Magnolia Case Study Essay
Magnolia Therapeutic Solutions Case Study Jennifer White BSHS 373 October 15, 2012 Frieda Flowers Magnolia Therapeutic Solutions Case Study Building a non-profit organization is not an easy task. Whether developing a new non-profit department or starting a new organization from the ground up, the process takes time and work. A vital part of this process is the budget. Financial management of a non-profit organization is a science and minor mistakes or overestimations in budget can do long-term damage if the agency is not careful.
The Magnolia Case Study is such an example. Despite numerous awards and rave reviews, a mistake in the budget negated the progress of the agency unintentionally. I feel the board should have reconsidered just exactly what Mary was asking. Magnolia was awarded a grant that was for the year. This grant was not to extend past the year. The board should have considered the changes that would happen within the year. I feel Mary asked for money that wouldn’t be needed for the following year.
That maybe she got a little ahead of herself with her funding request.
Understandable, the city needed the additional help after the trauma of 9/11 but requesting that money for the next year should have been more thoroughly considered. A temporary grant should not be budgeted as permanent funding because the organizational infrastructure can change within the given year. I think, overall, the Magnolia was running smoothly and I wouldn’t have done anything differently except for the budgeting request. I might have also not have hired so many additional counselors and just done my best to make-due with less.
Considering the circumstances of the extra funding I say the Magnolia would have been just as successful treating the clients with Post Traumatic Stress using a lesser amount of employees. Given the funding might not be redeemed for the next year; Mary should have considered having to lay people off if the agency couldn’t afford them for the next year. After spending a year with coworkers, naturally, the remaining staff would feel let down with the lay-offs and morale would suffer. This would transfer over to the clients and the help they receive.
I really feel Mary and the board should have weighed out the consequences of not enough funding when the request was made and approved. I know this is easier said than done when in the moment and trying to accommodate for higher business demands but in the long-run, and with the experience of Magnolia, the possible outcomes should have been foreseen. The main difference between non-profit and for-profit is funding. A non-profit relies mostly on volunteer work and funding from other companies.
Non-profits do not have a revenue or profit at the end of the year but can have extra money left over that hasn’t been used. A for-profit brings in money by charging the clients for the goods and services. Funding from other companies isn’t always necessary for a for-profit because the services are at a cost. However, if either type of agency offers services that aren’t used, then both agencies suffer. A non-profit would lose funding if the agency isn’t being used and a for-profit would lose revenue.
Basically, for either type of organization to thrive the agency has to offer services that are applicable to the needs of the community. It does not matter what type of organization it is, if the goods and services are not useful then the company will suffer. In terms of risk management, Magnolia has to account for new hires, building safety and client safety, etc. The National Council of Nonprofits website states that “Scenario planning is all about looking ahead and spotting opportunities, and threats (2012). Some examples of Magnolia managing risk might include: “When an executive director checks references or confirms the educational background of a potential new staff member, that executive director is managing the risk of hiring the wrong person; when a board decides to set aside money in a reserve account or adopts a fund development plan, it is managing the risk that someday there may not be enough cash on hand to satisfy a need for resources; when a client mentions that there is an icy patch on the sidewalk and the nonprofit immediately deploys someone to remove the ice, risk is being managed; or when a volunteer attends a training, or a board member attends a board orientation, risk is being managed. Risk management opportunities occur in everything staff, board and program volunteers do on a day-to-day basis. In a risk-savvy nonprofit, everyone is a risk manager (2012). ”
Magnolia, like many non-profits, underestimated the importance of the budget and financial management. This is a common error for new agencies. Building, funding, and maintaining a non-profit organization requires an attention to detail that anyone outside of the agency might not understand. Magnolia has the potential to bounce back in the future with the understanding that budget details can make or break a non-profit organization. References Magnolia Therapeutic Solutions Case Study National Council of Nonprofits / Risk Management and Insurance. (2012). Retrieved fromhttp://www. councilofnonprofits. org/resources/resources-topic/risk-management-andinsurance
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