Magnolia Therapeutic Solutions Case Study

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Magnolia Therapeutic Magnolia Therapeutic Solution Case Study Elizabeth Meza
February 25, 2013

Magnolia Therapeutic Solution Case Study
Magnolia Therapeutic Solutions is a nonprofit organization in New York City that specializes in psychotherapy for those individuals who suffer with Post Traumatic Syndrome Disorder, also known as PTSD. After the tragedy of 9/11, Magnolia Therapeutic Solutions was given a one year grant to assist any individuals who suffered from PTSD. The following year, the board of directors approved a budget that included the grant from the previous year. This new budget was $2 million dollars. The organization ended up with a shortfall of $500,000 that lead to layoff and negative effects on the organization due to the non-renewal of the grant. The following are questions I have to answer regarding Magnolia Therapeutic Solutions and the decisions they made. * If I was on the board faced with the decision to approve or reject this budget, what would I do? How did my decision compare to the board’s decision? Why did I make the decision I did? What effect did organizational infrastructure and culture have on my decision? * What do I think were the main causes behind the problems that Magnolia ultimately suffered? What would I have done differently to void these problems? * What differences in acquiring revenue, accruing expenses, and training of key personnel are there between a nonprofit organization’s ability to thrive and a for-profit organization’s ability to thrive? * What is Magnolia’s deficit in terms of risk management?

If I had been on the board of directors for Magnolia Therapeutic Solutions, I would have rejected the budget. I would have wanted to see asked two budgets; one including the grant and one not including the grant. The grant was specified as a one-time grant. Expecting the organization to be granted a second one for the following year would put everyone in a difficult position. Having a...
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