions on the percentage of NGOs international staff which may impact operations of both development and humanitarian groups (Blanchard, 2016).
According to a report by NGO forum (2012), pointed out that funding for national non-governmental organizations depends on variety of sources such as internal contribution as one of the reliable sources of funding for the organization’s day-to-day running and for program implementation, the international Non-Governmental Organizations are the largest sources of funds for national organization through sub grants and partnerships, direct project funding, capacity development related funding, and other sources include UN agencies particularly UNHCR, WFP and UNICEF, USAID, JICA, and foreign embassies. The communities (beneficiaries) make contribution as a resource source for national organizations, their contribution often are in kind and inform of locally available raw materials and local labour. Government institutions provide funding through donor funded projects through government ministries such as ministry of health, ministry of education, ministry of gender and social welfare, and funding through this source gets channelled to organizations as a requirement from the donor funding the government or inform of partnerships with the government project implementing bodies.
Pooled funds such as emergency response funds (ERFs), and common humanitarian funds (CHFs) administered by UNDP, CHFs operate in five chronic emergency contexts, Somalia, DRC, Sudan, South Sudan and Central African Republic. National and international NGOs can directly access ERFs and CHFs, as well UN agencies, CHF, (2013) Synthesis report of evaluation pointed out that those national organizations in Somalia and DRC have had greater success in accessing the CHFs than in Sudan, South Sudan and Central African Republic. In addition, the research identified two primary factors contributed to low amounts received by NGOs in those three countries attributed to; low knowledge by national NGOs about financing mechanisms and how to apply for them particularly low level of involvement by NGOs in submitting project proposal, and limited involvement by NGOs in the clusters, which in many contexts coordinate allocation of funding. According to statistics by South Sudan NGO forum, (NNGO data review analysis updated 2012) stated that, 30 local organizations expressed having managed grants from $50,000-$99,000 as the largest grant size to date, and 22 of the local organizations had their largest grant size ranging between $200,000-$399,999. Only three organizations expressed having managed a grant size of over $1,000,000. As such, Funding for national non-governmental organization has become highly challenging in South Sudan coupled with the civil war that had worsened the humanitarian situation in the country entering the fifth year.
The increased humanitarian access crisis in South Sudan have been the major reasons behind the rapid growth and activity of national NGOs operating in mostly conflict affected areas. As seen in Somalia with rapid growth and activity of local NGOs because of increased humanitarian access crisis (Tsitrinbaum, 2012). This has led to competition among the NGOs for funding and other resources. Majority of South Sudan NNGOs are known to be short-term implementing partners of INGOs who provide the funding for the project activities, and has led to over dependence by NNGOs on short-term project based funding from the INGOs, (South Sudan NGO forum 2012). The availability and access to donor funding has become limited since most of the national organizations depend solely from foreign donors for funds and the funding are availed depending on the donor’s priorities and agendas.
1.2 Statement of the Problem
In today’s world of economy, donor funding are the lifeline of NGOs in the developing countries. Funding for NGOs of late have become more challenging following South Sudan economic and political crisis and pose a significant hindrance and yet donor funding is a pillar component for NGOs survival (Blanchard, 2016). NGOs in general suffer from high volatility and uncertainty of income flows which turn them to be susceptible to financial problem. The donor funding volatility and continuity be it in short term or long term makes it difficult for NGOs to plan and implement their organization’s core activities in addition to an increased cost for services delivery, in an increasing competitive and restrictive environment for obtaining funds such as grants and donation which greatly affects NGOs, and the communities they serve (Saungweme, 2014).
Securing funds from foreign donors to undertake a project requires a substantial amount of resources, financial and non- financial resources and due to high level of poverty and political tension in most of the developing countries and majority of INGOs, donors, and so forth, where the NGOs receive support are experiencing financial difficulties (Batti, 2014). Betti further highlighted that international donors will always want to know how their money is going to be spent, and what measurable deliverables will be achieved out of the funds. Donor dependence for funds has created huge funding concern especially when the donors cut or stop funding organizations, and perhaps some NGOs cease operations and leave pending projects.
There are NGOs known to have a history of successful fundraising from grants, and they often seek to diversify their funding sources to increase their long term sustainability (John, 2013). NGOs uses numerous methods of fundraising including grant or proposal writing, special events, government contributions, sponsorship from private companies and all these forms of fundraising require extensive investment of effort, skills, assets, staff dedication, and time especially to build and cultivate relationships with the high net-worth individual or corporate donors. For grant or proposal writing a fair amount of expertise and consultancy is required (Weinstein, & Barden, 2017). NGOs ability to fundraise successfully is directly related to organization’s capacity to support and sustain fundraising activities and depends on an innovative, thorough and carefully prepared proposal that addresses a demonstrated need and responds to community priorities to solve a social problem (Berzin, ; Camarena, 2018).
Silva and Burger, (2015) pointed out that NGOs are constrained with limited resource mobilization skills, they wait for external donors or INGOs to approach them, at times donors shift funding based on priorities and in some instances, donors withdraw funds in addition to the restrictions, and difficult application and reporting requirements coupled with the proportion of expenditure allocated as overheads by the donors. Additionally, Martha (2017) suggests that access to foreign funds, depends on donor rules and regulations, capacity of the organization, organizational awareness on available funding opportunities, networking with the resource providers, accountability, and transparency.
Moreover there have been previous literatures examining NGOs challenges when fundraising, there is no research study carried out in South Sudan context specifically about the scope of the study and this pose a gap that the study sought to fulfil, and the current research aim to fill in the knowledge gap by investigating the national non-governmental organization’s ability on their fundraising levels in South Sudan.
1.3 Objectives of the Study
1.3.1 General Objective
The general objective of the study is to investigate the Non-governmental Organization’s ability on their fundraising levels in South Sudan
1.3.2 Specific Objectives of the Study
i. To investigate the effect of organizational capacity on NGOs fundraising levels in South Sudan.
ii. To determine the effect of donors funding conditions on NGOs fundraising levels in South Sudan.
iii. To find out the effect of competition for funding on NGOs fundraising levels in South Sudan
iv. To investigate the effect of financial management practices on NGOs fundraising levels in South Sudan
1.4 Research Questions
i. How does organizational capacity affect NGOs fundraising level in South Sudan?
ii. What is the effect of donors’ funding conditions on NGOs fundraising level in South Sudan?
iii. Does competition for funds affect NGOs fundraising level in South Sudan?
iv. What is the effect of financial management practices on NGOs fundraising level in South Sudan?
1.5 Significance of the Study
The essence of this research study is to investigate the National Non-governmental Organizations ability and their fundraising level in South Sudan.
The study topic will aim to inspire and help national NGOs to use the study findings to improve their managerial skills and establish sustainable systems for their financing structure. The findings of this study will also hopefully guide new founders of national NGOs on how to establish sustainable mechanisms of fundraising. NGOs will be inspired to the findings of this research study and think of self-financing and incorporate it in their regular sources of financing and will get mechanisms of increasing it on regular basis. NGOs will be inspired to findings of this study to increase their techniques and strategies of fundraising which will help them to get sustainable funding for the implementation of their projects.
The academicians, scholars and more so a researcher is another important beneficiary, the results of the final research study will be vital to researcher and scholars, as it forms a basis for further research. The academicians and students will use this study for discussion basis as well as a source of reference material for future researchers on other related topics.
South Sudan government is also likely to benefit, this is attributed to the fact that, access to donor funding for both national and international organizations contribute greatly to development projects in the country especially in economic, social, health as well as infrastructure development not forgetting alleviation of poverty especially in the marginalized and hunger striven communities. NGOs provide humanitarian assistance and employment opportunities to many South Sudanese Citizens, and improving their livelihoods of many communities across different parts of the country.
1.6 Scope of the Study
The descriptive research study will be carried out in Juba South Sudan. The target population of the study will focus on active and registered national non-governmental organizations in Juba, and with the current political turmoil Juba being the capital city is relatively conducive for the study to other parts of the country. Juba is the capital city of South Sudan and is a hub with many developed facilities like, road network and communication access where majority of the NNGOs headquarters are located. It is important to underscore that there has not been any research study focusing on NGOs ability and fundraising levels in South Sudan context.
1.7 Limitations of the Study
The researcher expects to face several limitations during the process of conducting the research. To begin with the researcher uses of questionnaires to collect data where there will be no proof that the information provided by the respondents will be accurate or biased. The researcher will only focus on collecting data for the years 2014 to 2016 possibly using a longer period may yield different results, and trends. Another limitation is the current political turmoil with limited access to different parts of South Sudan where the researcher will be obliged to collect data from the NGOs operating within Juba the capital city of South Sudan. The geographical location may pose challenge to trace recent addresses of some NGOs across the country.
1.8 Organization of the Study
This proposed study will consist of three chapters mainly; chapter one, chapter two and chapter three. Chapter one introduces the background of the study, statement of the problem and the proposed purpose of the study, research objectives, research questions, significance of the study, scope of the study, limitations of the study and assumptions of the study. Chapter2 presents the theoretical review and the empirical review and the summary review of the various literatures written by other scholars, Chapter 3 presents the research methodology, and focus on research design, target population, sampling design, data collection instrument, reliability of the study, validity of the study, data analysis and presentation, and ethical consideration.
This chapter gives a range of previous documented literatures related to the study’s problem to provide the basis of understanding and demonstrating the appropriate scope in aligning the objectives to the existing knowledge and the aim of the literature review is to gain insight into the factors that impede NGOs fundraising ability.
2.1 Theoretical Review
2.1.1 Agency Theory
The theory is a concept that explains how decisions vary when exhibited by members of a group. It describes the relationship between two parties, one party called the principal that delegates work to another called the agent. The theory is so significant because it can help NGOs managers to work more effectively with other relevant set of stakeholders and improve on NGOs partner choices and offer a better and verifiable fits to goals and objectives. According to Jensen and Meckling, (1976) agency theory arises between one or more individuals, one party called principal, hires one or more other individuals called agents, to perform some services and delegate decision making authority to the agents. In this case, the external donor of the funds acts as the principal whereas; the NGOs act as an agent. This is because the donor determines the levels of funds allotted to any organization. The funding donor would like to ensure that NGOs in this case known as agents vigorously pursue the proposal and the funding objectives of the corporation and in this case known as the agent. There are various reasons why a principal in this case a donor, may not be involved in the management, at times the principal may lack the necessary skills, knowledge, and experience of managing the organization. The principal gives Agent capital authority, and other resources to use so that they can give services in return. A conflict of interest arises when the agent pursue their own personal interest at the expenses of the principal. In this scenario, NGO staffs may divert the funds for individual gains in form of high salaries and other general fringe benefits for examples executive and management may give themselves expensive cars and expensive holidays. All these will constitute an expense to the NGO, and service delivery compromised. The problem of information asymmetry whereby the principal and agent have access to different levels of information and in practice this means that the principal is at disadvantage because the agent has more information. The solution to this problem of credibility in reports and accounts lies with appointing independent professionals called auditors to investigate and report their findings (Millichamps ; Taylor, 2008). The agency theory is useful in the theoretical framework of the study and more specifically to the study objectives especially when investigating donor funding on NGOs ability to fundraise.
2.1.2 The Resource Dependence Theory
Pfeffer and Salancikin (1978) developed the resource dependency theory. The theory posits that to understand organizations, it is necessary to understand the environment in which they operate. Such an environment includes other organizations within their sector, as well as other stakeholders, suppliers, and the social-legal structures that regulate the relationships between the actors. National nongovernmental organizations acquire and maintain resources through interacting with other organizations like INGOs and Donors. The resource dependence theory pointed out the importance of board’s members in an organization; the boards function of lobbying and bring resources directly to the organization. The resources that a board can bring to an organization can be legitimacy, advice and counsel, communication networks and privileged access to external groups or stakeholders. A board member can provide legitimacy through its prestigious members, who bring more credibility and authority to the organization and provide confirmation to the rest of the world. This is so significant especially for start-up national NGOs, because reputation drives popularity, better access to larger networks and credibility within the public is where organizations hope to drive much of its support and trust. Board members provide advice and counsel through their diverse background experiences. This is because boards members consist of lawyers, financial representative, top management of other firms, public affairs or marketing specialists, community leaders, and other directors who bring with them important expertise, experience, and skills. In other words, choosing the right board member can provide great human capital to the organization concerning the members’ experiences outside of the NGO (Boesso, et al 2017). (Wachira 2016) research on factors affecting financial sustainability of local NGOs in Kenya, Kiambu County noted that the more organizations dependence on external resources, the more foreign donors controlling these resources. The resource dependence theory supports with this concern of relying only on few funding sources. It is paramount encouraging for NGOs to reduce their funding dependence on only few sources and to reduce the risk due to uncertainty of funding by diversifying their revenue base. NGOs should gradually shift from a few sources of funding like a single and dominant funding source to a great diversify pool of donors funding sources.
2.1.3 Stakeholder Theory
The theory assumes that shareholders are not the only group with a stake in organization or a corporation. It argues that clients, suppliers, and the surrounding communities also have a stake in an organization. In other words, Stakeholders affected by either the success or failure of organization. Managers have a special obligation of ensuring that all stakeholders not only the shareholders receive a fair return from their stake in the company (Donaldson ; Preston, 1995). Stakeholders theory advocate for a corporate social responsibility, which is the organization’s duty to operate in ethical manner, even if that means a reduction of long-term profit of a company (Jones, freeman, & wicks, 2002). The organizational board has a responsibility to be the guardian of the interest of all stakeholders by ensuring that corporate or organizational practices take into account the principles of sustainability for surrounding communities and this is where of late donors put more emphasis when comes to allotting funds to the NGOs for projects activities. The stakeholder theory maintains that the interests of the shareholder should not harm other stakeholders (Freeman, 2008). Stakeholder theory holds that an organization can enhance the interests of its stakeholders without damaging the interest of wider stockholders and indeed the NGOs management has a responsibility to provide the stakeholders with the reports on the operations of the organization. It has a responsibility to justify the value of the NGOs spending plans (Haber, 2004). The theory is relevant in guiding this study because stakeholders play a significant role in ensuring the financial sustainability of the NGOs and its long term survival. The role of the stakeholders is to ensure that the NGOs are financially reliable and all the activities directed towards realizing the mission, goals and objectives of the NGO.
2.2 EMPIRICAL REVIEW
2.2.1 Organizational Capacity on NGOs Fundraising Levels
A number of research studies have been conducted on the global context, to determine funding challenges that NGOs face when it comes to donor funding. Notably, Bell and Cornelius (2013) conducted national survey study of challenges facing non-profit organizations when fundraising in San Francisco California. The researcher deployed a sample of convenience using electronic survey. The study findings indicated that, NGOs do not have a fundraising plan, and competent officers, and the study further reveals that non-profits organizations are stuck in a vicious cycle that threatens their ability to raise the resources that they need to succeed in pursuing the organizational mission, furthermore, the study revealed negative effect on the capacity of the organization especially the small organizations to develop and sustain the skills, systems, and culture that undergird effective fundraising overtime. The conclusion was that, it is important for NGOs to hire qualified personnel for the job, organizations and their leaders need to develop their capacity, the systems and the culture to support fundraising success. For example, the study elaborated more on investing in fundraising capacity, technology, and the need for of board of directors, executive directors, stuffs to engage positively in fundraising as ambassadors and developing systems for fundraising. Understanding the organizational capacity is core when comes to organizational fundraising ability to fundraise from either internal or external.
Similarly, Ceptureanu, et al (2017) carried out a quantitative research using a questionnaire to analysis financing of Romanian Non-governmental Organizations. The study found out three main difficulties, in financing. Although it was relatively difficult to highlight a dominant issue, the most common factor highlighted was link to continuity of donor funds, secondly was related to human resources issue where limited involvement of employees in NGOs activities due to the NGOs poor financial situation while the third difficulty was covering of administrative expenses. In that NGOs find difficulties in renting operational headquarters, the study demonstrated that, most need of the Romanian NGOs sector are about basic survival and less focus on organizational development, they have problems in hiring and retention of experienced experts. In addition, the findings noted issue of low investment in promoting the image and fundraising activities of the NGOs, which has led to poor public information, a distorted image of the NGOs might results to additional funding problems. The study conclusion was that, there should be optimism of NGOs leaders in financial sustainability and the need for competition at the sector level to attract the necessary resources and this competition may results to financial innovation leading to a better quality of projects undertaken by the NGOs
According Gyamfi, (2010) previous literature on issues and challenges when comes to financing local non-governmental organizations in Ghana, asserted that the lack of human resource capacity to raise local funds. The survey demonstrated that, for national NGOs to source funding, then it requires people having the skills and willingness to do it as well as having a good public reputation. Further, the research findings exhibited that NGOs with high professional qualification like degree and masters, staffs were able to win contracts. In contrast, a consultant and expertise is needed to plan, where, and how to seek for funds, especially in an environment characterized with political crisis where most of the population is poor. And as we see of late that inadequate funding greatly complicates the ability of the national NGOs to attract high quality employee. In many cases, NGOs are impinged with the challenge of limited involvement of the board members in the fundraising process.
Similarly Okorley& Nkrumah (2012) study on organizational factors influencing sustainability of local non-governmental organizations lessons from Ghanaian context. The study deployed a simple random and purposive sampling procedures, and the study identified that, supportive board members with supportive leadership, effective management, can have a significant influence when sourcing for funds and the sustainability of the organization, and the respondents in the study suggested that their board of directors should device and use various methods of fundraising in a bit to improve the financial sustainability of the organization, methods should be centred on training individual on proposal writing, expanding the scope of donors and identifying more local sources of funding.
Aseefa, (2015) study findings on challenges and prospects fundraising in action for development in Addis Ababa Ethiopia cited the organizations lack of a proactive resource mobilization strategic plan. Like the organizations exercises a conventional or traditional way of receiving grants through a call for proposal from international donors. The study found that there is no focal person assigned to fundraising and there is less emphasis given from the management of the organization toward fundraising. The factors that affect organizations capacity to fundraising are; availability of reserve funds or budget allocated for resource mobilization, skills, and the experience of staffs.
Kyalimpa et al (2017) investigated the influence of leadership competencies on sustainable funding of local non-governmental organizations in Uganda, the study utilized a descriptive correlation design and stratified sample of 103 local NGOs were obtained and their leaders were interviewed using a self-administered Questionnaires. The finding pointed out the high prevalently donor- dependency syndrome. Majority of the NGOs had active strategic and financial plan but lack a proactive fundraising strategy to support their financial plans. The study further revealed that NGOs leaders were responsible for fundraising and finding alternative sources of income generating activities. The study underpins the importance of the responsiveness of the NGOs leaders to the changing funding environment and the need for dynamic, innovative and proactive leadership in the NGOs sector. It is imperative for funders and NGOs to adopt and build the capacity of leaders in investment and optimal resource utilization to become sustainable with respect to funding.
Philip (2013) investigated about the influence of funding on the sustainability of local Non-governmental organizations in Baringo County, Kenya, using a descriptive research survey design with a sample size of 130 respondents. The findings identified a gap, that local NGOs are still unable to mobilize adequate financial resources due to inability to elect effective leaders, like board members this is because active board influence positively the ability of the NGO to innovate, exploit external opportunities and take advantage of their resources and apply where necessary in a changed and the changing environment. Board members together with the executive directors are seen to influence donations positively through their valuable links and networks for the services they render.
2.2.2 Donor’s Funding Conditions on NGOs Fundraising Levels
According to Singh and Singh (2012) about the basis of donors trust on non-profit organization a case study in India, noted that donors require organizations to use funds wisely for the purpose intended and improve the living standards of the populations meant to benefit. Often funds are diverted to serve other interest of the organization managers outside the scope and work plans of the projects. This has resulted in surprise audit where misuses of funds are suspected by donors and in extreme cases organizations bank accounts have been frozen to minimize the extent.
Batti (2014) conducted a study on the challenges faced by local NGOs in resource mobilization in Africa. Batti utilized secondary data to identify the challenges facing NGOs in sourcing for funds from donors. The results from this study indicate that local NGOs in Africa face challenges such as donor funding conditions and competition for funds. Batti indeed suggests that donors restrict NGOs by not allowing them to work with another donor during the period of funding and as such, local NGOs have to contend with funds provided by one donor and this may restrict their activities. Batti, (2014) furthermore, echoed another concern is that many grants and donations carry restrictions on the types of expenses that they may cover. The most common restriction is to cover only direct programs cost, but not the cost of support services or other overhead cost incurred by the organisations. The NGOs must contribute overhead costs or at least cover an increasing share of these costs over time. Although in some instances, some organizations are fortunate enough to funding in the current operations, but many face certainty over future funding. Sometime if the problems the donors are addressing are still around in, say five or ten year, will donors keep paying program cost, or will donor’s generosity shift to other needier or more pressing causes. Notably, countries experiencing political unrest and conflicts need humanitarian assistance and donations. In contrast, country’s prevailing political situation can result to a cut-off of donor support, sometimes donors goes out of funds or out of business (De Roover, 2017).
Mugo (2015) interestingly deployed descriptive survey study about conditional donor funding and its implication on NGOs autonomy in East Africa, although, the study can be described as empirical study because the study relied on primary data in the form of electrical web based survey to obtain first hand responses from either the directors, finance managers and board members to provide the necessary information about the organization in the three selected East African countries of Kenya, Tanzania, and Uganda respectively using a probability sampling where each NGOs in those three countries have a chance of being selected to participate in research survey, the findings indicated over reliance on external donors funds by NGOs in East Africa, moreover, the external donors exert control due to their ability to dictate funding allocations and programme development leading to the inability of the NGOs to sustain themselves or their project. The study further found out conditions imposed on many grants and donations coupled with the uncertainty of these funds make it difficult for NGOs to do long term planning, improve their services or achieve their full potential. The conclusion was that NGOs-donor relationship essentially very volatile with NGOs in developing countries relying heavily on the foreign donor funding with heavy donor dominance evident, donors have their own agenda where their own views as to which agenda or problems are important and what they consider to be the best intervention strategies to address these problems. With increased competition and limited resources, NGOs are finding themselves in a situation in which they are compelled to “follow the money” and allow donors to dictate the direction as well as scope of activities or receive no funding.
Shuria (2014) employed a descriptive survey to analysis fundraising challenges faced by NGOs when sourcing funds from individuals in Kenya, study variables includes, fundraising methods, laws, and regulations affecting fundraising, and organizational capacities impact NGOs on fundraising. In addition, the study administered questionnaires on the selected NGOs, both closed and open questions were utilized to find out the relationship among the study variables. The findings revealed that, organizations use different methods of fundraising such as special events, annual giving, and advertising for support, though MPESA (mobile phone fund transfer) fundraising is becoming a popular method of fundraising used by the local NGOs as a mobile phone banking system and M-PESA mostly used during disaster events like floods, drought, and fire tragedies. These methods aid in networking, profiling, popularizing the organizations visions to the public, and to the donors as pointed out by the respondents. The study findings further indicated that, many organizations do not have the resources at their disposal to engage to successful fundraising activities. Organizations suffer from fundraising professional to engage teams from different departments and top managers in fundraising activities. Presence of fully paid fundraising staffs is associated with the size of the organization, which has the capacity to pay them. The study conclusion was that most of the organizations use volunteers and board members while few involve consultants during fundraising. It is of great significance for NGOs to adopt the culture of being proactive and constantly read and understand global trends as they set their fundraising strategies and methods and to engage in new and modern techniques of communicating to different donors.
2.2.3 Competition for funding on NGOs fundraising Levels
Aden, (2012) investigated the impact of competition between local NGOs for funding, a case of local NGOs implementing nutrition intervention in Kismayu, Somalia, The study utilized a snowball and convenience sampling. The findings found that local NGOs that were relatively new entities in the sector, lacked professional personnel with the necessary experience that local organizations had limited capacities, both institutional and technical levels of delivering complex humanitarian programmes attributed to their limited experience since most of the NGOs heavily depended on external funding which was insufficient for capacity building. And competition for funding has resulted to lack of coordination and participation among the NGOs sector and this disrupts timely delivery of services.
Mymunah (2015) investigated the challenges faced by NGOs in resource mobilization a case of United Nations Environmental Programme. The study deployed a simple random technique using a sample size of 156 respondents of the NGOs. The study used primary data with the aid of questionnaires to obtain the necessary information. Findings of the study was that International based NGOs generally are better equipped to diversify their funding sources local NGOs. This is seen where they take advantage of their recognizable name and logo, they do have more technical skills, more contacts and connections network with outside groups with which to form partnerships. He went ahead to mention that INGOs when looking internally they have more experience in adopting new programs and adapting to organizational change. They also often have a greater need to seek outside funding because of their higher costs for support services and overhead. Competition further from politically linked organizations and this is a common scenario where some NGOs are directly or indirectly linked to their political parties within their countries and because they are politically connected, fundraising for funding from the foreign donors and development agencies is easier in contrast to those NGOs with no political association or affiliation end up not accessing much needed funds to support their mission and the goals of the organization.
2.2.4 Financial Management Practices on NGOs Fundraising Levels
Saungweme, (2014) deployed a research survey on factors influencing financial sustainability of local NGOs in Zimbabwe. The research focused on four factors of financial sustainability of the local NGOs that is sound financial management practices in form of financial planning and financial accountability measures; income diversification, own income generation and good donor- relationship management practices. The study relied on both secondary and primary data with the help of structured questionnaires. A regression analysis employed to determine the relationship between study variables and findings indicates that local NGOs faces an uncertain future donor funding, as they depend on volatile external donor funding which are unsustainable. The study findings demonstrated that foreign donors funded entirely most of the local non-governmental organizations and on average every organization depended on about three donors and do not have income diversification strategies, no reserved funds, and income generating activities and strategies such as asking for beneficiaries contributions, selling of organizational products were observed to be minimal among the local organizations. The study revealed that when the external donor pulled out from their funding, the local non-governmental organizations cease operations. The regression analysis results ascertained financial management practices have the greatest influence on the financial sustainability of local organizations in Zimbabwe followed by income diversification, then own income generation activities, and good donor-relationship
Mengesha (2014) assessed financial management practices of the local NGOs in Addis Ababa Ethiopia. Descriptive survey was utilized by applying a random sampling technique were both secondary and primary data was used for the study. The study findings were, lack of budget approval by the board, common cost allocation for projects activities, limited participation of the finance team in budget preparation and review, weaknesses in standardized financial statement preparation, and delay in financial statements reporting. The conclusion was that most of the local NGOs depended heavily on grants and donations and there less priority is given to fundraising activities, and board member’s contributions.
Martha D, (2017) conducted a descriptive research of 94 local NGOs selected from a total target population of 1520 using a random sampling method on assessment of resource mobilization and its management with a case of local NGOs in Addis Ababa Ethiopia, Observed seven principle of financial management that most local organizations lacked such as principle on consistency; financial policies and system must be consistent over time, principle of accountability; the moral or legal duty placed on an organization to explains how funds equipment or authority given by a third party has been used, the principle of transparency; the organization must be open about its work, making available information about its activities and plans to the relevant stakeholders, principle of viability; organizations expenditures must be kept in balance with incoming funds both at operational and strategic level, principle of integrity; integrity of financial records and reports depend on the accuracy and completeness of financial statement, principle of stewardship; an organization must take good care of its financial resources in an efficient and effective manner, principle of accounting standard; the system of keeping financial records, documentation and financial reporting and internationally accepted accounting standards and principles must be observed.
2.3 Summary of the Literature Review and Research Gaps
The bulk of the existing literature indicates that there have been previous literatures that focus on challenges faced by local non-government organization in their fundraising ability. For example, Bell and Cornelius (2013) found out that, NGOs do not have a fund raising plan, and competent officers. Ceptureanu, et al (2017) found out difficulties, in financing linked to continuity of donor, human resources issue where limited involvement of employees in fundraising. Singh and Singh (2012) noted that donors require NGOs to use funds wisely for the purpose intended and improve the living standards of the populations meant to benefit. Batti (2014) study results indicate that local NGOs in Africa face challenges such as donor funding conditions, and competition for funds. Gyamfi (2010) and Okorley & Nkrumah (2012) highlighted the challenge of restricted funds from donors that funds received from foreign donors, and INGOs were to be utilized for the intended specific purposes. Aden, (2012) study findings were in line with the findings of Gyamfi and Saungweme on NGOs dependence from foreign donor, and the stiff competition for funding among the NGOs respectively. Importantly Saungweme (2014) found out local NGOs depended on volatile external donor funding which are unsustainable. Mengesha (2014) findings indicates delay in transfer of funds from the donor to the project implementing partner, and gaps identified on timely financial reports submission and availing of monthly financial statement and that is the reason for delay of funds transfers from the donors to the implementers thus affecting project implementation. Philip (2013) identified a gap, that local NGOs are unable to mobilize adequate financial resources due to inability to elect effective leaders, like board members. Shuria (2014) found out that organizations do not have fundraising professionals, mostly organizations depended on volunteers, and board members while few utilizes consultants during fundraising which were line to Aseefa, (2015) findings. Mymunah (2015) findings showed that International based NGOs are generally better equipped to diversify their funding sources than local NGOs as seen by their recognizable name and logo, they do have more technical skills, more contacts and connections network with outside groups with which to form partnerships. Mugo, (2015) findings indicates a volatile NGOs-donor relationship especially NGOs in developing countries relying heavily on the foreign donor funding with heavy donor dominance evident, yet donors have their own agendas with their own priorities as to which agenda or problems are important and what they consider to be the best intervention strategies to address these problems.Martha (2017) findings of the study indicated dependence on foreign funds, donor rules and regulations, capacity limitation of the organization, lack of awareness on available opportunity, networking with the resource providers, and lack of accountability, and transparency. The above literatures were reviewing majorly non-governmental organizations but the case of this study is firmly confined to National Non-Government Organizations. The findings of all the reviewed literatures showed that, nongovernmental organizations do not face the same fundraising challenges of the same magnitude, and pose a gap for further research. The research study therefore will precisely collect data regarding national non-governmental organizations ability and fundraising levels in South Sudan and this additionally pose a gap to be filled since, no previous research was conducted in South Sudan entailing the scope of the research study.