Effect of Climate Investment Funds on Financial Sustainability of Selected Non-Governmental Organisations in Kenya
DOI:
https://doi.org/10.53819/81018102t5423Abstract
Despite the global shift towards sustainable financing, green financing accounts for less than 10% of total NGO funding in Kenya, underscoring a significant gap in the adoption of environmentally aligned climate investment funds strategies. This study seeks to examine the effect of climate investment funds on the financial sustainability of registered project-based NGOs operating in Nairobi, Kenya, particularly those engaged in poverty alleviation and development. The study was anchored on the Theory of Change. Guided by a positivist philosophy and a descriptive research design, the study targeted 114 project-based NGOs headquartered in Nairobi, selected from the 161 listed by the National Council of NGOs, using Fisher’s (1983) formula to determine sample size. Data was collected using structured questionnaires. Pilot study was undertaken at Hope in Action Association-Kenya to ensure appropriatness of the data collection instruments. The correlation and regression analyses revealed that climate investment funds significantly influenced the financial sustainability of NGOs in Kenya. Climate investment funds showed moderately strong correlations with financial sustainability, emphasizing their role in diversifying income streams, enhancing resilience, and attracting donor confidence. Regression analysis confirmed that climate investment funds significantly impact NGO financial performance, explaining 33.2% of the variation. The study concludes climate investment funds significantly boost NGO sustainability in Kenya. Climate investment funds provide both financial and strategic opportunities, enabling NGOs to align with global sustainability agendas while improving operational efficiency. The study therefore recommends NGOs and policymakers to adopt comprehensive, diversified, and well-regulated climate investment funds to secure both financial resilience and environmental impact.
Keywords: Climate investment funds, financial sustainability, non-governmental organisations, Kenya.
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