ROSE NJOKI CHEGE2026-03-312026-03-312025-09https://repository.cuea.edu/handle/123456789/669ThesisSustainability is a crucial factor for the success of any organization, whether small or large, industry-specific, or generalized. However, achieving sustainability is challenging, as it requires significant effort, careful planning, and continuous monitoring of both revenue sources and expenditures. The purpose of this study was to assess the relationship between financial management practices and institutional sustainability of non-governmental organizations in Nairobi County, Kenya. Many NGOs struggle with sustainability, primarily due to poor financial management. Therefore, this study sought to assess the effect of financial management practices on the sustainability of NGOs in Nairobi County, Kenya. Specifically, it examined the effect of financial reporting efficacy, income source diversification, budgetary controls, and financial risk management on NGO sustainability. To achieve this objective, the study drew on various theoretical frameworks, including Agency Theory, Resource Dependence Theory, Pecking Order Theory, and Institutional Theory. The study used cross-sectional descriptive research design and targeted 1,143 NGOs in Nairobi County from which 10% of the population was selected using simple random sampling technique to make a sample size of 114 NGOs. Data was collected via structured questionnaires and the analysis involved both descriptive and inferential statistics. Descriptive statistics included mean, std dev, frequency and percentage. The results were presented on frequency tables. The findings revealed a coefficient of determination (R²) of 0.771, indicating that financial reporting efficacy, income source diversification, budgetary controls, and financial risk management collectively explain 77.1% of the variation in NGO sustainability in Nairobi County. The ANOVA results confirmed model significance (F = 87.753, p = 0.000), affirming the overall fit. Regression results showed significant positive effects from financial reporting efficacy (β = 0.333, p = 0.000), income source diversification (β = 0.380, p = 0.000), budgetary controls (β = 0.197, p = 0.000), and financial risk management (β = 0.178, p = 0.000). All four null hypotheses were rejected, confirming the predictive relevance of these financial practices. The study concludes that sound internal financial management significantly enhances NGO sustainability. In view of the findings, the study recommends that NGOs should institutionalize effective financial reporting, diversify income sources, implement strong budgetary frameworks, and adopt proactive risk management strategies.en-USFinancial management practicesinstitutional sustainabilitynon-governmental organizations (NGOs)financial accountabilityorganizational performance.Thesis