Magnolia Therapeutic Solutions Case Study Essay

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Magnolia Therapeutic Solutions Case Study Whittni Summerlee
University of Phoenix
BSHS/373 Financial Management in Human Services
Frieda Flowers
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
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First, a non-profit can fail in acquiring “revenue” by not getting enough grants and not having enough 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, paying out shareholders and owners, 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 nonprofit’s inability to thrive. Training key employees is usually part of most for-profit organizations. Money is typically not an issue and organizations that make a profit know if they put money into an employees training, the end results will come back to them.
Risk Management “Risk management can be defined as the identification, planned control, and reduction of risks to a human service agency” (Martin, 2001, p. 187). Magnolia’s deficit happened 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 better 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 costs without cutting either staff positions or operating budgets” (Martin,