Financial Resource Mobilization Strategies and Financial Sustainability of Universities in Kenya

Abstract

Universities in Kenya have developed various strategies to mobilize resources to mitigate against the difficulties arising from the reduction of government funding and the pressing need for the institutions to cover part of their costs. This change in strategy is in pursuit of financial sustainability for the institutions of higher learning. Despite the tremendous range of ways that exist to mobilize resources, the rising number of students, coupled with the increasing cost of teaching and research, continues to pose a challenge in the quest to identify sustainable funding models. This study assessed the effect of financial resource mobilization strategies on the fiscal sustainability of universities in Kenya. The specific objectives were to critically evaluate the influence of five strategies of resource mobilization on the financial sustainability of universities in Kenya. These were the fees collection strategy, donor funding strategy, investment strategy, consultancy funding strategy, and the linkages and partnership strategy. The study adopted quantitative and cross-sectional correlational research design. Quantitative data were analyzed using STATA and were summarized using bar charts, frequencies and percentages. The qualitative data were analyzed and presented using narrative description. The study relied on the resource mobilization theory, knowledge-based view theory, Modern Portfolio theory, Modigliani-Miller theory, Regression Discontinuity Theory of Education Interventions and resource dependency theory. This census study comprised a population of all 71 universities in Kenya as of 31st December 2018. The primary and secondary data were collected using a structured questionnaire and data-collection sheet respectively. This study used 10% (N = 7) of the target population for pilot testing of the validity and reliability of the research instruments. Accordingly, the Cronbach’s α >.75, for all the variables of the study hence met the conditions of reliability. The descriptive and statistics were used. The findings of simple linear regression analysis indicated that all the five resource mobilization strategies yielded a statistically significant positive effect on financial sustainability. Similarly, the results of multiple linear regression analysis exhibited a statistically significant influence of all the resource mobilization strategies on financial sustainability. The findings therefore provide meaningful insights regarding how stakeholders in the higher education sector can utilize various resource mobilization strategies especially in order to realize improved financial sustainability of institutions of higher learning in Kenya. The limitation encountered during the study was the combination of the public and private universities into the study yet the two have some differences in the financing structures. This however made the study more comprehensive for generalization to the entire country and countries with similar regulatory regimes. This study recommends that universities put in place mechanisms of ensuring that they have identified a team of researchers who can develop fundable proposals to secure sufficient donor funding in an effort to enhance financial sustainability. Further, universities need to establish a consortium of researchers through partnerships and linkages to benefit from their diverse expertise and innovations that will lead to intellectual properties for financial sustainability.