Financial management and performance of non-governmental organizations in Uganda

Abstract

The purpose of this study was to establish the effect of financial management on performance of NGOs in Uganda, a case of International Alert. International Alert registered very low budgetary performance in the financial year 2014/15, which was indicative of poor performance. Low budgetary performance signalled to the quality of financial management. The study therefore, established the effect of financial planning, financial accountability and financial monitoring on performance of NGOs. The study used a cross sectional survey design where both quantitative and qualitative approaches were applied on a sample of 53 respondents drawn from staff and partners of International Alert Uganda. Data was collected using a mailed questionnaire, an interview guide and a document review checklist. Descriptive and inferential data analysis was done on quantitative data using SPSS Version 20.0 while qualitative data was subjected to content analysis and presented in narrative form. The study findings showed that financial planning, financial accountability and financial monitoring accounted for 31.6%, 22.9% and 21.7% of the variations in performance of NGOs, respectively. The study findings also showed that financial management accounted for 33.5% of the variations in performance of NGOs and there are other factors that affect performance of NGOs that accounted for 66.5% of the variations. It was concluded that financial planning, financial accountability and financial monitoring have an effect on performance of NGOs. For better performance therefore, the study recommends that management and staff of NGOs should plan for financial resources; establish and follow financial accountability procedures and, establish and adhere to financial monitoring systems. The study findings demonstrated the importance of financial management and its effect on performance of NGOs in Uganda and will stimulate debate on the role of financial management among policy makers. The study also filled the gap in literature by providing empirical evidence on financial management factors that affect performance of NGOs in Uganda.