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Does Revenue Diversification Predict Financial Vulnerability Among Non-governmental Organizations in sub-Saharan Africa?

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Abstract

Non-governmental organizations (NGOs) in sub-Saharan Africa (SSA) experience financial challenges that hinder efforts to promote social change and development. Revenue diversification is one adaptive response to these challenges, yet there is a lack of evidence concerning the relationship between revenue diversification and financial vulnerability among NGOs in SSA. Using data from an online survey of NGOs (N = 170), we hypothesized that a greater number of revenue sources is associated with lower probability of financial vulnerability, while a greater level of dependence on international funding is associated with higher probability of financial vulnerability. Results from probit regression models controlling for organizational characteristics indicated partial support for hypotheses. Having four or more types of revenue was associated with 87% lower probability of financial vulnerability compared to having one type of revenue (p < 0.001). Also, NGOs with up to half of their budgets covered by international sources had 17% lower probability of financial vulnerability compared to NGOs with no international funding (p < 0.05). Implications for future research to further explore these relationships are discussed.

Résumé

Les organismes non gouvernementaux (ONG) de l’Afrique du Sud du Sahara (ASS) éprouvent des difficultés financières qui entravent les initiatives favorisant les changements et le développement sociaux. La diversification des revenus est une des réponses adaptées à ces difficultés, mais trop peu de données sur la relation entre cette dernière et la vulnérabilité des ONG de l’ASS sont actuellement à disposition. À l’aide de données provenant d’un sondage auquel des ONG ont répondu en ligne (N = 170), nous avons supposé qu’un plus grand nombre de sources de revenus correspondrait à une moins grande vulnérabilité financière potentielle, tandis qu’une dépendance plus marquée envers les investissements mondiaux correspondrait à une vulnérabilité potentielle plus élevée. Les résultats des modèles de régression des probits de contrôle des caractéristiques organisationnelles ont partiellement appuyé ces hypothèses. Le fait de posséder 4 types de revenus ou plus était associé à une vulnérabilité financière de 87% moins probable comparativement à la possession d’un seul type de revenus (p < 0.001). Qui plus est, les ONG dont plus de la moitié du budget était assurée par des sources mondiales avaient une vulnérabilité financière de 17% moins probable que ceux démunis d’investissements mondiaux (p < 0.05). Nous discutons des implications futures de l’exploration plus approfondie desdites relations.

Zusammenfassung

Nichtregierungsorganisationen (NROs) in Subsahara-Afrika begegnen finanziellen Herausforderungen, die die Bemühungen zur Förderung des sozialen Wandels und der Entwicklung erschweren. Die Einkommensdiversifizierung ist eine adaptive Reaktion auf diese Herausforderungen; doch fehlt es an Beweisen hinsichtlich der Beziehung zwischen der Einkommendiversifizierung und der finanziellen Anfälligkeit der NROs in Subsahara-Afrika. Unter Verwendung von Daten aus einer Online-Befragung von NROs (N = 170) stellten wir die Hypothese auf, dass eine größere Anzahl von Einnahmequellen mit einer geringeren Wahrscheinlichkeit für eine finanzielle Anfälligkeit verbunden ist, während eine größere Abhängigkeit von internationalenen Finanzierungen mit einer erhöhten Wahrscheinlichkeit für eine finanzielle Anfälligkeit verbunden ist. Ergebnisse aus Probit-Regressionsmodellen, die die organisatorischen Kriterien kontrollierten, wiesen auf eine teilweise Unterstützung der Hypothesen hin. Das Vorhandensein von 4 oder mehr Einkommensarten zeigte eine um 87% verringerte Wahrscheinlichkeit für eine finanzielle Anfälligkeit im Vergleich zu einer einzigen Einkommensart (p < 0.001). Des Weiteren zeigte sich, dass die Wahrscheinlichkeit für eine finanzielle Anfälligkeit für NROs, deren Budget bis zur Hälfte von internationalen Quellen finanziert wurde, 17% geringer war im Vergleich zu NROs, die keine internationalen Finanzierungen erhielten (p < 0.05). Die Implikationen für zusätzliche Studien zur weiteren Erforschung dieser Beziehungen werden diskutiert.

Resumen

Las organizaciones no gubernamentales (NGO, por sus siglas en inglés) en el África Subsahariana (SSA, por sus siglas en inglés) experimentan retos financieros que dificultan sus esfuerzos para promover el cambio social y el desarrollo. La diversificación de ingresos es una respuesta adaptativa a dichos retos, sin embargo existe una falta de evidencia con respecto a la relación entre la diversificación de ingresos y la vulnerabilidad financiera entre las NGO en SSA. Utilizando datos de una encuesta online de NGO (N = 170), planteamos la hipótesis de que un mayor número de fuentes de ingresos está asociado a una menor probabilidad de vulnerabilidad financiera, mientras que un mayor nivel de dependencia de la financiación internacional está asociado a una mayor probabilidad de vulnerabilidad financiera. Los resultados de modelos de regresión probit que controlan las características organizativas indicaron un apoyo parcial a estas hipótesis. El tener cuatro o más tipos de ingresos estaba asociado a un 87% de menor probabilidad de vulnerabilidad financiera en comparación a tener un tipo de ingresos (p < 0.001). Asimismo, las NGO que tenían cubierta hasta la mitad de sus presupuestos con fuentes internacionales, tenían un 17% de menor probabilidad de vulnerabilidad financiera en comparación a las NGO sin financiación internacional (p < 0.05). Se tratan las implicaciones de futuras investigaciones para seguir explorando estas relaciones.

摘要

撒哈拉以南非洲地区(SSA)非政府组织(NGO)推动社会变革和发展的努力面临资金困境。收入多元化倒是应对困局的一种适应性策略,但是,关于收入多元化与撒哈拉以南非洲地区非政府组织财务脆弱性之间的联系尚缺乏有效证明。凭借(170家)非政府组织的在线调研数据,我们断定,多种收入来源可降低财务脆弱性,而较多依赖国际资金援助可增强财务脆弱性。针对各组织特征,采用概率单位回归分析模式得出的结果可在一定程度上对上述猜测加以佐证。相比只有一种收入(概率 < 0.001),拥有四种或更多种收入可将财务脆弱性降低87%。另外,多达半数预算依靠国际资金的非政府组织相比没有国际资金援助的非政府组织(概率 < 0.05),财务脆弱性可降低17%。这对今后深入研究二者关系有一定启示作用,对此,我们将在后文加以讨论。

ملخص

المنظمات الغير حكومية (NGOs) في أفريقيا جنوب الصحراء الكبرى (SSA) تعاني تحديات مالية التي تعوق الجهود الهادفة إلى تعزيز التغيير الاجتماعي والتنمية. تنويع مصادر الدخل هو أحد الردودعلى التكيف على هذه التحديات، لكن هناك عدم وجود أدلة بشأن العلاقة بين تنويع مصادر الدخل والضعف المالي بين المنظمات الغير حكومية (NGOs) في أفريقيا جنوب الصحراء الكبرى (SSA). بإستخدام بيانات من إستطلاع الرأي على الإنترنت للمنظمات الغير حكومية (NGOs)(N = 170)، نحن إفترضنا أن عدد أكبر من مصادر الدخل يرتبط مع إحتمال أقل للضعف المالي، في حين يرتبط مستوى أكبر من الإعتماد على التمويل الدولي مع إحتمال أكبر للضعف المالي. أشارت النتائج من النماذج الإحتمالية لإنحدار السيطرة على الخصائص التنظيمية للدعم الجزئي عن الفرضيات. ويعتبر أن أربعة أو أكثر من أنواع الإيرادات كان مرتبط مع إنخفاض إحتمال 87٪ للضعف المالي مقارنة إلى وجود نوع واحد من الإيرادات (p < 0.001). أيضا”، المنظمات الغيرحكومية (NGOs) مع ما يصل إلى نصف ميزانياتها يتم تغطيتها عن طريق مصادر دولية لديها إحتمال انخفاض 17٪ للضعف المالي بالمقارنة مع المنظمات الغير حكومية (NGOs) مع عدم وجود تمويل دولي(p < 0.05). تم مناقشة آثار للبحث في المستقبل لمواصلة إكتشاف هذه العلاقات.

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Notes

  1. NGO operating in countries of the Global South is a broad term to refer to countries in Africa, Latin America, and lower-resource regions of Asia and the Middle East, whereas the Global North is a broad term to refer to the USA, Canada, Western Europe, Australia, New Zealand, and higher-resource regions of Asia.

  2. These sources include bilateral (e.g., USAID and UK DFID) and multilateral (e.g., UNDP) aid agencies, foreign private foundations (e.g., Gates Foundation), and International NGOs (e.g., Oxfam), which provide grants or sub-awards to domestic NGOs. Collectively, these are sources of funding which originate from entities outside of the country in which the NGO operates.

  3. 2016/17 budgeted aid from DFID, see https://devtracker.dfid.gov.uk/; 2014 spending from USAID, see http://explorer.usaid.gov/.

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Acknowledgements

The authors would like to thank all of the NGO leaders who took the time out of their busy days and away from helping their communities to complete the survey, data from which is used in this study.

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  1. School of Social Work, University of Michigan, 1080 South University Avenue, Ann Arbor, MI, 48109, USA

    Mathieu R. Despard

  2. Linking the Youth of Nigeria Through Exchange, 1st Floor, 16 Ashimowu Street, New Garage, Bariga, Lagos, Nigeria

    Rhoda Nanre Nafziger-Mayegun

  3. School of Social Work, University of North Carolina at Chapel Hill, 325 Pittsboro Street, CB# 3550, Chapel Hill, NC, 27599-3550, USA

    Bernice Korkor Adjabeng & David Ansong

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Despard, M.R., Nafziger-Mayegun, R.N., Adjabeng, B.K. et al. Does Revenue Diversification Predict Financial Vulnerability Among Non-governmental Organizations in sub-Saharan Africa?. Voluntas 28, 2124–2144 (2017). https://doi.org/10.1007/s11266-017-9835-3

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