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Challenges 2: NGOs Rivalry
There has been an increasing number of NGOs worldwide. The most notable increase in NGO
numbers has occurred in India with 3.3 million (Srivastava & Tandon, 2005). The National Center for
Charitable Statistics (2020) reported that the number of registered NGOs in the United States also
increased by approximately 1.5 million. The number of registered NGOs in the United Kingdom
increased by over 200 000 (Clark, 2020), while the number of registered Australian NGOs has
increased to 60 000 (Australian Charities & Not-for-Profits Commissions, 2020). The number of
registered NGOs in Malaysia also experienced an explosion. The Registrar of Society (ROS) Malaysia
(2021) reports that the NGOs number has increased by over 20 000. Due to the increasing number of
NGOs worldwide, including Malaysia, they experienced intense rivalry to get donor funds (Arhin,
2016). Then those NGOs struggle to get limited funding (Werker & Ahmed, 2008). For example,
NGOs conduct a humanitarian mission for flood victims (Sheate & Partidário, 2010). Donors
nowadays have a great demand from NGOs to provide funding, such as the donors required for proper
paperwork and transparency funding flows. However, some NGOs lack knowledge in preparing for
paperwork and are unable to provide a proper funding statement (Abouassi, 2013). Considering this
situation, NGOs have to compete with other NGOs to attract donors in providing funding. Thus, the
NGOs rivalry is a part of the most significant challenge for NGOs to obtain the donors’ funds.

Challenges 3: Restrictive Requirement of Donor Funding
Donors are becoming increasingly selective in their funding of NGOs. Donors have the requirements
to spend their money on NGOs (Doornbos, 2003). Among them are Malaysian NGOs should be
registered in the Malaysian ROS, NGOs programs must have an enormous impact on the community
and good financial reports. First, registered NGO programs are legal; thus, the donor has more
confidence to spend their funds on NGOs (Fafchamps & Owens, 2009). Second, NGOs provide
programs that have a beneficial impact on communities. For example, NGOs support single mothers
with training and skill

Conclusion
NGOs require funding sources to survive (Pfeffer & Salancik, 2003). Most NGOs are heavily reliant
on external sources for funding. However, reliance on external sources is challenging. The previous
discussion noted that there are numerous challenges of donor funding for NGOs. Among the
challenges are the inconsistent and limited funding, NGOs rivalries, restrictions on donors funding
requirements, the shift in donors funding priority and donor discrimination that can impact NGOs’
operations and lead to termination. A better strategy needs to be explored by the Malaysian NGOs to
minimise the funding challenges. Froelich (1999) argues that NGOs change their understanding of
donors’ perception by adjusting or modifying their goals or mission to meet the donors’ criteria.
Mitchell (2012) reported that NGOs have to diversify the funding sources to avoid becoming too
dependent on any single source. It involves income-generating activity from sales of goods and
services and entrepreneurship activities (Froelich, 1999; Khieng & Dahles, 2014). Otherwise, Suárez
and Hwang (2012) also suggest that NGOs could look for prospects of collaboration and donations
with government agencies, corporations and individuals. This way, NGOs may be able to minimise
the funding challenges and external control. Therefore, further study is to explore strategic approaches
for funding acquisition in Malaysian NGOs. Hopefully, such a new strategic approach would be
beneficial to enhance the usefulness of Malaysian NGOs activities for funding acquisition. It also can
provide a guideline of funding acquisition which is beneficial to the NGOs themselves.

References
Abouassi, K. (2013). Hands in the pockets of mercurial donors NGO response to shifting funding priorities.
Non- profit and Voluntary Sector Quarterly, 42(3), 584–602.

Adams, S., & Atsu, F. (2014). Aid dependence and economic growth in Ghana. Economic Analysis &
Policy, 44(2), 233–242

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