Phased Financing, Project Governance and Project Sustainability in Donor-funded Non-governmental Organisations: A Critical Desk Review of the Kenyan Evidence

Michael Owuor Onyango and Ambrose Kyalo Kaumbulu
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Michael Owuor Onyango: Africa Nazarene University, Nairobi, Kenya.
Ambrose Kyalo Kaumbulu: Africa Nazarene University, Nairobi, Kenya.

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Abstract: Donor-funded non-governmental organisations in Kenya operate under financing arrangements that are almost universally phased: grants are divided into tranches, disbursement is tied to milestones, reporting cycles and expenditure verification, and continuation beyond an initial period is contingent rather than assured. The consequences of this architecture for how projects are governed and for whether their benefits persist after external funding ends have been examined in scattered literatures that rarely speak to one another. This critical narrative review draws together evidence from project governance research, nonprofit financial management, aid effectiveness economics, and health and water systems research in order to assess what can defensibly be claimed about the relationship between phased financing, project governance and project sustainability in the Kenyan non-governmental sector, and what remains unresolved. Literature was identified through bibliographic and full-text scholarly indexes and citation tracing, with a search period extending from 1998 to 9 June 2026, supplemented by foundational earlier work. The synthesis identifies four persistent problems. Definitions of sustainability remain unstable, so that continuation of an organisation, of a service and of a benefit stream are frequently conflated. The mechanisms through which tranche-based disbursement shapes governance behaviour are theorised in several incompatible ways, and the empirical literature seldom tests between them. Evidence that revenue diversification protects organisational survival is inconsistent, and the sub-Saharan findings diverge from the aggregate pattern reported in meta-analytic work. The Kenyan evidence base is dominated by small cross-sectional survey studies with weak measurement of both governance and sustainability, published largely outside indexed scholarly channels, which limits what can be concluded about causal direction. The review argues that phased financing is best understood not as a single instrument but as a family of contracting arrangements whose governance effects depend on the length of the horizon signalled, the reversibility of the funding decision, and the degree to which control rights are shared. Research priorities are set out that emphasise longitudinal designs, measurement of post-funding benefit persistence rather than organisational survival, and the study of governance as an observable practice rather than a self-reported attribute.

Date: 2026-08-21
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Published in Asian Journal of Economics, Finance and Management , 2026, 8 (1), pp.858-882

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