The Whip Cancer Walk: A case of real earnings management in the nonprofit sector

• Instructional case in not-for-profit (NFP) accounting.
• Considers impact of accounting on meeting charity monitoring standards.
• Considers “real earnings management” in a nonprofit setting.
• Deals with “net” vs. “gross” reporting of fundraising events.
• Discusses accounting for joint costs of fundraising and public education.

The Whip Cancer Walk case is designed for students currently learning about nonprofit accounting. Based on a real scenario, you are introduced to an organization that reports only the net proceeds from a series of fundraising walks, instead of both the funds raised and the related costs. The case explores the applicable accounting standards and asks you to consider the appropriate accounting treatment. In this case, you will be asked to consider how the accounting treatment of the walks affects the reported financial numbers, and as a result the rating received from Charity Navigator and the ability to pass the Better Business Bureau’s standards for accountability.