University of Phoenix
BSHS/373 Financial Management in Human Services
January 24th, 2010
Magnolia Therapeutic Solutions Case Study
Magnolia Therapeutic Solutions is a well known nonprofit that provides psychotherapy for clients with Post Traumatic Syndrome Disorder (PSTD). Magnolia contributed several hours of intensive help to the victims of 911. In return NYC gave the organization a large grant to help it meet the demands of PSTD services. Mary 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 not renewed. The grant was already factored into her budget for 2002 and she had to go back and revise the budget. Mary was $500,000 short and in turn had to lay off one third of the employees. My Decision Versus the Boards
The board of directors chose to approve the budget, based on Mary’s 2001 budget and financials. My decision would have been the complete opposite. The decision I would have made was to ask Mary for documents backing up the proposed budget. Mary made the budget based on her grants and fundraising from 2001. She did not take into consideration that the grant may not have been renewed. If she had made a lower budget, or even a back up budget, she would have had an alternative plan if NYC did not renew the grant. I made the decision I did because Mary’s 2002 budget was made up on monies she was not even 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 affect 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 adjust to internal and external requirements. According to Business Development Group, Inc (1999-2009),...