Fund Allocation, Fund Utilization And Financial Sustainability Of Non-Governmental Organisations In The Central Region, Ghana: A Case Of Red Cross Society

Abstract

The concept of NGO financing based on donor support comes with its own challenges in terms of fund allocation, utilization and transparency. The purpose of this study was to examine whether how NGOs’ allocate and utilize funds is the key factor responsible for reduction in donor fund support which affect the financial sustainability of NGOs in Ghana. The study used primary data obtained from questionnaires that sought the opinions of staff who work with the various branch offices of the Red Cross Society in the Central Region of Ghana. In effect, Krejcie and Morgan’s Table of sample size determination was used and 150 questionnaires were administered to staff. However, 128 questionnaires were returned which was used as a unit of analysis. The findings revealed that NGOs in Ghana allocate funds based on their own developmental agenda, and the respondents agreed that this negatively affect their financial sustainability. It also emerged from the findings that fund allocation and utilization based on donors’ prescription influences the financial sustainability of NGOs in Ghana positively. In addition, the findings suggested that transparency in financial allocation and utilization among NGOs increases the donor confidence and illicit more support. This study finally concluded that fund allocation and utilization based on donors’ prescription have strong positive correlation with financial sustainability whiles a strong negative correlation exist between fund allocation and utilization based on NGOs’ own developmental agenda. The study recommended that there should be the need for management of NGOs in Ghana to seek funding form sources where there will be flexibility with less conditions attached to it.