Beyond Donations: A Descriptive Snapshot of Financial Sustainability in Malaysian Charity NPOs
List of Authors
  • Khadijah Suria, Nor Hidayah Abd Rahim, Nur Hayati Ab Samad, Nuridayu Yunus

Keyword
  • Non-Profit Organisation; Financial Sustainability; Sustainable Development

Abstract
  • Non-profit organisations (NPOs) consistently face significant challenges in ensuring their financial sustainability, often operating with limited resources amidst increasing competition and declining donor support. The economic impact of the COVID-19 crisis has further threatened their financial sustainability, leading to anticipated declines in funding and operations. This study aims to descriptively assess the financial sustainability of charity NPOs in Malaysia. Financial sustainability indicates an NPO's ability to remain viable and less financially vulnerable. Employing a cross-sectional empirical examination, data were collected via a survey questionnaire from 159 charity NPOs registered under the Registrar of Societies (ROS) in the Klang Valley area. The results indicate a mixed financial health profile among the charity NPOs. They demonstrated perceived strengths in cost management and administrative cost flexibility, indicating efficient internal financial control and adaptability during challenges. However, significant vulnerabilities were observed in ensuring sustainable and diverse income sources and maintaining a high operating margin, as well as a sufficient equity balance. These findings portray that charity NPOs face persistent challenges to continuously deliver their mission in the long run and struggle to maintain long-term resilience. This study offers empirical evidence on the financial viability and vulnerabilities of charity NPOs in Malaysia, portraying their internal strengths and significant vulnerabilities that influence the organisational sustainability.

Reference
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