Recent changes in government policies and practices, especially managed care, have led many nonprofit organizations to embrace collaboration as a competitive strategy. This article presents a case study of a large human service agency that has adopted a management service organization (MSO) model, a type of collaboration particularly suited to handling third-party contracts, at the urging of the founding CEO. A new governance model was also adopted. Using chronology as an analytical approach, the case examines key decisions made by professional and lay leaders during four distinct stages of organizational development. The actions taken by the board of directors to restore financial stability and protect the organization's reputation after learning from the CEO of the existence of a significant deficit demonstrate the need for strategic planning and better communication among all relevant parties involved in a collaboration.

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