Impact of Participatory Strategic Planning on Financial Performance of Donor-Supported NGOs in Uganda

Abstract

This study examines the relationship between strategic planning practices and financial performance in Ugandan organizations, with a focus on NGOs, SMEs, and the banking sector. The primary objective was to assess the impact of strategic plan formulation, implementation, and evaluation on financial performance and organizational growth. A mixed-methods approach was adopted, combining both quantitative and qualitative research methods. A sample of 101 respondents, drawn from a population of 133, participated in the study, which utilized questionnaires and interviews to gather data. Quantitative data were analyzed using descriptive statistics, hierarchical regression, and multiple regression, while qualitative data were analyzed using thematic coding. The findings indicated a positive correlation between strategic plan formulation and financial performance, with strategic alignment significantly enhancing growth outcomes. Statistical analysis revealed that strategic plan implementation had a strong impact on financial outcomes, though challenges in execution, such as resource misallocation, were highlighted. Qualitative responses reinforced these findings, with participants emphasizing the importance of clear implementation strategies, stakeholder involvement, and continuous evaluation. In contrast, the study found inconsistencies in the evaluation of strategic plans, with limited use of non-financial performance metrics affecting comprehensive organizational assessment. The study concludes that strategic planning, when properly formulated and implemented, can significantly improve financial performance. However, organizations must enhance their strategic evaluation processes to capture both financial and non-financial outcomes better. Based on these findings, it is recommended that organizations integrate participatory planning, improve resource allocation, strengthen monitoring and evaluation systems, and build financial management capacity. Policymakers are encouraged to implement frameworks that align strategic plans with financial goals to drive long-term sustainability.