Daya Counselling Centre: Response to Funding Cuts

In early October 2018, the executive director of Daya Counselling Centre had just learned that the Ontario Works program, one of the centre’s major funded-referral programs, was planning a significant change. The executive director was concerned about the impact of this change on the centre’s financial performance. The timing could not be worse. She and the board of directors had been discussing the feasibility of moving the centre from its downtown location in London, Ontario, Canada. Any negative impact on the counselling centre’s financial performance could derail these plans. In addition, she had been planning to approach the board with a proposal to fund a new clinical administrative support position to help her manage the centre’s growth. How could she ask the board to add a new position to the budget if the counselling centre continued to post a deficit?

This case is intended for undergraduate- and graduate-level courses on non-profit management, management accounting, or financial management, where financial projections and budgets are discussed. Before discussing the case, students should be familiar with SWOT (strengths, weaknesses, opportunities, and threats) analysis, be capable of projecting financial statements, and understand the nature of budgets and variance analysis. After working through the case and assignment questions, students will be able to<ul><li>conduct a SWOT analysis to understand the context and implications for the best course of action;</li><li>assess the financial health of the organization to provide information for alternatives;</li><li>prepare an updated forecast of the statement of operations to determine the magnitude of the budget deficit and to support the recommended plan;</li><li>apply qualitative and quantitative analysis tools, including the concept of contribution, to evaluate alternatives; and</li><li>develop a strategic plan to present to the board.</li></ul>

• nonprofit management
• projected financial statements
• financial ratio analysis
• budgets