INCOME DIVERSIFICATION STRATEGIES AND FINANCIAL SUSTAINABILITY FOR CATHOLIC SOCIETIES OF APOSTOLIC LIFE IN KENYA
Abstract
Purpose of the Study: The study sought to understand how income diversification strategies affect the financial sustainability of Faith Based Organizations. The study focussed on Catholic Societies of Apostolic Life working in Kenya.
Statement of the Problem: Faith-Based-Organizations have been working on income diversification strategies for the financial sustainability of their mission activities, however, the decline in the traditional sources of income such as funds from churches in Europe and America, has seriously enhanced the speed of change. Faith Based Organizations working in Kenya today face financial sustainability challenges that make them reduce the number of mission activities.
Methodology: The study applied a descriptive research design and used survey data collected by use of a questionnaire. Pilot testing was done to assess the validity of the questionnaire. Cronbach’s Alpha was used to measure of reliability of the survey questions. Factor analysis was used to extract variables from the responses. These variables were then used for regression analysis to examine the relationship between the independent variables (strategies of income diversification) and the dependent variable (financial sustainability).
Result: The findings showed that an increase in non-related sources of income diversification strategy and cost recovery strategy increases the financial sustainability of Catholic Societies of Apostolic Life working in Kenya. However, related sources of income diversification strategies are related negatively to financial sustainability. The regression model controlled for the promoters of the society.
Conclusion: The area of operation does not have a significant effect on financial sustainability while the promoters of the society has a positive and significant effect on financial sustainability.
Recommendation: The study, therefore, recommends that Catholic Societies of Apostolic Life working in Kenya should consider engaging more in non-related sources of income diversification strategies as they seek to be financially sustainable. The societies also need to be that as cost recovery strategy is also key to financial sustainability, non-related sources of income diversification strategy is more effective for financial sustainability. Moreover, relying only on related sources of income diversification strategy will not contribute to long term financial sustainability.
Keywords: Income, Diversification, Strategies, Financial, Sustainability, Catholic, Societies
References
Barney, J.B. (1995). Looking inside for competitive advantage, Academy of Management Executive, 9(4), 49-65.
Barrett, C., M. Bezuneh, D. C., & Reardon, T. (2000). Heterogeneous constraints, incentives, and income diversification strategies in rural Africa. Broadening access and strengthening input market systems. University of Wisconsin, Madison: Wisconsin.
Bhalla, K. (2008). Introduction to security analysis and portfolio management, nature and scope, importance: Risk and return. India: Auro University.
Bowman, W. (2011). Financial capacity and sustainability of ordinary nonprofits, Nonprofit Management and Leadership, 22, 37-51.
Carmeli, A., & Tishler, A. (2004). Resources, capabilities, and the performance of industrial firms: A multivariate analysis, Managerial and Decision Economics, 25 (6-7), 299-315.
Carrol, D.A. and Stater, K.J. (2009). Revenue diversification in non-profit organization: Does It Lead to Financial Stability? Journal of Public Administration Research and Theory, 19, 947-966.
Cooper, D.R., & Schindler, P.S. (2000). Business Research methods, (7th ed.), New York: Irwin/ McGraw-Hill.
Deegan, C. (2002). Introduction: the legitimising effect of social and environmental disclosures. Accounting, Auditing & Accountability Journal, 15(3), 282-311.
Edwards, B., & Kane, M. D. (2007). Resource mobilization theory. The Blackwell encyclopaedia of sociology, 1-5.
Eltantawy, N., & Wiest, J. B. (2011). The Arab spring social media in the Egyptian revolution: reconsidering resource mobilization theory. International journal of communication, 5, 18.
Glynn, J.J, Murphy, M.P., Perrin, J and Abraham, A. 2003. Accounting for Managers (3rd ed.). Melbourne: Thomson Learning.
Hilary, S. & Snijder, F., (1999). Understanding the cost-recovery challenge, Department of Water Affairs and Forestry. South Africa.
Kay, J., (2000). Strategy and the delusion of grand designs, in: Mastering strategy: the complete MBA companion in strategy, University of Chicago.
Kendall, D., (2005), Sociology in our Times, Thomson Wadsworth.
Kisinga, F. (2006), NGO Law in Kenya: The Process of reviewing the NGO Act 1990. A Step By Step Road Map. International Journal for Not for Profit Law, 1(4).
Kuria, E. & Wanyoike, D. M. (2016). Assessment of factors influencing sustainability of donor funded projects in Nakuru County, Kenya. International Journal of Economics, Commerce and Management. 4(10), 472-501.
Kurniawan, R., Christiananta, B. and Ellitan, L. (2018). “Evaluation of Corporate Strategy and Dynamic Capability to Business Performance.” International Journal of Scientific Research and Management, 6(03), 199-206.
Kurosaki, T. (2003). Specialization and diversification in agricultural transformation: The case of West Punjab, 1903-1992. American Journal of Agricultural Economics, 85 (2): 372-386.
Lance, C. E., Butts, M. M., & Michels, L. C. (2006). The sources of four commonly reported cutoff criteria: What did they really say?. Organizational research methods, 9(2), 202-220.
Mbugua, P., Nyiva, P., & Gathano, C.W. (2017), Sustainability of community based projects in Archdiocese of Nairobi – Kenya. International Journal of Scientific and Research Publications.
Mohamed, M. M., & Muturi, W. (2017). Factors Influencing Financial Sustainability of Local Non–Governmental Organizations in Puntland, Somalia. International Journal of Social Sciences and Informational Technology, 3(2), 3-28.
Pathak, H. P. (2018). Cost recovery and donor dependency status of LI-BIRD. Prithvi Academic Journal, 1(1), 1-11.
Pfeffer, J., & Salancik, G. R. (2003). The external control of organizations: A resource dependence perspective. Stanford University Press.
Polit, D. F., & Beck, C. T. (2009). Nursing research: Generating and Assessing Evidence for Nursing Practice (8th ed.). Philadelphia: Wolters Klower/Lippincott Williams & Wilkins.
Reisch, L.A., Spash, C.L., & Bietz, S. (2008). Sustainable consumption and mass communication: A German experiment. CSIRO Sustainable Ecosystems.
Salvado, J.C. (2011). Social enterprise models and SPO financial sustainability: the case of BRAC. Journal of Social Entrepreneurship, 2(1), 79-98.
Songco, D.A. (2007). The evolution of NGO accountability practices and their implications on Philippine NGOs. A literature review and options paper for the Philippine Council of NGO Certification.
Tuckman, H. P., & Chang, C. F. (1991). A methodology for measuring the financial vulnerability of charitable non-profit organizations. Non-profit and voluntary sector quarterly, 20(4), 445-460.
van Dijk, M.P., Etajak, S., Mwalwega, B., & Ssempebwa, J. (2014). Financing sanitation and cost recovery in the slums of Dar es Salaam and Kampala. Habitat International, 43, 206-213.
Viravaidya, M., & Hayssen, J. (2001). Strategies to strengthen NGO capacity in resource mobilization through business activities. UNAIDS Best Practice Collection: PDA and UNAIDS joint publication.
