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Management of Financial Information in Charitable Organizations: The Case of Joint Cost Allocations

Christopher L. Jones
George Washington University - Department of Accountancy

Andrea Alston Roberts
University of Virginia - McIntire School of Commerce

August 2003

Abstract:
Charities that use direct mailings or other activities that combine a public education effort with fundraising appeals must allocate the joint costs related to these activities to programs, fundraising and administration. This study investigates whether charities use joint costs allocations to manage the program ratio - a widely used measure of spending efficiency. Using a hand-collected dataset of 510 organization-year observations from 1992 to 1998, we find evidence that charities use joint costs to mitigate changes in the program ratio.

Keywords: charities, nonprofit, joint costs, earnings management

JEL Classifications: L31, M41, M43, M48

Working Paper Series

Date posted: September 28, 2003 ; Last revised: July 23, 2006

Suggested Citation

Jones, Christopher L. and Roberts, Andrea Alston, Management of Financial Information in Charitable Organizations: The Case of Joint Cost Allocations (August 2003). Available at SSRN: http://ssrn.com/abstract=441284 or doi:10.2139/ssrn.441284

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Contact Information

Andrea Alston Roberts (Contact Author) University of Virginia - McIntire School of Commerce ( email ) P.O. Box 400173 Charlottesville, VA 22904-4173 United States
Christopher L. Jones George Washington University - Department of Accountancy ( email ) School of Business and Public Management Washington, DC 20052 United States 202-994-3529 (Phone) 202-994-5164 (Fax)