DETERMINANTS OF FUNDING ACCESS FOR NON-GOVERNMENTAL ORGANISATIONS: A CASE OF MOSHI MUNICIPALITY IN TANZANIA

Themistocles Kweyamba¹⁺ --- John Jeckoniah²

¹ Moshi Co-operative University, Tanzania

²Department of Development Studies, Sokoine University of Agriculture, Tanzania

Keywords:NGO, Access to funds, Developing countries, Donations, Roles, Determining factors

ARTICLE HISTORY: Received: 6 July 2017, Revised: 8 August 2017, Accepted: 22 August 2017, Published: 9 September 2017

1. INTRODUCTION

Access to funds is a major challenging problem facing many NGOs in the globe and Tanzania as well. Non-Governmental Organisations (NGOs) have been playing a major role in harnessing the potentials of people for national development but they are constrained by funds availability (Kamau, 2006; Jailobaeva, 2014). Availability of funds is the ability of an NGO to secure and manage sufficient resources to enable it fulfill its mission effectively and efficiently hence provide beneficial services to its beneficiaries and the community as well. NGOs are vehicles of development and undertake activities to fill in developmental gaps that governments may not adequately fill, or in other words they complement government services. They are therefore partners in effectuating the developmental terrain of many countries (Kang’ethe, 2010). In the last decade, the support to, and interest in NGOs has grown in many developing countries.

According to Lekorwe and Mpabanga (2007) NGOs have advantages of being more flexible, adaptive and quick to respond to peoples’ needs than governments and other development agents. Furthermore, they deliver higher quality socio-economic services and programmes to the very poorest sectors of the society in a cost-effective and efficient way for sustainable development (Todaro and Smith, 2006). In 1978 Tanzania had had registered 17 NGOs and the number increased to 813 by 1994. Not surprisingly, by 2008, Tanzania had already registered more than 10,000 NGOs to operate in different parts of the country (Shivji, 2007) and the number has been increasing since then to date. Unfortunately the increasing number of NGOs in Tanzania has not been accompanied by adequate access to funds. The inadequate funding access presents major threats to operations of NGOs since funds availability  tends not to be predictable, but also become volatile, something which results into NGOs’ competition and struggle for funds.

For that matter, NGO funding should be seen as a process and not an end. Hence, NGOs should not secure funds once and rest on that success, but more efforts are needed on the same hence a need to analyse factors determining NGOs’ access to funds. For a long time NGOs have relied on the generosity of donors to support their operations. However, such funds have steadily declined where donors have withdrawn their support decided to focus on the programmes and projects related to humanitarian relief and recovery (Omeri, 2015). Consequently, NGOs have realised that such funds are becoming insufficient to meet their needs and rising services delivery costs (Benerjee, 2006). This has therefore affected the service delivery of NGOs in the study area. Some authors (for example (Brehm, 2001; Shivji, 2007; Li and Lassa, 2015) argue that many NGOs find hard to survive due to threats presented by limited funding.

There are incalculable disadvantages to NGOs; the government and the community due to inadequate access to funds. If such trend of inadequacy of funds continues, NGOs are more likely to lose credibility from the people they serve. The reliance of people on NGOs will eventually turn back to the government hence increase the overreliance burden on the government. Again, they will lose even those small funds they used to get from donors if they stop operations. In view of the above, there is more evidence that scant information exists on factors affecting NGOs’ access to funds in Tanzania and in the study area. In so doing, there is a need to analyse factors that determine access to funds for NGOs. Many studies attempted to focus on sustainability of local NGOs (for example (Pallavi, 2005; Fafchamps and Owens, 2008; Okorley and Nkrumah, 2012; Kang’ete and Manomano, 2014)) but are not conclusive and cannot be relied upon as NGOs differ in nature, locality and context. The results showed that NGOs’ access to funds is a major issue for NGOs’ survival.

For example whereby Okorley and Nkrumah (2012) reported that access to funds, quality material resources, supportive leadership, development of needs-based and demand-driven programmes, and effective management were major factors for NGOs’ sustainability; Kang’ete and Manomano (2014) identified four factors: funding challenges, corruption and embezzlement of funds, poor synergy and poor collaboration between them and the government, and inadequately skilled labour force. Although there is general consensus in literature that access to funds is still a major factor for NGOs’ sustainability, a gap exists in inconsistencies in literature on the determinants of funding access for NGOs in Tanzanian context. In that case, there is paucity on factors that determine access to funds for NGOs in the study area. The research aimed to fill this gap in literature. Therefore, the study examined factors determining access to funds for NGOs and established the relationship between the factors and access to funds for NGOs.

2. METHODOLOGY

The study was conducted in Moshi Municipality in Kilimanjaro region which is located in the north eastern part of Tanzania Mainland. The municipality had 48 NGOs (United Republic of Tanzania, 2016) operating in many different areas of social development: working with vulnerable groups of the society, working for the protection of the environment, working on health related issues (Tanzania Council for Social Development, 2011). The area was selected because it is among the municipalities in Tanzania which have many NGOs focusing on economic improvement of the poor and vulnerable people. Moshi municipality is among the fast growing municipality in terms of the socio-economic activities carried out such as tourism and farming. These have made the municipality to be popular in intercultural experiences in the country and beyond borders hence a good case to explore NGO funding.

2.1. Study Design and Data Collection

The study adopted a cross-sectional study design whereby data were collected only once. The design was adopted due to the nature of the study objectives and its advantages over other designs, especially when time and other resources are among the constraints for the study. Other design such as longitudinal study designs demand researchers to conduct several observations of the same subjects over a period of time, sometimes lasting for many years. The unit of analysis was NGOs. The study used simple random sampling – lottery technique to select 481¹ NGO staff whereby at least one from each NGO was selected to participate in the study. Eight (8) focus group discussions from each intervention were conducted with six participants from each discussion group. The staff comprised of those at the management level and the service providers. The study also involved 30 key informants who were selected purposively based on their positions and expertise on NGO issues. In this case, twenty one (21) Ward Executive Officers from 21 wards, 8 hamlets (mtaa) leaders and 1 from the district community development office were also selected to participate in the study as key informants.  Information obtained from the latter group generated qualitative data for complementing and triangulating the findings established from quantitative data.

The study employed a mixed method approach whereby both quantitative and qualitative data were collected using sequential form in which one type of data provided a basis for collection of another type of data. Qualitative data were collected form key informants in order to obtain in-depth information to complement that which was obtained from the questionnaire. Quantitative data were collected from NGOs by using copies of questionnaire with open and closed ended questions as it was less expensive and easy to administer.

2.2. Data Analysis

Both descriptive and inferential statistical data analysis was performed. Data analysed descriptively using frequencies and percentage were mainly on socio-economic characteristics of respondents. Data analysed inferentially using binary logistic regression model showed the relationship between the determinants and access to funds. The analysis was done with the aid of IBM Statistical Package for Social Sciences (SPSS) version 20 and Microsoft Office Excel 2007. The binary logistic regression model was used because the dependent variable was measured as a dummy variable. Nine (9) factors were identified from literature to be more associated with access to funds for NGOs. These factors were: education level of staff, NGO networking, NGO size and coverage, NGOs capabilities and achievements, NGO – donor partnership, socio-economic enterprising, membership fees and nature of NGO services. The binary logistic regression model as developed by Hosmer and Lemeshow (1989) was specified as follows.

Where:

Y; is access to funds measured as a dummy variable i.e. NGOs had access to donation 1, and (0)

otherwise;
X1 = Education level of staff in NGOs measured by years of schooling;
X2 = Diversified networking effects of an NGO measured by number of beneficiaries’ connections;
X3 = Size and coverage of an NGO measured by number of beneficiaries served;
X4= Capabilities and achievements of an NGO measured by NGO had met the needs of   beneficiaries (1) and (0), otherwise;
X5 = NGO-beneficiary partnership measured by extent to which beneficiaries are involved in activities performed by NGOs in benefiting both parties;
X6 = Socio-economic enterprising (beneficiary involvement in income generation 1, 0 otherwise);
X7 = Membership fees (beneficiaries paying fees 1, 0 otherwise);
X8 = Nature of NGO involvement (enrolment targets based on donors’ focus and development goal aspects 1, 0 otherwise;
e = Error term;
= the intercept term of the model;
β0 = is the coefficient of the constant term;
β1 – βP = Regression coefficients;

3. RESULTS AND DISCUSSIONS

3.1. Respondents’ Profiles

The findings on the socio-demographic background are presented in Table 1 which shows that out of 48 respondents 56.3% and 43.7% were females and males respectively 18 to 75 years with a mean age was 37.3 years. It was also found that 50% were married and the rest were widows, widowers and singles. Almost all (97.9%) the respondents had secondary school to postgraduate level of education. The socio-demographic characteristics were considered appropriate to provide information required to answer the objective for the study as it comprised an active working group of the population.

3.2. Determinants of Funding Access for Non-Governmental Organisations

Binary logistic regression was used to determine the relationship between the selected determinants and access to funds as presented in Table 2. The results of the binary logistic regression revealed that, among eight (8) determinants, four determinants(education level of staff, size and coverage of an NGO, capabilities and achievements of an NGO and nature of involvement of an NGO) were found to be important predictors for access to funds for NGOs (p< 0.05). The strongest predictor was nature of NGO involvement (p = 0.000). The P-value was statistically significant showing that the model containing all predictors fitted well the data (x2 = 172.551, p = 0.000).  The findings in Table 2 indicate that the Hosmer and Lemeshow Test showed a Chi-square statistics of 172.551 (p = 0.550). The findings further show that Negelkerke R2 statistics which represents the adjusted Cox and Snell R2 statistics was 0.640 which implies that 64% of the variance in attitude of beneficiaries towards services delivered was explained by the independent variables that were entered in the model.

Table-1. Distribution of Socio-demographic Characteristics of the Respondents (n = 48)

Variable	Frequency	Percent (%)
Age 8 - 25 years	2	7.3
26 – 30 years	5	29.1
31 – 35 years	4	10.5
36 – 40 years	7	16.7
41 -  45 years	6	12.6
46 – 50 years	6	12.6
51 + years	5	11.2
Sex
Male	27	56.3
Female	21	43.7
Marital status
Married	24	50.0
Divorced/Separated	4	8.3
Widowed	6	12.5
Single	12	25.0
Living together	2	4.2
Education level
No formal education	1	2.1
Primary education	0	0
Secondary education	5	10.4
Diploma	19	39.6
Degree	18	37.5
Postgraduate Degree	5	10.4

Source: Compiled from the field data, 2015

Table-2. The estimated results of the binary logistic regression model

Variable		Coefficient (β)	Std. Error	Wald	Sig.	Exp (β)
Education level of staff	X1	.02141	.012	3.183*	0.010	0.92100
Diversified networking effects of an NGO	X2	-.00083	.008	0.010	0.260	-1.30077
Size and coverage of an NGO	X3	.01333	.011	1.469*	0.020	0.99736
Capabilities and achievements of an NGO	X4	.06833	.068	1.009*	0.040	0.83247
NGO-beneficiary partnership	X5	.00074	.005	0.021	0.360	0.96430
Venturing in socio-economic activities by NGOs	X6	.00099	.011	0.008	0.400	0.99317
Membership fees	X7	.00096	.005	0.036	0.180	0.77803
Nature of NGO involvement	X8	.04925	.022	5.011*	0.000	0.86219

Note: * Variables significant at 0.05, Omnibus Tests of Model Coefficients (Chi-square = 172.551; sig. = 0.000); Nagelkerke R Square = 0.640; Cox & Snell R Square = 0.520; Hosmer and Lemeshow Test (Chi-square= 19.896; sig. = 0.550)

3.3. Education Level of Staff and Access to Funds for NGOs

The relationship of education level of staff and access to funds for NGOs in Table 2 was found to be statistically significant (p = 0.010) and Exp (β) = 0.92100 which implies that the education level of staff is associated with increased probability of access to funds for NGOs. It was also indicated that if the education level of staff increased by one unit, access to funds for NGOs increased by 0.02141 units as indicated by the odds ratio that was 0.02141. This implies that staff with higher level of education (one unit higher) were 0.02141 times more likely to contribute to access to funds in their respective NGOs. These findings give emphasis to the importance of having trained and experienced personnel in order to increase access to funds for NGOs as they could competently manage the funding processes and beneficiaries in service delivery activities. During a Key informant interview with an NGO staff, it was emphasised that educated and experienced staff help NGOs to generate some expected results. This is because education provides them with fundraising skills and motivates them to work very hard. It was further indicated that education helps them to respond to the increasing complex issues regarding funds. During focus group discussion, it was reported that:

“You cannot make it if your NGO does not have educated staff in as far as funds is concern because they are in better positions to recognise and nurture a good relationships with donors and beneficiaries consistently” (Staff of an NGO working on orphanage care and support, 06th June 2016).

That quotation shows the relationship between education level of staff and access to funds in NGOs. This finding implies that there is a likelihood of NGOs with educated staff to access more funds than NGOs without educated staff. This study’s finding is supported by Omeri (2015) study on factors influencing financial sustainability of NGOs’ in Kenya in which the educated level of staff had a more significant relationship with NGOs’ funds access than any other factors. According to the author, other factors were diversity of funding sources and strategic financial planning.

3.4. Diversified Networks in NGOs and their Access to Funds

The relationship of diversified networking effects of an NGO and access to funds was found not to be statistically significant (p = 0.260) and Exp (β) = -1.30077 as shown in Table 2. This finding implies that diversified networking effect in NGOs was not a significant predictor of access to funds. It was also indicated that if networks in an NGO increased by one unit, access to funds for Non-Governmental Organisations decreased by -0.00083 units as indicated by the odds ratio that was -0.00083. This implies that diversified networks in an NGO one unit higher) were -0.00083 times less likely to contribute to their NGOs’ access to funds. These findings put emphasis on the importance of NGOs to have few but strong network connections in the process of accessing funds for NGOs. It can be argued that diversified network connections may prompt NGOs to lose focus on important donors. However, the negative beta coefficient on the factor diversified networks was a shocking finding. Initially, it was thought that having more connections within and across NGOs could help in appealing to multiple donors. This was not indicated the case because NGOs view networks as just resource centres while there are other important issues relating to access to funds for NGOs such as strong social capital, good leadership, joining learning and mutual beneficial partnership with donors.

Focus group discussions emphasised the importance of networks in NGOs. They emphasised that, networks help to share experience among NGOs and help to expose NGOs to local and foreign donors as one participant reported: 

“My NGO depends on networks with other NGOs as a new strategy for accessing funds. If my NGO was not in networks, it could have suffered from funds shortages. That is why it decided to network with other NGOs although the networks didn’t guarantee all what the NGO needed but at least it could give a way” (Staff of an NGO working on HIV/AIDS, 25th May 2016). 

The findings, however, disagree with findings by Owens and Burger (2007) who concluded that connected NGOs are more likely to access funds than those that are not connected.

3.5. Influence of Size and Coverage of an NGO on its Access to Funds

The relationship of size and coverage of an NGO and its access to funds was found to be statistically significant (p = 0 .020) and Exp (β) = 0.99736 influence on NGOs' access to funds as presented in Table 2. This implies that size and coverage of an NGO were big predictors of access to funds. It was also indicated that if size and coverage of an NGO increased by one unit, access to funds for Non-Governmental Organisations increased by 0.01333 units as indicated by the odds ratio that was 0.01333. This implies that NGOs covering a larger part of beneficiaries (one unit higher) were 0.01333 times more likely to access funds than those with smaller coverage. These findings underscore the importance of NGOs to reach as many beneficiaries as possible if they were to access funds from donors as donors are interested with the extent to which an NGO covered the intended beneficiaries. This was also emphasised during focus group discussions for example one participant reported that:

“…My NGO has some disappointing cases, it supposes to reach a number of beneficiaries due to its policies but it doesn’t because the fund it receives is unlikely to meet the increasing needs of beneficiaries” Staff of an NGO working on orphanage care and support, 06th June 2016.

These findings suggest that NGOs serving a large number of beneficiaries, their access to funds tend to increase than NGOs that have fewer ones. However, NGOs with large number of beneficiaries find hard to serve their beneficiaries because of the limited funds they get (Yunus, 2008; Lyne, 2012). These findings support the views of Trussel and Greenlee (2001) and Trussel (2002) who found that size and coverage of an NGO are major determinants of financial access for NGOs. Moreover, Trussel and Parsons (2007) concluded that size of an NGO is an institutional factor that reflects its reputation and should be considered when analysing NGO funding. Moreover, consistent findings are exhibited from Ruben and Schulpen (2008) who assessed the allocation of public funding by Dutch NGOs and concluded that NGOs with large number of beneficiaries have higher probability of being selected to receive funding compared to those with fewer ones. 

3.6. Capabilities and Achievements of an NGO and its Access to Funds

The relationship of capabilities and achievements of an NGO and its access to funds was found to be statistically significant (p = 0.040) and Exp (β) = 0.83247 as shown in Table 2. The study results imply that capabilities and achievements of an NGO was a significant predictor of access to funds for NGOs. It was also indicated that if capabilities and achievements of an NGO increased by one unit, access to funds for Non-Governmental Organisations increased by 0.06833 units as indicated by the odds ratio that was 0.06833. This implies that NGOs that have capabilities to deliver services to their beneficiaries and achieved to meet the needs of their beneficiaries (one unit higher) were 0.06833 times more likely to get more funds than those which are not. These findings underpin the importance of having NGOs that work to meet the needs of their beneficiaries. Focus group discussions also emphasised on capabilities and achievements of an NGO as one interviewee said:

“Simply, NGOs can access funds easily from donors if they have a good history on the provision of their services especially when their efforts are directed to serve the intended beneficiaries in fullness and not just needing funds for their own but a beneficiary community” (An official of an NGO working on education services, 24th May 2016).

Key informant interviews supported the findings on the capabilities and achievements of an NGO. For example one of the donor representatives emphasised that capabilities and achievements of an NGO are some of the hallmarks for access to donor funds for example one interviewee had this to say:

“Each fund is issued on the basis of an NGO’s ability and capability to manage it which is measured by its capabilities and achievements in its services delivery to its beneficiaries. These are some of the very important elements that satisfy donors to fund. We really want to see these [capabilities and achievements] in their proposals” (an interviewee from donor representatives, 30th May, 2016).

Moreover, an analysis on one of NGO donors, its evaluation report shows important key elements: capabilities and achievements. It was reported that:

Our donor has documented the concern about the organisation’s ability to deliver its service programmes. The primary focus was on capabilities and achievements. For sure, it should be well incorporated into the overall programme on how well the organisation has managed to deliver its services (NGO staff working on legal rights services, 23rd May, 2016).

The findings imply that donors are interested on how an NGO is capable to deliver intended services and how achieved it is from the services delivered to its beneficiaries. Similar findings were observed by Benerjee (2006) in the Netherlands who found that lack of NGO capacity to meet the growing needs of their beneficiaries in low-income countries is one of the main constraints to access of funds.

3.7. Nature of NGO Involvement on its Access to Funds

The relationship of nature of NGO involvement and its access to funds as shown in Table 2 was found to be statistically significant (p = 0.000) and Exp (β) = 0.86219 implying that nature of NGO involvement was a significant predictor of access to funds in NGOs. It was also indicated that nature of NGO involvement increased by one unit, access to funds in Non-Governmental Organisations increased by 0.04925 units as indicated by the odds ratio that was 0.04925. This implies that nature of NGO involving in donors’ focused aspects (one unit higher) were 0.04925 times more likely to get funds than NGOs whose focus and involvement are not donors’ priority. These findings underpin the importance of targeting groups that attract donors’ focus and attention. During focus group discussions it was emphasised that NGOs involving in donor priority aspects that are line with the common global problems have great influence on access to funds. The common global problems mentioned include poverty, gender and equality for all, vulnerability problems, capacity building and empowerment, environmental protection, health related issues etc. Similar observation is made by Fafchamps and Owens (2008) when studying NGOs in Uganda who found that nature of NGO involvement had a strong significant relationship with their funding in Uganda. Other studies (for example Kim et al. (2014)) also found that nature of NGO involvement is more likely to determine the access to funds for NGOs.

4. CONCLUSIONS AND RECOMMENDATIONS

This study aimed to analyse factors determining access to funds by NGOs and estimate the impact of the selected variables on access to funds for NGOs.  The study concludes that education level of staff and also size and coverage of an NGO have impacts on access to funds for NGOs. Furthermore, access to funds for NGOs is influenced by their capabilities and achievements in delivering services to beneficiaries. Moreover, the study concludes that nature of an NGO’s services especially those that reflect on development goal aspects, have impact on access to funds for NGOs.

The study recommends to NGOs that, although there may be other factors which may influence on their access to funds, they should put more focus on these factors as a major path for their access to funds. NGOs need more funds if they are to achieve their goals and have a meaningful opportunity to deliver adequate services to beneficiaries. In the view of conclusion that size and coverage of an NGO have an influence on access to funds, it is recommended that NGOs should increase significantly efforts to meet as many beneficiaries as possible so that they increase chances to access more funds. In order to reach many beneficiaries, NGOs should provide more training on services delivery to their staff which will ensure that staff has right and regular information regarding beneficiaries’ needs. Training on services delivery will help to equip them with knowledge and skills towards serving their beneficiaries.

It was concluded that education level of NGO staff has an influence on access to funds; therefore, NGOs should encourage their staff for education advancements such as going for more education. NGOs need more educated staff to qualify for funds competition since funds is a scarce resource. The study also concluded that capabilities and achievements of NGOs have influence on their access to funds; therefore, it is recommended that NGOs should have regular updated lists of activities and show clearly to what extent they have struggled towards achieving them. It was also concluded that nature of NGO involvement has influence on access to funds. The study recommends to NGOs to address the activity aspects that have donors’ focus and support. Such focus will continuously link NGOs with local and international donors.

Funding: This study received no specific financial support.

Competing Interests: The authors declare that they have no competing interests.

Contributors/Acknowledgement: Both authors contributed equally to the conception and design of the study.

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1. The total sample for the entire study was 348 respondents. The sample on which this paper is based include only respondents who were employees and representative of the surveyed NGOs