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.
