Corporate Governance and Financial sustainability in Civil Society Organisations in Uganda: A case of Selected CSOs in Kabarole district

Abstract

Between 2010-2015, a number of Civil Society Organizations (CSOs) in Kabarole including FORUD, RANNET, KIWED among others closed shop leaving many former employees and beneficiary communities stranded. Similarly, a number of CSOs have reduced operations and limited to less than five employees. The common problem is often limited finances for operation and meeting costs. The financial sustainability of the CSOs is a real challenge that calls for investigation hence the main factor that prompted this study. Is it related to corporate governance functions for non-profit establishments like CSOs? This study examined the relationship between corporate governance functions of boards, senior management and audit committees and the financial sustainability of CSOs in Kabarole district of Uganda. The study adopted a correlational research design was use. In this study, three selected CSOs namely Kaana Foundation, KRC and SATNET examined where 61 respondents returned the survey questionnaires representing a response rate of 69.3 percent. The data was analysed using regression analysis and correlation. Results indicated that there is a positive significant relationship between corporate governance functions of the board, functions of the senior management committees and audit committees and financial sustainability in CSOs in Kabarole District indicated as r=.701** and p=0.000; r=.701** and p=0.000 and r=.337* and p=0.000 respectively. Findings revealed that boards in CSOs in Kabarole District play a general rather than strategic function. It is thus recommended that corporate entities of CSOs for example boards should be selected based on expertise and skill so as to play a fundamental governance and strategic role for the financial sustainability of CSOs. Operating at the helm of corporate governance of CSOs, the boards should review and guide corporate strategy, objective setting, risk management and resourcing of the organizations in addition to general functions like reviewing annual plans, budgets and reports. Organizations should clarify on the strategic roles and responsibilities of senior management committees.