Effects of Income Generating Activities and Donor Funds on Liquidity of Public Universities in Kenya

Abstract

The issue of public universities' financial difficulties is a global one. To determine how well-equipped our universities are to function better, research on the liquidity of public institutions must be crucial. Stakeholders that are keen to address the financial challenges public universities face are particularly interested in how universities fund their operations. The study's main goal was to evaluate how donor financing and income-generating activities affected Kenya's public universities' liquidity. Two theories provided guidance for the study: general systems theory and resource dependency theory. Causal research design was adopted in the study. All 31 Kenyan chartered public universities made up the study's population, which was conducted over the course of five years, from the 2016–2020 fiscal years. Because of the minimal number of public colleges, a census was conducted. Descriptive analysis and inferential analysis utilizing a panel data regression model were used to analyze the data. The Office of the Auditor-General provided the quantitative secondary data used in the investigation. The study guaranteed that all data acquired was used exclusively for the study and secured research permits from NACOSTI. The study found that Income generating activities and donor funding though they contribute largely to the universities finances, they have minimal effect on liquidity of these universities. The study recommends that universities should enhance donor engagement initiatives to cultivate long-term relationships and secure sustainable funding sources. They should also prioritize streamlining their methods for generating revenue and in need to alleviate future liquidity issues, universities should diversify revenue streams, investigate creative income-generating activities, and improving resource utilization efficiency.

Keywords: Income Generating Activities, Liquidity, Public Universities, Donor Funding