This study aimed at investigating the determinant factors affecting financial sustainability of local NGOs located in eastern Hararge zone, Ethiopia. This study adopted a descriptive research design. The research target population was made up of 216 staffs of local nongovernmental organizations in eastern Hararge zone. Purposive sampling technique was applied in sample selection. Analysis was done using descriptive statistics using SPSS software. The analyzed data was presented through mean and standard deviation. There was need to determine if there was an existing relationship between the variables of study and the researcher used correlation and regression analysis.
The study results also showed that there was a significant positive relationship between independent variables and dependent variable. The study concluded that income diversification, donor relationship management and financial management systems played a critical role in the financial sustainability of local NGOs. The study recommended that, NGOs should identify and implement various income generating activities with a view of achieving self-sustenance especially in light of declining donor support and should develop an operating framework that allows frequent meaningful collaborations with the donors in the execution of their activities. Furthermore, NGOs should strengthen their financial reporting structures to ensure effective management of their financial resources.
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