Influence of Income Generating Activities on Financial Sustainability of Churches. Case of Compassion International Church Partners in Kenya

Abstract

The rising rate of collapsing initially donor funded income generating projects has escalated interest on sustainability. This study sought to establish influence of IGAs on financial sustainability of Compassion International Church Partners. The targeted population was 118 churches in four stratified program regions across Kenya. Proportionate stratification formula (nh = (Nh / N) * n) was engaged to select 91 churches from the four regions that had partnered with Compassion International –Kenya for at least 10 years. Data was collected online using a semi-structured questionnaire. Results revealed that churches are effective in communicating the IGAs (65%) and the plans for the economic activities they are involved in for sustainability. However, the ability to integrate income generating and fundraising processes into the existing financial and administrative structures was below average (40%). Correlation analysis revealed that contrary to people’s expectation, there was a significant negative correlation between financial sustainability and income generation activities (r=. -234, p<.05). Multiple linear regression analysis indicated that IGAs had insignificant predictive abilities for financial sustainability at 95% confidence, p>.05 (β=- 0.024, t=-.0289, p>.001) of the church partners. Results indicate high dependency on Compassion International funding which does not assure sustainability. The findings shall inform practice, rules, grant guidelines, local resource mobilization and government policy formulation.