Strategic Fund Management Practices and Financial Sustainability of Social Economy Organizations in Kenya

Social-economy entities are dedicated to social objectives rather than profit maximization. Among them, Agricultural NGOs (A-NGOs) play a crucial role in promoting sustainable farming practices. However, due to the financial pressures during COVID19 pandemic, some A-NGOs succumbed, while others managed to sustain enhanced operations. Anchored on the resource based theory, the study sought to assess the effect of strategic fund management practices on financial sustainability of the A-NGOs during Covid19 pandemic. Data was obtained from forty-two(42) A-NGO’s that had fully or partially engaged in agricultural activities for at least one year preceding the COVID19 pandemic. Using a mixed method research design, the study examined the effect of strategic fund management(SFM) practices adopted by these entities on their financial sustainability. Regression output provided insights on the effect of strategic financial management practices including scenario planning, rolling forecasts, and cost control, suggesting statistical significance of the strategic fund management practices on the long-term financial sustainability. Specifically, the study found that A-NGOs that practiced scenario-based financial planning and rolling budget forecasts with regular reviews, in addition to the adherence to comprehensive cost control and other internal controls for risks mitigation were more sustainable. The study had substantial unexplained variance,implying that financial sustainability of A-NGOs is multidimensional, and requires an integrated fund management practices.