Financial sustainability is the ability of organizations to develop a diverse resource base. In Kenya, the number of NGOs has been increasing yearly; most of them depend on foreign donations. Therefore, the study sought to establish the relationship between donor funding and financial sustainability of non-governmental organizations in Uasin Gishu County, Kenya. Based on the study, this paper explores the influence of sources of funding on the financial sustainability of NGOs. Correlation research design was used as the principal research methodology for the study. The target population was 146 NGOs that were actively engaged in development projects in Uasin Gishu County. The respondents were NGO management and volunteers. Stratified sampling technique was used to identify non-governmental organizations to participate in the study. A sample size of 60 respondents was selected using Nassiuma’s 2000 model. Data collected was analysed using descriptive and inferential statistics. Test re-test was done to establish the reliability of instruments results; 95% level of significance was used to test the hypothesis. The findings of the study showed that there was a positive correlation between donor funding and financial sustainability of the NGO’s in Uasin Gishu County. Improved financial sustainability could be achieved as a result of diversifying sources of funds, retaining qualified staff and improving governance practices and organizational capacity. Therefore, it was recommended that NGOs should limit over-dependence on donor funds and indeed focus on establishing income generating activities and venture into multiple sources of funds for their projects; this would improve their financial sustainability.
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