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Sustainability in the NGO sector- Using USAID as a case study

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Sustainability in the NGO sector- Using USAID as a case study
ABSTRACT

Sustainability has escalated to a critical issue in the development sector, especially

with the recent withdrawal of USAID funding and the reduction of UKAID support
for NGOs in Nigeria. The heavy reliance on foreign aid has sparked serious
concerns about the long-term viability of NGO-led projects and their ability to
sustain impact once donor funding ceases. These funding cuts have thrust NGOs
into immediate operational challenges, risking project discontinuation and
undermining their missions.

This study provides a comprehensive review of existing research on the

sustainability challenges facing NGOs, explicitly focusing on the effect of USAID’s
withdrawal of funding and how it affects sustainability. It examines the structural
vulnerabilities that make NGOs dependent on donor funding and explores USAID’s
policies and frameworks related to sustainability. This study analyses innovative
financial models such as social enterprises, impact investments, and corporate
partnerships to identify strategies to ensure NGO sustainability. It also explores the
underlying causes of foreign aid withdrawal and assesses the key challenges
NGOs face in achieving long-term financial stability. Notably, the study offers
practical recommendations for NGOs in Nigeria. The research further provides
alternative funding options NGOs can adopt to achieve economic independence
beyond donor dependency.
INTRODUCTION

The growing social and economic challenges in Nigeria cannot be addressed

solely by the government. While the government plays a crucial role in policy
formulation and implementation, its capacity to single-handedly resolve the
country’s numerous developmental issues has proven insufficient.1 Limited
financial resources, bureaucratic inefficiencies, and competing national priorities
often hinder the government’s ability to provide essential services and
development programs at the scale required to meet the needs of Nigeria’s
rapidly growing population2

In response to these gaps, non-governmental organisations (NGOs) have

emerged as key players playing a crucial role in addressing Nigeria's social,
economic, and environmental challenges. They are formed to complement,
supplement and offer alternatives to government development efforts. Their
significant contributions to national development by tackling critical issues such
as poverty alleviation, women’s empowerment, healthcare, education, disaster
relief, democracy, and good governance cannot be overstated. NGOs often
reach marginalized communities that governmental programs may overlook,
thereby improving the overall quality of life for many Nigerians.

As the Third Sector of government, NGOs are essential to societal development,

highlighting the critical need for sustainable strategies to ensure their long-term
impact and effectiveness. Non-governmental organisations (NGOs) no doubt
play a crucial role in national development, particularly in developing countries
where social issues are widespread and government accountability is often
lacking, especially for those at the grassroots level. They have emerged as key
players in addressing these gaps, positioning themselves as essential in tackling

1
Felix, A. (2011, June). Bridging the Gap between Non-State Actors and the State in
Governance. International Journal of Development and Management Review (INJODEMAR)
Vol. 6 June, 2011, Vol. 6(3), 62-63. https://www.ajol.info/index.php/ijdmr/article/view/66984
2
Eze, R. M. (2023). The Role Of Non-Governmental Organizations In The Development Of Nigeria.
Journal Of Social Theory And Research, Vol 3. Issues 2 Retrieved From
Https://Publications.Jostar.Org.Ng/Role-Non-Governmental-Organizations-Development-Nigeria
governments' shortcomings. Despite all the good works of NGOs, research
shows that there are few success stories in terms of maintaining sustainability
generally for NGOs in the development sector3 The majority of the NGOs
typically require support to sustain themselves, but often are unable to survive
longer4

Sustainability in the NGO sector refers to the ability of non-governmental

organisations to maintain their operations and impact over time, particularly in
international development. Given the extensive scope of their work, NGOs
require substantial financial resources to implement their programs effectively
while maintaining independence from government interference. However, most
NGOs rely heavily on donor funding to sustain their activities. In a research
carried out by The Bridgespan Group, out of 33 NGOs across three countries
(Nigeria, Kenya and South Africa), over 90 per cent of funding came from a
combination of international philanthropy and official development assistance
(ODA) from bilateral or multilateral government sources in roughly equal parts5

This dependency on external funding creates two primary challenges. First,

donors often dictate the nature and scope of projects, as NGOs must align their
initiatives with donor priorities to secure funding6. This limitation restricts the
autonomy of NGOs in designing interventions that directly reflect local needs.
Second, the reliance on donor funding raises significant concerns about
sustainability. Donors typically provide funds for fixed-term projects, leading to
uncertainties about the continuity of programs once funding cycles end.7 This
raises critical questions: What happens to these projects after donor funding

3
Masefield, S. C., Masefield, S. C., Megaw, A., Barlow, M., Barlow, M., White, P. C. L., White, P. C. L.,
Altink,H., Altink, H., Grugel, J., & Grugel, J. (2020). Repurposing NGO data for better research
outcomes:A scoping review of the use and secondary analysis of NGO data in health policy and
systems research. Health Research Policy and Systems, 18(1), 1–22.
https://doi.org/10.1186/s12961-020- 00577-x
4
Tortajada, C. (2016). Nongovernmental organizations and Influence on global public policy. Asia and
the Pacific Policy Studies, 3(2), 266–274. https://doi.org/10.1002/app5.134
5
Standish-White, Julia. “How African NGOs Grow.” Bridgespan, 20 June 2024,
www.bridgespan.org/insights/how-african-ngos-grow. Accessed 29 Mar. 2025.
6
Bebbington, A. J., Hickey, S., & Mitlin, D. C. (2008). Can NGOs Make a Difference? The Challenge
of Development Alternatives. Zed Books. https://biblio.flacsoandes.edu.ec/libros/digital/52467.pdf
7
Banks, N., Hulme, D., & Edwards, M. (2015). NGOs, States, and Donors Revisited: Still Too Close
for Comfort? World Development, 66, 707-718. https://doi.org/10.1016/j.worlddev.2014.09.028
ceases? What is the fate of the beneficiaries who depend on these
interventions? The halt in foreign aid could delay critical healthcare programs,
putting vulnerable populations at greater risk.

African economies, including Nigeria, have consistently relied on foreign aid to

finance critical aspects of their budgets, infrastructure projects, and social
development initiatives. For Nigeria, the United States has been one of the
largest and most reliable sources of foreign aid, with the country receiving $1.02
billion in 2023, making it the seventh-largest recipient of U.S. foreign assistance.
The United States aid has played a key role in sectors such as healthcare,
education, governance, infrastructure, humanitarian relief, and economic
growth.8

Existing Gap Not Identified In Previous Research

While existing research showcases how USAID directly led initiatives such as the
EDGE fund and some of its internal operations are sustainably driven, limited
research exists on how USAID funding mechanisms and requirements from
NGOs funded actively foster long-term sustainability beyond financial support.
Most research has failed to address the question: Is USAID truly driving systemic
changes through the NGOs it funds or just a charity agent?

Our review of existing literature on the sustainability of NGOs also reveals a lack
of recent and updated research publications on USAID funding and its
sustainability approach.

SOURCES OF FUNDING OF NGOS IN NIGERIA

NGOs (Non-Governmental Organizations) require funding to achieve their goals

and objectives, which typically revolve around social development,

8
Adewale, B. (2025, January 28). Us Foreign Aid Withdrawal & Nigeria’s Economy - Parthian
Partners. Parthian Partners. Retrieved from
https://parthianpartnersng.com/the-implications-of-the-90-days-withdrawal-of-us-foreign-aid-to-nigeria/
humanitarian aid, environmental protection, healthcare, education, and other
causes. The primary sources of funding for NGOs in Nigeria are

a. Grants
b. Donations9
c. International and Development Agencies10
d. Social Enterprise
e. Partnerships & Collaborations
f. Crowdfunding & Online Fundraising11

Regardless of these options, in a research carried out by The Bridgespan Group,

out of 33 NGOs across three countries (Nigeria, Kenya and South Africa), over 90
per cent of funding came from a combination of international philanthropy and
official development assistance (ODA) from bilateral or multilateral government
sources in roughly equal parts.12

In 2022, Africa was recorded to consistently be the largest recipient of FCDO

region-specific ODA with a share of 42.9 per cent in 2022 and the largest
recipient of non-FCDO region-specific ODA at 38.2 per cent. It is recorded that
Nigeria was the third largest recipient of bilateral ODA, receiving the sum of £110
million. In the same year, Nigeria was ranked 3rd in the regional rank of
countries USAID offered foreign assistance to receive $789,179,031.

In 2023, the European Union donated the sum of €47.4 million as foreign aid to
Nigeria, with the number increasing subsequently to €48.7 million in 202413

These statistics show that NGOs in Nigeria receive much financial assistance,
leading to their utmost reliance.

9
Lewis, D. (2016). Non-Governmental Organizations Definitions, and History. Retrieved from:
https://www.researchgate.net/publication.
10
Clark, J. (1991). Democratizing Development: The Role of Voluntary Organizations. London:
Earthscan.
11
NGO Funding Solutions. (2023, March 7). Sources of Funds for NGO - NGO Funding. NGO
Funding. https://ngofundings.org/uncategorized/sources-of-funds-for-ngo/
12
Standish-White, Julia. “How African NGOs Grow.” Bridgespan, 20 June 2024,
www.bridgespan.org/insights/how-african-ngos-grow. Accessed 29 Mar. 2025.
13
Nigeria. (2025). European Civil Protection and Humanitarian Aid Operations.
https://civil-protection-humanitarian-aid.ec.europa.eu/where/africa/nigeria_en#facts--figures
The problem is not receiving foreign aid; the main issue is the utmost reliance on
it without having other financial options. The consequence of utmost reliability is
that NGOs have to succumb to the dictates of the donor most of the time. Donor
interest focuses predominantly on non-governmental organisations (NGOs),
which are established to pursue goals akin to those of donors.
TYPES OF FOREIGN AID FINANCING

The International development system includes multilateral institutions such as

the World Bank, the European Union and the United Nations, and bilateral
donors such as the UK Department for International Development (DFID) or the
United States Agency for International Development (USAID)

The mainstream categorisation of foreign aid financing for NGOs is

1.​ Bilateral and Multilateral Aid

Bilateral and multilateral aid have been the most significant funding sources in
the NGO world. These funds come either from the foreign offices of developed
countries or from the multilateral organizations set up by different countries.
Examples of these are the United Nations, the World Bank, and the Asian
Development Bank.

Bilateral aid refers to assisting one country to another. It is often used

strategically to influence the recipient's policies or actions in alignment with the
donor's preferences.

Multilateral aid refers to financial assistance from multiple countries or

international organisations to support development projects in recipient states.
THE CONCEPT OF NON-GOVERNMENTAL ORGANISATIONS

The World Bank(2001) states that NGOs refer to organisations that are not based
on the government and are not created to earn profit.14

The world of NGOs contains a bewildering variety of labels. While the term
"NGO" is widely used, many other overlapping terms are also used, such as
"non-profit," "voluntary," and "civil society" organisations.

The term "non-governmental organisation" refers to organisations not based on

the government and not created to earn or make a profit. According to the
World Bank, the diversity of NGOs strains any simple definition.

As can be seen, it contributes to national development in terms of democracy

and good governance, poverty alleviation, women empowerment, primary
health care (sexually transmitted diseases, acquired immune deficiency
syndrome) and other health-related matters, education and functional literacy,
development of the girl child, environment, conflict resolution, drugs abuse, and
human rights15

The work undertaken by NGOs is wide-ranging, but NGOs' roles can be usefully
analysed as having three main components: implementer, catalyst, and partner16
The implementer's role involves mobilising resources to provide goods and
services to people who need them. NGOs deliver services across various fields,
such as healthcare, microfinance, agricultural extension, emergency relief, and
human rights. This role has become more prominent as NGOs increasingly
respond to artificial emergencies or natural disasters with humanitarian
assistance. The catalyst can be defined as an NGO's ability to inspire, facilitate,
or contribute to improved thinking and action to promote social transformation.

14
World Bank, (2001).World Development Report; Oxford Universities Press.
15
Akpanudoedehe, J. J. (2006). Non-Governmental Organizations (NGOs) and rural transformation in
Nigeria: A case Study of Community partners for development (CPD) in Uyo Benue State, Nigeria.
Unpublished M.Sc Thesis. University of Calabar, Nigeria.
16
Lewis, D. (2007). The management of non-governmental development organizations (2nd ed.).
London: Routledge.
THE NEED FOR SUSTAINABILITY IN NGOS

The United Nations Brundtland Commission defined sustainability as “meeting

the needs of the present without compromising the ability of future generations
to meet their own needs.”17

Sustainability refers to the continuous flow of benefits generated from a project

even after external support has ceased. As such, the sustainability of an NGO
should be seen as an ongoing process rather than an end in itself.

An NGO's sustainability means surviving so that the NGO can continue to serve
its constituency and fulfil its commitments to the community within which it
operates. A sustainable (I)NGO can continue to fulfil its mission over time and, in
doing so, meet the needs of its key stakeholders – particularly its beneficiaries
and supporters. This is because meeting the needs of the people in the present
generation is essential to sustain the needs of future generations. 18

Sustainability, especially as it relates to non-governmental organisations, refers

to the ability of managers and team members to proffer interventions and
execute projects that outlive the organisation, regardless of funding challenges,
leadership, or institutional changes. Contextualising this about USAID and NGOs,
sustainability means the ability of organisations funded by USAID to remain
autonomous long after donor funding ends or comes to a halt.

It is commonly agreed that NGOs emerged to meet unmet needs or as a

response to unmet social needs19 Many NGOs did not start as development
agencies at all. They were often drawn to developments by first providing relief
in emergencies and by coming to realize that in developing countries, relief was
not enough.20 Additionally, the reliance on project-based funding often results in

17
Brundtland, G. H., & Commission mondiale sur l'environnement et le développement.
(2005). Notre avenir à tous. Éditions Lambda.
18
International Journal of Business & Entrepreneurship Research
ISSN: 2360-989X, Volume 13, Issue 6, (October, 2022) pages 138-152
19
Rath, N. (2019). Sociology of Development. Vani Vihar: Utkal University Press.
20
McGann, J., & Johnstone, M. (2006). The Power Shift and the NGO Credibility Crisis: Global
Policy Forum. Retrieved from https://www.globalpolicy.org.com.
a cycle of short-term initiatives that do not allow for sustained impact or
long-term planning21

NGO projects are not permanent interventions; they have specified end dates.
Consequently, donors aim to gradually reduce support at the project level for
various aspects when providing funding.22 This is primarily done to ensure the
long-term sustainability of their projects or programs. Additionally, a
comprehensive evaluation of exit strategies in aid programs by multiple donors
revealed that planning for a proper exit and sustainability is more of an
exception than a rule (Heldgaar, 2008)

Many economists worldwide have seen that financing the development of small
NGO projects and encouraging their establishment is one of the most important
tributaries of economic and social development in countries in general and
developing countries in the third world in particular (Smillie, Helmich, Randel,
and German, 2013).

Usually, NGOs mobilise resources at home and abroad to work directly with and
improve the lot of poor, marginalised and otherwise disadvantaged segments of
the population who are the ultimate focus of the aid system. 23
However, the sustainability of these NGOs has long been an issue of discussion
following the increase in shutdowns of NGOs around the world due to various
factors, including a drastic reduction of public aid inflow and financial resources,
insufficient funding, bureaucracy, mismanagement, a lack of a clearly defined
mission, and more.

To say the least, the United States' 47th President, Donald Trump, putting a halt
on foreign assistance as part of his “America first” policies is not helping matters,
given that a survey of 246 humanitarian organisations reveals that Aid groups
21
Funding challenges faced by Nigerian NGOs. (n.d.). NIGERIAN NGO. Retrieved March 24, 2025,
from https://www.nigerianngo.com/blog/funding-challenges-faced-by-nigerian-ngos
22
Chukri A., Nazareth N., & Mona K. (2024). Sustainability Determinants of NGO Projects in Lebanon.
In Global Journal of Research in Business Management (Vol. 4, Number 5, pp. 20–30).
23
Fowler, A. (1995, August 23). Strengthening the role of voluntary development organizations: Policy
issues facing official aid agencies. Strengthening Financing for the Voluntary Sector in Development:
the Role of Official Development Assistance, Pocantico Hills, New York,.
across the world have closed operations, laid off staff and halted life-saving
work, including those working with malnourished children. 24

Questioning the independence of NGOs, Hussaini and Yinalabi, in their article,

stated that the projection of NGOs as “independent” organisations is a
non-existent truth since most NGOs are highly dependent on donor funding,
with around 85-90% of their incomes from funding. As such, they risk collapse
without the continued support of the donor's fund. 25

Albert further posits that while the withdrawal of aid and dwindling donor
resources has been approached with a Positive mindset - with organisations
claiming it has created opportunities for reflection and encouraged them to
explore alternative funding sources such as social entrepreneurship, social
media marketing, and partnerships with private institutions - the truth, however,
is that despite this optimistic outlook, NGOs have consistently articulated how
the uncertainty of revenue mobilisation significantly affects their expected roles
in advocacy, service provision, and facilitation within the context of the
Sustainable Development Goals.26

Using NGOs based in Tanzania as a case study,27 Kereri and Pascal brought
about a different approach by narrowing funding sources internally and
externally. They attributed most challenges accessing external funding to
stringent donor requirements and competition among excessive documentation
in solicited proposal requirements. On the other hand, many organisations linked

24
Mcpherson, P., Stecklow, S., & Paravicini, G. (2025, February 19). U.S. aid freeze 'decimates'
life-saving work globally, survey finds. reuters.com. Retrieved March 24, 2025, from
https://www.reuters.com/world/us/us-aid-freeze-decimates-life-saving-work-globally-survey-finds-2025
-02-19/
25
Hussaini, M.L. Yinalabi, A.J. (2020) Non governmental organizations (NGOs) and the decline of
state intervention in Nigeria’s development. International Journal of Management, Social Sciences,
Peace and Conflict Studies (IJMSSPCS),
26
Albert, A. (2016). Advancing post-2015 Sustainable Development Goals in a changing
development landscape: Challenges of NGOs in Ghana, Development in Practice, 26:5, 555-568,
DOI: 10.1080/09614524.2016.1189513
27
Kereri, E. Pascal M. (2024) Determinants of Financial Sustainability for Local Non-Governmental
Organisations in Arusha, Tanzania. NG Journal of Social Development.
difficulties in securing internal financing to policy restrictions. Regardless of
whether the challenge stemmed from internal or external sources, Mina posited
that a significant threat to the sustainability of most NGOs in Tanzania is their
heavy reliance on external donors, who remain the primary funding source and
exert considerable influence over NGOs’ financial sustainability.

USAID’s Approach to Sustainability.

USAID has demonstrated a comprehensive approach to sustainability

encompassing environmental, economic, and social inclusion, from the Agency
Sustainability Plan Initiative to the EDGE Fund, the Feed the Future Initiative, and
the Clean Air Catalyst. This ensures that both its internal operations and external
programs are designed to facilitate long-term progress.

To promote economic sustainability, USAID has recognised the private sector as

an indispensable asset in achieving its mission. The private sector has played a
critical role in driving sustainability through partnerships, shared resources and
responsibilities, and the integration of efficient business models that enhance
NGO operations.

Additionally, the execution of various social entrepreneurial activities has

contributed to income generation, reinforcing long-term viability in every
aspect. From shared resources responsibilities to bringing on board efficient
business models that help improve and optimise NGO operations to execution
of various social entrepreneurial activities leading to income generation, the
private sector has proven to ensure sustainability in every sense of the way, and
this is evident in her 2022 fiscal year result wherein USAID engaged 3,000
private sector partners globally. It resulted in over 800 new partnerships.28

28
Mcpherson, P., Stecklow, S., & Giulia Paravicini. (2025, February 19). U.S. aid freeze “decimates”
life-saving work globally, survey finds. Reuters.
https://www.reuters.com/world/us/us-aid-freeze-decimates-life-saving-work-globally-survey-finds-2025
-02-19/
To add, the Feed the Future Initiative by USAID has partnered with more than 50
US companies (including several Fortune 500 firms) to align corporate social
responsibility (CSR), environmental, social, and governance (ESG) strategies, and
core business efforts toward combating hunger and poverty.

Through its internal activities, USAID has demonstrated a significant

commitment to environmental sustainability by downsizing its office space and
transitioning to the Leadership in Energy and Environmental Design (LEED), the
commonly used and certified sustainable green building under the United
States Green Building Council, ensuring sustainability in terms of energy, water
and environmental impact.

Within 2 years, USAID reduced its domestic facilities floor space by about 38%
and aimed to ensure that by 2025, 100% of its domestic headquarters will be
LEED Gold or Silver certified. Achieving this will lead to low-cost maintenance
because the fewer the facilities and office space to maintain, the lower the cost
of running and maintaining them. However, it also contributes towards
environmental sustainability by reducing carbon emissions and energy usage.29
Towards ensuring community resilience, the United States Agency for
International Development (USAID) partnered with local partners to implement
the Amalima Loko food security project (2021 – 2025) in Matabeleland,
Zimbabwe and through various integrated approaches (a community
participation and ownership approach engaging local stakeholders in planning
and implementation, and using a gender-sensitive approach that recognises the
critical role of women in community resilience) which has yielded sustainable
development practices.30

29
USAID. (2022, April 13). Doing Our Part - U.S. Agency for International Development - Medium.
Medium; U.S. Agency for International Development.
https://medium.com/usaid-2030/doing-our-part-54ac6204a32
30
Jingani, S. (2024) Enhancing community resilience through sustainable development
practice.University of South-Eastern Norway USN School of Business, Department of Business and IT
Challenges

The sustainability of non-governmental organizations (NGOs) in Nigeria is

increasingly challenged by a complex interplay of internal and external factors,
which significantly impede their capacity to foster sustainable development. As
a crucial component of Nigeria's civil society, NGOs operate in a landscape
shaped by historical contexts, notably the legacy of military rule and
subsequent democratic governance that has both enabled and constrained
their activities. Despite their potential to enhance civic engagement and
influence public policy, NGOs face critical challenges, including inadequate
funding, corruption, accountability issues, and a lack of trained personnel, all of
which hinder their effectiveness and long-term viability. The reliance on
project-based funding leads to short-term initiatives that lack sustained impact
and can jeopardize the continuity of essential services in various sectors,
including education and healthcare
Corruption is another significant barrier, deeply embedded in the socio-political
fabric of Nigeria. Nigeria is ranked 140th out of 180 countries in Transparency
31
International's 2024 Corruption Perception Index. systemic corruption
undermines not only the operational integrity of NGOs but also the
government's commitment to supporting civil society initiatives32
Furthermore, these challenges are compounded by societal issues such as
limited access to markets and cultural barriers, which restrict NGOs' abilities to
effectively engage communities and implement meaningful development
projects33

31
2024 Corruption Perceptions Index - Explore Nigeria’s results. (2025, February 11).
Transparency.org. https://www.transparency.org/en/cpi/2024/index/nga
32
Mikeladze, A. (2021). Financial Management Role for NGOs. European Journal of Economics and
Business Studies, 7(1), 144. https://doi.org/10.26417/594yih63y
33
Abioro, Matthew & Olatoye, A & Onadeko, & Olabisi, Jayeola & Solaja, Oluwasegun. (2020). Public
Policy, Administration and Non-Governmental Organizations' Effectiveness in Nigeria. 6. 39-51.
These challenges stem from both internal organizational issues and external
factors affecting the broader socio-political landscape.

1.​ Funding Constraints

One of the most pervasive challenges is the lack of adequate funding. Many
NGOs struggle with limited access to grant funds, private donations, and
government backing, which significantly hampers their operational capabilities.
Bromideh (2011) argued that
NGOs in developing countries “generally suffer from a lack of resources (in
particular administration and expertise), to gain the trust of others, fundraising,
and not being recognized among the donors” .34 Most NGOs struggle to secure
sufficient and consistent funding to carry out their work. Finding donors is
challenging, and meeting specific donor requirements can be difficult.
Additionally, many NGOs rely heavily on donor funding, making them vulnerable
to changes in donor priorities and conditions.35
2.​ Corruption and Accountability Issues
Corruption remains a critical barrier to achieving the Sustainable Development
Goals (SDGs) in Nigeria. Nigeria is ranked 140th out of 180 countries in
Transparency International's 2024 Corruption Perception Index 36 highlighting the
extent of this issue. Political analyst Professor Eghosa Osaghae described
corruption as “the silent killer of sustainable development,” indicating how it
undermines progress.37 Furthermore, NGOs themselves have faced scrutiny
regarding their accountability, particularly concerning the management of donor
funds. The introduction of the Companies and Allied Matters Act (CAMA) 2020,
which mandates detailed annual reporting by NGOs, has sparked a debate on

34
Bromiden, A.A. (2011). The Widespread Challenges of NGOs in Developing Countries: Case
Studies from Iran. International NGO Journal vol. 6 (9), pp.197 – 202.
35
Alonso, N. (2017). Challenges Faced by NGOs. Retrieved from: https://atlascorp.org>challenges.fa.
36
2024 Corruption Perceptions Index - Explore Nigeria’s results. (2025, February 11).
Transparency.org. https://www.transparency.org/en/cpi/2024/index/nga
37
Bulangis, N. (2024, October 8). The influence of Sustainable Development Goals (SDGs) and NGO
reforms in Nigeria: Effects, advancements, and obstacles. CARRHURE; Carrhure Consulting.
https://carrhure.com/blog/the-influence-of-sustainable-development-goals-sdgs-and-ngo-reforms-in-ni
geria-effects-advancements-and-obstacles/
accountability. While intended to enhance transparency, these requirements
may disproportionately burden smaller organizations, potentially stifling their
operations38

3.​ Poor Communication and Limited Access to Information:

Many NGOs struggle with poor communication and lack reliable email and
internet access. They receive little to no literature on development issues and
often remain disconnected from global, regional, and national matters. Limited
access to information, combined with language barriers and cultural differences,
can lead to misunderstandings about NGO goals and the priorities of
communities in crisis. This, in turn, causes frustration and disappointment among
NGO staff (UNECA, 2001).

4.​ Political and Economic Instability In developing nations, the issue of

sustainability is further compounded by political and economic instability.
NGOs operating in these environments often face restrictive government
policies, bureaucratic hurdles, and, in some cases, outright hostility from
authorities. Additionally, fluctuating exchange rates and inflation can
erode the value of international funding, making long-term planning even
more difficult. Unlike their counterparts in developed nations, NGOs in
these regions may also struggle to attract skilled professionals due to
limited salaries and career development opportunities, impacting their
operational capacity and overall effectiveness.

Ultimately, while innovative financing models present new opportunities for

sustainability, NGOs must navigate an increasingly complex funding landscape.
Achieving financial resilience requires a multi-faceted approach, including
diversifying revenue streams, strengthening internal governance, and leveraging
strategic partnerships. As traditional donor models continue to evolve, NGOs
must adapt by integrating sustainable financial practices while maintaining

38
Otaru, S. F., Adeyeye, M. M., & Sajuyigbe, A. S. (2021). Financial resource mobilisation strategies
and sustainability of non-governmental organisations (NGOs): Evidence from Nigeria. International
Journal of Contemporary Management, 57(2), 1–8. https://doi.org/10.2478/ijcm-2021-0004
accountability and transparency to build trust with donors and beneficiaries
alike.

Analysis and Findings

The finding reveals that while different funding sources exist for NGOs' activities,
foreign aid represents a significant source of NGOs' financial sustainability. In a
world where priorities shift, and certainty is not a guarantee, as seen in the
administration order to freeze foreign aid by the President of the United States,
thereby putting many U.S funded overseas assistance programs in sudden
limbo39, to thrive in a donor-dependent world, there is, therefore, the need for
NGOs to put on their thinking caps and proactively engage in diversified means
of generating income to fund their existing projects or activities. The finding
further affirmed Green et al. (2021), who argued that diversification of income
sources is the most sustainable financing strategy among NGOs.40

The review of existing literature also reveals the need for local involvement in
community-based activities, thus enhancing ownership of projects and working
closely with grassroots stakeholders to create a delivery system that matters
and meets their needs. Oxfam, a global organisation, has proven that locally
informed and locally driven solutions are the best solutions - the most
sustainable and the most appropriate - because they come from the people
who can keep the initiatives going after the organisation and its funding goes
away.41

The literature review also highlighted that existing governance structures and
institutional frameworks affect NGOs' sustainability. The findings are supported

39
Ward, A., Steinhauser, G., & Gordon, M. R. (2025, January 28). Trump Order Freezing Foreign Aid
Halts Programs Worldwide, Prompts Confusion and Rush for Waivers. WSJ; The Wall Street Journal.
https://www.wsj.com/politics/national-security/trump-order-freezing-foreign-aid-halts-programs-worldwi
de-prompts-confusion-and-rush-for-waivers-af2b6ece
40
Green, E., Ritchie, F., Bradley, P., & Parry, G. (2021). Financial Resilience, Income Dependence
and Organisational Survival in UK Charities. VOLUNTAS:
International Journal of Voluntary and Nonprofit Organizations, 32(5), 992– 1008.
41
Oxfam. (2019, April 26). Top 10 things you need to know about Oxfam. Oxfamamerica.org.
https://www.oxfamamerica.org/explore/stories/top-10-things-you-need-to-know-about-oxfam/
by Kereri and Pascal42 who pointed out that most organisations must navigate
complex institutional frameworks and bureaucratic processes and, at times,
adjust their policies to align with institutional norms and values. According to
them, this alignment is often necessary to gain legitimacy and enhance
long-term sustainability. Thus, NGOs must clearly define what drives them and
set a clear path towards achieving their goals and missions while showing a
strong commitment to transparency, accountability, and good governance.

Lastly, our findings reveal that while partnering with the private sector has
proven to enhance NGO sustainability and offers numerous benefits, the
disadvantages often outweigh these advantages. Challenges such as mission
misalignment, operational constraints, and uncertainty frequently arise.

To navigate these issues, NGOs should prioritise partnerships with private

companies that share their values and uphold principles of accountability and
transparency.

Conclusion

With funding from USAID and other traditional sources declining, NGOs must
adopt sustainable strategies to ensure the continuity and effectiveness of their
programs.
The Community Development Committee (CDC) under USAID has underscored
the importance of empowering local NGOs to take ownership of projects,
reducing dependency on external donors.43
A key approach involves diversifying funding sources beyond reliance on foreign
aid. To do this, NGOs can explore the option of Public-private partnerships

42
Kereri, E. Pascal M. (2024) Determinants of Financial Sustainability for Local Non-Governmental
Organisations in Arusha, Tanzania. NG Journal of Social Development.22

43
WPAB. (2025, January 7). Transforming Communities Through Development and Aid: What USAID
Does - fundsforNGOs. FundsforNGOs - Grants and Resources for Sustainability.
https://www2.fundsforngos.org/articles/transforming-communities-through-development-and-aid-what-
usaid-does/
(PPPs). They serve as another viable strategy for mitigating financial constraints.
Collaborating with private sector entities enables NGOs to secure
co-investments, leverage corporate expertise, and expand sponsorship
opportunities, enhancing financial stability
New and innovative funding mechanisms, such as online giving, crowdfunding,
impact bonds, and solidarity levies, offer additional opportunities for financial
resilience The case of SolarAid, which transitioned from a traditional
donor-funded NGO to a financially sustainable social enterprise through
SunnyMoney, highlights the potential for NGOs to adopt alternative business
models to achieve long-term stability.

In 2024, Oxfam- an international Non Govermental Organization generated one

billion nine million euros as income with 18% of it being from its trading centers.
Oxfam expended 10.2 million Euros in Nigeria in 2024. Oxfam operates a network
of charity shops that sell donated second-hand clothing, books, and household
items. These shops generate significant income, which is reinvested into Oxfam's
various initiatives. Nigerian NGOs could benefit from adopting social enterprises
as a strategy to generate sustainable funding for their programs.

Another option is to establish businesses related to their mission or offer

services such as consulting, training, or capacity-building programs for a fee.

Ultimately, financial sustainability is the cornerstone of an NGO’s ability to fulfil

its mission, even in the absence of external donor support. Overdependence on
restricted funding poses a significant threat to long-term viability. By
implementing diverse funding strategies, enhancing financial management,
strengthening local capacities, fostering public-private partnerships, and
incorporating sustainable development practices, NGOs can secure their future
and continue their vital contributions to societal development.
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