Correlate of Income Diversification and Financial Sustainability of Private Tertiary Institutions as Moderated by Institutional Profile

Abstract

In our world today, financial sustainability challenges of Private Tertiary Institutions (PTIs) reverberate far and wide as a result of limited resources caused by reductions in state support in funding higher education and dwindling enrolments. These situations limit mission achievements. There are many predictions of PTIs closure due to mounting deficits. Calls for government assistance are not yielding any results as increasing demographic diversity has correlated to decreasing financial support from governments. Given this phenomenon, this study looked at the correlate of income diversification and financial sustainability of private tertiary institutions as moderated by institutional profile. The study utilized parametric inferential statistics by relying on regression Process v3.2 by Andrew F. Hayes model 1. The study was carried out in private tertiary institutions in the Greater Accra Region of Ghana. Fourty out of the Sixty PTIs in the Region were, randomly sampled to answer the self-constructed questionnaires with the Cronbach Alpha of .863 for income diversification and .852 for financial sustainability. The study revealed a positive and moderate relationship between income diversification and financial sustainability. Income diversification predicted financial sustainability by 17.6%. There was a significant enhancing moderating effect of institutional profile on income diversification and financial sustainability relationship. Denominational PTIs relied more on income diversification for financial sustainability than Non-denominational PTIs. The study, therefore, recommends that the PEIs invest in profitable income diversification ventures. The study further recommends for future studies to identify the other 82.40% variables that can help to explain financial sustainability of PEIs.