The Implications of Corporate Governance Principles on Local NGOs’ Funding in Zimbabwe

Abstract

Corporate Governance plays a pivotal role in promoting the image and performance of Non-Governmental Organisations (NGOs) as they discharge their duties. It sets out the parameters through which transparency and accountability can be enhanced. In the context of limited resources, upholding corporate governance, thus, allows effective collaborations between NGOs and their internal and external stakeholders which is crucial for their growth and sustainability. The purpose of this study was to assess the implications of corporate governance principles on local NGOs funding with reference to Zimbabwe. The study was underpinned by the main objective to establish the factors compromising the effective adoption of corporate governance principles and implementation of frameworks by local NGOs to secure sustainable funding opportunities. Thus, the study sought to establish the nexus between corporate governance and local NGOs funding in the Zimbabwean context. A pragmatic paradigm was adopted to allow the use of mixed methods in data collection and analysis of both qualitative and quantitative data. Simple random sampling was utilised as a sampling technique to select the study’s respondents The study findings revealed that corporate governance fosters transparency and accountability in organisations which are critical conditions for securing funding for local NGO operations in Zimbabwe. However, upholding these corporate governance principles such as transparency and accountability was the major challenge in most local NGOs as they discharge their complementary role in poverty alleviation. Corruption, nepotism, lack of effective communication, limited skill base, and inadequate financial resources were observed as some of the major challenges undermining corporate governance principles within local NGOs in Zimbabwe. The above scenario compromises the image of local NGOs, and their funding opportunities are severely threatened culminating in the closure of their operations due to funding gaps. The local NGOs’ closure entails a serious burden on the government to deal with all development challenges in the country. It also emerged that the existence of proper governance structures is often dampened by the lack of financial resources and weak technical skill sets to support accountability and transparency within the organisation. The study recommended that addressing the above-mentioned challenges is crucial for local NGOs to restore corporate governance which is key for effective funding. Part of the solutions include the imperative for building strong relationships and improving communication with donors to restore confidence and mutual respect among each other. There is also a need to strengthen various institutional frameworks governing NGO operations such as auditing, accounting, and Board oversight to restore transparency and accountability in these organisations.