Economic Sustainability Challenges of Not-For-Profit Organizations

• Author(s): Anne Itotia ; Umar Lawal Aliyu
• Paper ID: 1705647
• Page: 1-21
• Published Date: 04-04-2024
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 7 Issue 10 April-2024

Abstract

The Kenyan laws consider different business models, such as for-profit or not-for-profit (NPO). While for-profit businesses are well articulated in the Companies Act (2015), there is no clear legislation that governs NPOs. However, they are recognized as Corporations, Societies, Trusts and non-governmental organizations (NGOs), which is to become the Public-Benefit Organization (PBO) when ACT 2013 is implemented. Among the NPOs are the faith-based organizations (FBOs), which have a social mission but belong to different faith groups. Legislatively, these FBOs are categorized under the Trustee (Perpetual Succession) Act, Cap 164, if they are incorporated, and grouped under Societies (Societies Act, Cap. 108). Recently, these FBOs faced numerous economic challenges worsened by the emergence of COVID-19. They suffered substantial financial blow due to funding constraints and dwindling resources that strained them in responding to the "new COVID-19 poor." The concern for Leadership was the mission's sustainability and how their projects would remain credible as NPOs. The study, therefore, explored the challenges faced by FBOs and examined the significance of Leadership in economic sustainability. It questioned whether envisioning Leadership would facilitate governance to improve resource mobilization and wondered which leadership model would best suit its Mission sustainability. By adopting a qualitative constructionism grounded theory (CGT) approach, 'interpretivism,' the study focused on the subjective view of reality to explore the phenomenon of the Missions' economic sustainability. The results establish that some donor communities seem to have changed their priorities while others have yet to resume funding obligations. Therefore, Leadership is paramount, with an emphasis on 'Leadership for the Mission' sustainability; however, envisioning Leadership is an ongoing process. As a result, three leadership models emerge stewardship, compassion, and servanthood through the co-construction process of a new leadership theory: Stewardship in Compassionate Leadership for the Mission (SCLM). The theory is internally valid and enhances the application of good governance and collaborative partnership anchored on core values that build trust, credibility, transparency, and timeliness for the economic sustainability of FBOs. The study recommends more systematic research to advance the understanding of FBO Leadership and sustainability while creating awareness of FBOs' contribution to a country's Gross National Product (GNP). For day-to-day management, the Leadership of FBOs must redress governance structures and strategies to improve communication and creatively use documentaries to enhance collaboration with various stakeholders.

Keywords

Charism, Charitable Trust, Constructionist Grounded Theory, COVID-19, Faith-Based Organizations, Leadership, Marginalized, Non-Profit, Sustainability

Citations

IRE Journals:
Anne Itotia , Umar Lawal Aliyu "Economic Sustainability Challenges of Not-For-Profit Organizations" Iconic Research And Engineering Journals Volume 7 Issue 10 2024 Page 1-21

IEEE:
Anne Itotia , Umar Lawal Aliyu "Economic Sustainability Challenges of Not-For-Profit Organizations" Iconic Research And Engineering Journals, 7(10)