This study investigated the factors affecting the financial sustainability of local non - governmental organizations in Tanzania using a case of Bukoba Municipal Council. The study had three specific objectives which were, to explore multiple sources of financial diversification strategies used by LNGOs to ensure financial sustainability, to examine the influence of leadership competencies on strategic financial management in LNGOs, to study the influence of donor‟s funding policies on the financial sustainability of LNGOs. This study adopted a descriptive case study research design with a sample size of 135 respondents. This study employed interviews, questionnaire, and documentary in data collection tools. SPSS and content data analysis were employed for data analysis. The study found that sources such as social entrepreneurship activities, fundraising events, tapping international funding streams, sourcing from corporate donors and partners, owning and managing own business, consultancy as well as training for fee are commonly used, and also it was found that the majority of LNGOs‟ leaders have low academic qualifications on strategic financial management. Finally, the study recommends that the LNGOs leaders should seek for training from the reputable financial institutions to upgrade their leadership competencies on strategic financial managements particularly on the capability to handle a number of projects, skills on financial governance, as well as having enough practices and approaches on strategic financial management.