NGOs’ Financial Management and Executive Director’s Discretionary Power: A Case Study of Cambodia NGOs
DOI:
https://doi.org/10.14456/gjl.2017.36Keywords:
Cambodia Local NGOs; Funding Resources; Discretionary PowerAbstract
This qualitative research investigated non-governmental organizations' discretion in the use of funding resources of Cambodian NGOs. The objectives of this study were to: 1) Analyze the source of funding for local NGOs in Cambodia, 2) Measure the level of discretion of local NGO executive directors in running their organizations to meet their objectives and, 3) Assess the relationship among sources of funding, amount of external funding, and the NGOs' discretionary power. This study was conducted in Phnom Penh City, and Siem Reap, and Banteay Meanchey Provinces. Nine executive directors and representatives of local organizations served as subjects. The in-depth interview was conducted based on research objectives. Local NGOs were classified as large, medium, and small NGOs, based on annual budget.
The results revealed the following: 1) Large NGOs' source of funding come from international organizations, while medium-size NGOs received funding from foundations. On the other hand, small NGOs received half their funding from individual donors and half from international organizations. Financial regulations and policies stipulate the maximum budget that an executive director can approve for each organization. External audits, management structure, the mandate of senior leaders, qualifications, and executive director's discretionary power also determine the use of funding resources. 2) The level of discretion of local NGO executive directors in running their organizations varied depending upon the size of the NGOs. For example, small NGOs are usually an autonomous body with greater authority in decision making than large and medium NGOs because their sponsors did not impose conditions on their grants. Also, external audits are expensive and, thus, smaller NGOs usually refuse larger grants that require an audit. 3) Regarding the relationship among sources of funding, amount of external funding, and the NGOs' discretionary power, it was found that large and medium NGOs are less flexible in terms of maneuvering their own funding resources due to the organizational restrictions. By contrast, smaller NGOs were more flexible. Furthermore, the study revealed that nearly all the large and medium NGOs relied on external funding. This means that donors have greater influence over the performance evaluation of the organization. By contrast, smaller NGOs are more autonomous in their management.
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