Crushing everyday challenges of Non Profit Organizations with an effective MBO strategy

Incorporating MBO to solve common challenges faced by Non Profit Organization

Non Profit Organizations(NPOs)  are the agents of change in society who toil endlessly to empower citizens at grassroots. While governments propose ideas, policies, and regulations that point to the direction of change, it is often in the work of the NPOs that the rubber meets the road. They are the unsung heroes who crusade for intergenerational equity across economic, psychological, and sociological contexts – from poverty to gender parity to climate change. There are over 1.5 million Non Profit Organizations in the United States alone. Though divided in vision and mission values, they all function towards depth and resilience in civil society, expression of citizens’ voices, and sustainable development goals. It is not uncommon to assume these organizations (crusading for a better tomorrow) to be well equipped with astute state-of-the-art technologies to keep them up to speed with the rapidly evolving changes around them. Sadly, this couldn’t be farther from the truth.

Let us take a look at some of the most common challenges that Non Profit Organizations face today:

Ambiguous and Abstract Goal Setting

Roadmaps are indispensable while defining the goal or desired outcome for any project, even more so in the case of Non Profit Organizations(NPOs). Having a holistic strategy that defines steps or milestones is critical.

NPOs need to have a shared vision and common understanding of what is expected of them and how. When the objectives are vague, it is easy to get lost in the process. While attempting to reduce pious intentions to strategic objectives, administrators will often invariably encounter some equally valid objectives that can be mutually incompatible or, at least, quite inconsistent. It will be pivotal that such clarifications be made on a forum visible to the entire task force.

Each task must be defined and driven towards an objective with tangible outcomes. It will be important to keep the tactical and operational activities centrally aligned with NPO’s overarching objectives.

Technology Lag

Non Profit Organizations(NPOs) generally do not have time and bandwidth to invest and keep up with evolving technological advancements. Today, there are many information radiators, collaboration software tool and performance tracking solutions that help support them operate more efficiently even during unprecedented times.

NPOs can leverage software tools that can help incorporate their objectives and streamline their operations effectively.

Financial Paperwork

Funding is the fuel that helps keep the noble aspirations of NPOs aligned with realistic outcomes. It becomes unequivocally critical for Non Profit Organizations(NPOs) to maintain an unimpeded flow of funds for their business operations. Funding and the related activities can often lead to a whirlwind of paperwork that can take up a big chuck of the bandwidth and impede real progress. 


With software tools, it will become easy for NPOs to track funding and derive intelligent analysis that can help further make decisions to improve opportunities for better funding.


In the current pandemic climate, funding and sponsorships have become even more challenging. Establishing good governance around networking and fundraising would help to stay on track and achieve financial goals.

Centralized Issue Tracking

There are many contextual pressures and risks that NPO’s come across while pursuing their goals and objectives. A centralized issue tracking and management solution would ensure proper governance and networking between the community members to leverage each other and march forward with improved speed and productivity.

Poor alignment between organization’s innovation dynamics and sustainability

Non Profit Organizations(NPOs) experiment with novel ways to effectively solve social problems, but their innovation dynamics cannot come at the cost of sustainable development. Sustainable development can only be achieved through relentless continuity. It is essential to track progress through collaborative networking with KPIs set to strike a balance between innovation and sustainability.


We have seen some of the common challenges that cripple the functioning of NPOS. Let us now find out how strategic Management by Objectives (MBO) fit into the scheme of things, and how it can help NPOs navigate through some of these potholes.

Let us understand what an MBO is and what it offers an NPO.

What is an MBO?

MBO is defined as a management practice which aims to increase organizational performance by clearly defining the goals and subordinate objectives of organization that are agreed to both management and employees


MBO improves the motivation of personnel by setting specific goals and objectives to go after. It increases commitment and facilitates better communication between employees and management. It allows members to see their accomplishments as they achieve their objectives thus, helping reinforce a positive and work-friendly environment. MBO is a result-driven approach that ensures everyone has a sense of direction and no one gets lost in the middle. It was popularized by Peter Drucker in his book “The Practice of Management.”

How does MBO apply to an Non Profit Organization(NPO)?

Much like public service institutions the resources of Non Profit Organizations are also people, and the outputs are rarely “things”. While KPIs and KRAs are usually built around concrete numbers, the measure of success with NPOs cannot always be quantified. This makes misdirection, either by the individual employee or by the administrator both easy and hard to detect. MBOs can help play a vital role in streamlining this aspect.


Peter Drucker cites the American Farm Policy as an example in his book “Nonprofits and the Public Sector.” The overarching objective of the policy was to strengthen the American farmer since its inception to the New Deal Days.


However, the objective was so broad that the implications could be anybody’s guess. Did it mean protecting the family farmer? Or did it mean making the American farmer efficient, productive, and capable of world market competition? The policy draft employed rhetoric to indicate that the purpose of farm policy was to protect and preserve the small family farmer. However, the actual measures were aimed at making farming a more efficient, more productive, and more competitive industry, in which the small family farmer has practically no role to play. 


MBO will help Non Profit Organizations streamline their operations by clearly defining employee goals and tying it together with the overarching organizational objectives.


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