Evaluation Of The Role Of Strategic Planning In The Operationalization And Financial Management Of Non-Profit Organizations In Kenya

Abstract

Strategic Planning has generally been held by not-for-profit organizations as a key success factor for achieving short term and long term goals. These organizations generally consider themselves successful if they are able to attract funding to execute their mission. It is believed that not-for-profit organizations which are successful in terms of financial management outcomes achieve such success as a result of effective implementation of strategic plans. However, little information is available on the relationship between strategic planning and implementation and not-for-profit organizations’ management and financial outcomes. This study evaluated the extent to which strategic planning contributes to the success of management of not-for-profit organizations. Management success was measured in terms of staff knowledge and innovation capacity, operational efficiency, financial management efficiency, and income growth. The study involved five NPOs namely; African Medical and Research Foundation, Christian Health Association of Kenya, LVCT Health and Training, Kenya Red Cross Society, and Undugu Society of Kenya. Members of the respective Board of Directors and top management were interviewed while a survey questionnaire was administered to senior and middle level managers. Financial data including income, cash operating reserve, and current ratio were computed from the respective organization’s financial statements covering years 2005 to 2016. Content analysis was used to analyze the interview data while the survey data was analyzed using descriptive and regression statistical methods. Further, financial data was analyzed using time series analysis. The results showed compelling evidence indicating that strategic planning and implementation had significant positive impact in the operation and financial management of the study not-for-profit organizations and hence in their success. The study provides a strong foundation on effective management of strategic planning process and implementation. This study would also be useful to not-for-profit organizations’ management in the decision to invest in strategic planning process for better operational and financial outcomes of their organizations. In addition, creates new grounds for further work by scholars in the study of the relationship between strategic planning and financial management.