ABSTRACT

NGOs have recently faced issues with financial sustainability due to dwindling funding from donors. The study analyses the extent to which financial performance impact on the financial sustainability of NGOs. The research questions are to what extent financial performance impact financial sustainability and what role overhead cost plays in ensuring sustainability. The objectives are to identify the composition and trend of funding in Christian Aid, compute and analyse non-profit financial ratios to determine the financial performance of the NGO and how they impact sustainability as well as identify areas for improved efficiency and cost saving. Time series quantitative research methodology is used with secondary data from audited financial statements and internal reports of Christian Aid spanning a ten-year period analysed. Relevant ratios are computed and trend analysis are applied on the data. Generally, CA is heavily reliant on donor funding and has very high overhead and personnel cost which raises concerns of their financial sustainability and going concern in Ghana. Some recommendations will be for CA to actively diversify their portfolio of income to reduce the heavy reliance on restricted fund, identify key drivers of overhead cost, reduce them to the barest and adopt cost effective ways of working. The organisation may want to also conduct further study to focus on standardizing processes and again focusing deliberately on fundraising to bring in more income.