Financial Management Practices, Financial Environment Regulation and Resource Mobilization by Non-Governmental Organizations in Kenya
Keywords:
Resource Mobilization, Investment Management, Risk Management Practices, Financial environment regulationAbstract
The study examined effect of financial management practices that included risk management and investment management on resource mobilization among non-governmental organizations (NGOs) in Kenya, with particular attention to the moderating role of financial environment regulation. Despite growing donor volatility and regulatory pressure, little empirical evidence explains how financial practices influence NGOs’ resource mobilization. Guided by a positivist philosophy and an explanatory research design, the study collected primary data using structured questionnaires administered to senior personnel across 299 NGOs. Data was analyzed using SPSS. Findings showed that risk management practices were strongly and positively associated with resource mobilization (r = 0.525, p < 0.01) and had a significant positive effect in the regression model (β = 0.449, p < 0.001). Investment management also demonstrated a positive correlation with resource mobilization (r = 0.403, p < 0.01) and a significantly positive effect (β = 0.283, p < 0.001). Combined, the two practices explained
35.0% of the variance in resource mobilization (R² = 0.350). Moderation analysis revealed that financial environment regulation significantly weakened the relationship between investment management and resource mobilization (β = −0.145, p = 0.044), while its moderating effect on risk management was not statistically significant. The study contributes to nonprofit financial management literature by empirically demonstrating the centrality of risk and investment management in strengthening resource mobilization. Practically, the results underscore the need for NGOs to institutionalize robust risk systems and disciplined investment practices. Policymakers should design regulatory frameworks that enhance accountability without constraining NGOs’ financial sustainability.
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