Private universities have a great responsibility of managing financial sustainability and hence the need to explore different strategies that would enhance their financial sustainability. Kenya Vision 2030 requires institutions to develop strategies that will help in achieving its goals. Therefore, this paper explores the strategies administrators in private universities use to manage financial stability. Three major strategies were adopted by selected private universities to enhance their financial sustainability. These strategies include students’ recruitment strategies, internal and external funding strategies and program development, review and diversification. Ludwig Von Bertalanffy’s General System Theory (GST) originally developed in the 1940’s – which later came to be known as System Theory – was the conceptual framework that guided this study. Qualitative grounded theory design was used for collecting, analyzing, interpreting and reporting data. An interview guide was used to collect data for the two research questions that guided the study. Data was collected using self-developed interview schedule, and were digitally recorded and transcribed. The data was then organized manually and analyzed qualitatively through use of codes and formation of categories which eventually developed broader and tentative themes and patterns that brought meaning out of the information collected. Twenty respondents of this study were chosen purposefully from four out of the five universities in Kenya founded as theological colleges and had been chartered as private universities at the time of the study. Triangulation was used for data collection to increase the trustworthiness of the findings. The findings of this study indicate that the strategies that were put in place were not yielding sufficient income because of the many internal and external challenges being faced by these universities. Therefore this study recommends ways of developing, reviewing and diversifying revenue streams (input activities) that will generate adequate income to overcome the challenges in the system that are major impediments to implementation of activities (output) that would lead to establishment of a financial sustainable university.
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