Magnolia Therapeutic Solutions Case Study

Magnolia Therapeutic Solutions is a well known nonprofit that provides psych new(prenominal)apeutics for clients with Post Traumatic Syndrome Disorder (PSTD). Magnolia contributed some(prenominal) hours of intensive help to the victims of 911. In return NYC gave the nerve a large impart to help it endure the demands of PSTD work. bloody shame Stewart, the founder of the organization believed that the grant given in 2001 would be renewed in 2002 as well. Much to her surprise the grant was non renewed. The grant was already factored into her calculate for 2002 and she had to go pole and revise the cypher.bloody shame was $500,000 short and in turn had to lay off one ternion of the employees. My Decision Versus the Boards The board of directors chose to approve the budget, based on Marys 2001 budget and financials. My decision would suffer been the complete opposite. The decision I would dedicate do was to ask Mary for documents backing up the proposed budget. Mary made th e budget based on her grants and fund ski tow from 2001. She did not take into consideration that the grant may not give way been renewed.If she had made a lower budget, or crimsoning a back up budget, she would have had an alternative contrive if NYC did not renew the grant. I made the decision I did because Marys 2002 budget was made up on monies she was not tear down sure that she would have. Mary even based the development department raising more money on a grant she was not even sure would be offered to the organization. Organizational infrastructure had a large consider on my decision to reject the budget. The policies and procedures that are put into place by an organization are done so to build accountability and coif to internal and external requirements.According to Business Development Group, Inc (1999-2009), Properly utilise policies and procedures prove to be very critical for achieving growth and profitability through the more efficient allocation and utiliza tion of a companys limited resources (para. 3). Causes git the Ultimate Problem There were several causes behind the ultimate conundrums Magnolia suffered. This seems to have stemmed from the lack of accountability and responsibility with the financial oversight. First, Mary had compose a budget based on funds that were not guaranteed.She even based raising money for the organization on higher grants for 2002. Since the 2002 budget was written on false grants, this caused a huge problem and several staff members got laid off. This caused the organization to come to a stand still. This problem could have been solved a few different ways. Either by writing a budget with the grants and funds Mary knew 100% would be available. Or she could have written the budget with the NYC grant and had a back up budget incase it was not renewed. This way the board of directors could have seen either way Mary had a budget that could actually be carried out.Secondly, in 2001 the organization used the remainder of the grant to increase other administrative services. The surplus from the grants in 2001 should have been budgeted into the growing organization and the services provided, not administrative services. The identification of a tender-hearted service powers programs, the creation of a program structure, the assignment of program managers, and the identification of responsibility centers are the basic building blocks of financial management (Martin, 2001, p. 16). main(prenominal) DifferencesThere are several differences in a non-profits inability to din and a for-profits inability to thrive. First, a non-profit groundwork fail in getting revenue by not getting plenty grants and not having exuberant staff. For-profits fail to get revenue by not making enough profit. Secondly, non-profits accrue expenses through program supplies, staffing, bills, and rental space. A for-profit accrues expenses through production, staffing, bills, give out shareholders and owner s, and getting the necessary supplies to keep up with newer products/technology.Lastly, non-profits do not have the resources to pay employees/volunteers for training or higher education. This could result in a nonprofits inability to thrive. Training refer employees is usually part of most for-profit organizations. Money is typically not an issue and organizations that authorize a profit know if they put money into an employees training, the end results go out come back to them. Risk Management Risk management can be defined as the identification, planned control, and reduction of lucks to a mankind service agency (Martin, 2001, p. 187).Magnolias deficit retrieveed because Mary and the organization did not have any risk management set in place. Had the organization had a risk management plan, Mary would have known split up than planning a budget with unknown funds. A formalized risk management program is one of the few ways a human service agency can reduce service delivery be without cutting either staff positions or operating budgets (Martin, 2001, p. 187). If Magnolia had used the all-important(a) tasks of risk management it may have been able to find a way to keep employees or get funding elsewhere.The five tasks are risk identification, risk evaluation, risk control, risk funding, and administration. These tasks are a key component in helping nonprofits thrive. Had Magnolia identified problems or issues that could potentially happen with the budget and shortfalls it could have minimized the outcome. Conclusion Because of Mary Stewart Magnolia had become a nonprofit organization that was helping in such a requisite area, PSTD. Magnolia continued to thrive and receive many awards for the services performed.The organization sure a large 1-year grant from NYC to help 911 PSTD victims. When it came time for Mary to put out the budget for 2002 she included the 2001 1-year grant from NYC. In the end Marys budget caused a deficit in the organization and one ternion of the employees had to be laid off. If there had been a better risk management plan in order this could have been prevented. Also, if Mary had created a budget that was based on grants she knew they would be receiving the organization could have continued providing the brilliant services at the same rate.