Case 2 - PA 410 Economics for Public Administration Case #2...

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PA 410 Economics for Public Administration Case #2 PRICING AND FUNDRAISING AT THE CHILDREN’S MENTAL HEALTH NETWORK The Children’s Mental Health Network, Inc. (CMHN) is a new nonprofit organization. It is dedicated to providing affordable mental health screenings to children in a three-state, highly- urbanized region. Its four founders and Directors began the organization after many years as social workers, during which time they saw that children with treatable emotional problems were left without any intervention, leading to much larger problems down the line. Like all nonprofits, CMHN faces a complicated set of objectives. First, the organization was formed for the express purpose of screening as many kids as possible. Second, it has to stay afloat. Third, being brand new, it would be good to build up a small endowment for special projects and lean times. All this is an especially difficult balancing act because while you (policy analyst) understand that NPOs can and do go out of business when costs chronically exceed revenues, the Directors don’t all understand that all private organizations face this constraint— even charities. CMHN, like most nonprofits, has three major sources of income. Earned income . CMHN plans to charge some nominal fee for service—they know from past experience that when a charity gives its services away free, people tend to value the service at zero. Earned income depends on the demand for the services, of course. Similar services have
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Case 2 - PA 410 Economics for Public Administration Case #2...

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