Budgeting and performance of not-for-profit organisations in Uganda; case study: Nebbi Catholic Diocese

Abstract

Budgeting has been pointed out as a key issue which helps in boosting the performance of Not for profit organizations. The General objective of this study was to ascertain the effect of budgeting on the performance of Not for profit Organizations using Nebbi Catholic Diocese for the study. The specific objectives of this study were; to ascertain the effect of budget preparation on performance of not for profit organizations in Uganda, to examine the effect of budget approval and implementation on performance of not for profit organizations in Uganda and to assess the effect of budget control on performance of not for profit organizations in Uganda. The study was underpinned by the Legitimacy theory, which was developed by Prabhu and Neu (1998). They (authors) argue that business organizations must consider the rights of the community at large, not merely those of investors and that when an actual disparity exists with a budget framework, then there is risk of the organization not attaining its set goals. Using case study design, both qualitative and quantitative techniques were used to collect data from the sampled 92 respondents out of the 120 Employees in the Diocese. The sample size was determined using Stratified sampling techniques with the aid of Krejcie and Morgan’s (1970) table of population sampling. The findings of the study revealed that there is a positive and significant relationship between budget preparation and performance of not for profit organizations represented by (r = 0.694, P<0.05). The study also revealed that there is a positive and significant relationship between budget approval and implementation and performance of not for profit organizations represented by (r = 0.745, P<0.01). The study further revealed that there is a positive and significant relationship between budget control and performance of not for profit organizations represented by (r = 0.771, p<0.01). Regression analysis indicated that budgeting contributes to performance of not for profit organizations by 67.1% indicated by the Adjusted R value. Budget control contribute more to the performance of not for profit organizations than the other factors with a Beta of 0.474, Budget approval and implementation had a Beta of 0.319, and lastly Budget preparation with a Beta of 0.115. Consequently, it is concluded that budgeting activities of Budget preparation, budget approval and implementation and budget control are playing a significant role in the performance of not for profit organizations with budget control having the biggest contribution. The study recommends not for profit organizations to much emphasis on budget control as well other budget activities all of which enhance the performance of not for profit organizations.