990 CASE

Background

For this project, you will compare the tax returns (Form 990) from Big Cat Rescue Corp. and GW Exotic Animal Foundation Memorial Park. These are the two zoos featured in the Netflix hit series “Tiger King”. Carole Baskin is the founder of Big Cat Rescue Corp. and Joe Exotic is the founder of GW Exotic Animal Foundation Memorial Park. You are welcome to use any outside resources or knowledge to aid you in this project. In fact, as a part of the project you will be required to search for some outside resources. If you have not yet watched the series, please do not feel the need to binge watch or feel like you have been disadvantaged. In fact, I have not yet watched the series.

At the beginning of quarantine, “Tiger King” quickly became the most streamed show on Netflix. It has sparked public interest and public discussion. Much of this discussion is centered around who is the victim and who is the aggressor in a bitter feud between the two zoos. The two zoos are implicitly and explicitly compared throughout the series. By comparing the 990’s for the two organizations, our opinion will be better-informed.

Part A) Overall Perceptions of the Returns

1) You have been given three years of 990’s for GW and five years of 990’s for BCR. Quickly scan through the returns and make some initial observations. (1 point)

2) Under what provision of the IRS tax code is BCR exempt? What about GW? Hint: you only need to look at one return for each entity. (1 point)

3) A major component of being a non-profit is the accompanying exemption from federal taxation. Assuming a 35% tax bracket, how much tax would the government have collected from GW per year? What about BCR? (Please show your calculations. If a given year has negative net income, report $0 as the tax collected. Ignore any loss carrybacks or carryforwards.) (1 point)

4) Was the 990 for BCR self-prepared or was it prepared by an external CPA? What about GW? (1 point)

5) Was either BCR or GW audited? (1 point)

6) Based on the evidence gathered in Part B, which organization do you believe has done a better job of completing Form 990? Why? (2 points)

Part B) Governance (7 points)

1) What percentage of voting board members of BCR are independent? What about GW? (1 point)

2) How can a lack of independence affect an organization? (1 point)

3) How can an individual obtain a copy of the 990 of the organization? (1 point)

4) Are Officers and Directors for either BCR or GW compensated? (1 point)

5) Compare the volunteer hours for Officers and Directors between BCR and GW? (1 point)

6) Based on the work performed in Part C, which organization do you believe has a stronger governance structure? Why? (2 points)

Part C) Program Services & Accomplishments (4 points)

1) Look at Part III of the 990’s for Big Cat Rescue Corp for 2015, 2016, 2017, 2018, and 2019. What do you observe about the program accomplishments listed by the organization across time? (1 points)

2) Look at Part III of the 990’s for GW Exotic Animal Foundation Memorial Park for 2011, 2012, and 2013. What do you observe about the program accomplishments listed by the organization across time? (1 points)

3) Based on the work performed in Part D, which organization has given a clearer picture of the charitable work performed? (2 points)

Part D) – Employee Salaries & Wages (5 points)

1) What is the total number of employees at GW? What is the total number of employees at BCR? (1 points)

2) Calculate the average salary per employee at both GW and BCR and comment. (1 points)

3) Make a detailed comparison of Part VII (Page 7 – Compensation of Officers, Directors, etc.) between GW and BCR? Do you have any reason to suspect that the information is incomplete or inaccurate? (1 points)

4) Based on the work performed in Part E, do you have any concerns that BCR and/or GW are not compensating employees fairly? (2 points)

Part E) Financial Position, Revenues, Expenses, and Functional Expenses (12 points)

1) Create a trend of total revenues, total expenses, and total net assets for GW. (3 points)

2) Create a trend of total revenues, total expenses, and total net assets for BCR. (3 points)

3) Pick one year and analyze the schedule of functional expenses for GW. Do all expenses appear to be appropriately allocated? Why or why not? (1 points)

4) Pick one year and analyze the schedule of functional expenses for BCR. Do all expenses appear to be appropriately allocated? Why or why not? (1 points)

5) Either using data from the tax return or external data, provide the approximate number of animals cared for by each zoo. If you use an external source, please provide a reference. (1 points)

6) Using the number of animals from question 5, calculate the average dollar amount spent for the care of one animal for both BCR and GW. Please provide detailed support for your calculations. (1 points)

7) Using external resources, calculate your own benchmark for the annual maintenance of a tiger. Provide support for your calculation. Compare your calculation to the answer in #6. (1 points)

8) How might in-kind contributions affect your answer to #7 for each zoo? (1 points)

Part F) Conclusion (5 points)

1) Based on the totality of work performed in this case, which organization do you believe is more reputable? Why? (3 points)

2) Has the work performed in this case changed your opinion of either BCR or GW? If so, how? (2 points)

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