The Church Missionary Society – South Australia Inc: mini-charity review

Mini-charity review of The Church Missionary Society – South Australia Inc (CMSSA), an organisation that seeks donations online, and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

For last year’s review, see here.

Are they responsive to feedback?

  • I sent them a draft of this review. Like last year, they did not respond.

Is CMSSA registered?

  • As a charity, yes.
  • CMSSA is a South Australian incorporated association (A1032).
  • CMSSA operates, per the ACNC Register, in South Australia and the Northern Territory.
    • If still doesn’t have the registration required to do business out of South Australia (an ARBN).
    • It’s still not registered for fundraising in any of the six states, including South Australia, that have a licensing regime applicable to charities[1].

What do they do?

  • Unfortunately, the only information available is one sentence, highlighted, in what they wrote in the AIS 2016:
    • CMS workers have continued to serve as co-labourers with over 100 international partners, including churches, schools, universities and Christian organisations, in more than 35 countries around the world. Our partners are involved in ministries that fit with our gospel vision and purpose. Our partners have welcomed CMS workers into their programs and ministries to share the lasting hope of Jesus Christ with people. CMS SANT raises financial and prayer support for this work and encourages churches and individuals in SA & NT to grow in their understanding of and involvement with cross-cultural mission. CMS Australia is a deductible gift recipient for provision of overseas aid in several countries, for aboriginal work in North Australia and in support of St Andrews Hall, the CMS training college in Victoria.

Do they share the Gospel?[2]

  • No

What impact are they having?

  • No information found.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • If the unexplained ‘CMS-A Quota’ is defined as the money that goes to achieve the impact, then 39%[3] is administration (up from 36% last year).

Do they pay their directors?

  • The constitution does not address this question.
  • There is no line item in the Statement of Income and Expenditure suggesting that directors are paid.

Can you get a tax deduction?

  • Not for a donation to CMSSA.
    • Nevertheless, the giving page that they use, the one belonging to Church Missionary Society – Australia Ltd, does offer tax-deductible giving.
    • If these donations are included in ‘Donations Received’ ($1.01 m), then, because they are being collected for a third party, revenue is again overstated.

Is their online giving secure?

  • Security is still not mentioned.

Is their reporting up-to-date?

  • Yes (seventh months after their year-end, a day late – but two months earlier than last year).
    • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 16 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: Like last year, no.
    • Most of the figures in the Income Statement don’t match those in Financial Report.
    • The description of ‘activities’ is largely about another charity (albeit an associated one).
    • ‘CMS SANT’ is not a registered name.
    • No outcomes are given.
  • Financial Report 2016: Like last year, no.
    • For 2016, the ACNC accepts the financial report CMSSA submitted to the state regulator as meeting its requirements.
    • The state regulator’s requirements are that ‘the accounts present fairly the results of the operations of the association for the financial year and the state of affairs of the association at the end of the financial year’ [section 35(2), Associations Incorporation Act 1985].
    • The committee of CMSSA have declared that the accounts meet this requirement. They don’t:
      • Two of the four financial statements normally included are missing.
      • There are no Notes to the accounts.
      • One six-line ‘Asset Statement’ is included in lieu of the required statement of financial position.
      • There are two income statements, neither of which complies with the Accounting Standards, and which give conflicting figures for total revenue and total expenses.
      • The auditor did not, as he says he did, follow the Australian Auditing Standards.
      • Revenue may be overstated by the amount of the donations collected for a third party.

What financial situation was shown by that Report?

  • The contents of the Report – see above – are such that significant doubt is raised as to whether the situation shown is the actual situation.

What did the auditor say about the last financial statements?

  • The auditor, Jeffrey T Byerley, CPA, issued a ‘clean’ opinion.
    • Jeffrey is only qualified to do this audit because of the ACNC’s transitional provisions for reporting by incorporated associations:  the South Australian regulator doesn’t require the audit of CMSSA to be performed by a registered company auditor.
    • Before you decide how much comfort to take from his finding, I suggest that you
      • Read here and here.
      • Re-read the information above under ‘Financial Report 2016’, above.

If a charity, is their information on the ACNC Register correct?

  • Almost – ‘CMS SANT’ is not a registered name.

What choices do you have in how your donation is used?

  • Having been redirected from the CMSSA page to the ‘Give to CMS’ page, that is, to Church Missionary Society – Australia Ltd’s giving page, your choices are:
    • ‘General Missionary Support’
    • ‘General Tax Deductible (sic) Gift’
    • ‘A particular worker’ (with a dropdown listing all the workers)
    • ‘Other’

Where were your (net) donations sent?

  • There is a line item ‘CMS-A Quota’ in the (concise) Income Statement that is 63% of the expenses. Neither element of this term is explained, but ‘CMS-A’ is most likely Church Missionary Society – Australia Ltd.
    • The detailed Statement of Income and Expenditure has no further information.

Who are the people controlling the organisation?

  • Not shown on the webpages, but the ACNC Register (under ‘Responsible Persons’) says it is these people:
    • Edward Alcock
    • David Bassett
    • Martin Bleby
    • Philippa Harris
    • Robert Haynes
    • Andrew Jackson
    • Christopher Jolliffe
    • Barry Lock
    • Naomi Noakes
    • Tamra Purton
    • David Williams
      • The name ‘David Williams’ appears on the register for 30 charities. And the register only covers charities, not all not-for-profits, and of course doesn’t include for-profit organisations.  If after eliminating the charities for which CMSSA’s David Williams is not a director, you are left with the total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.

To whom are CMSSA accountable?

  • Although not mentioned on their webpages, they are accountable as a Member of Missions Interlink.
    • For one opinion on the strength of this accountability, see the section Activities in this review.
  • To the South Australian regulator of incorporated associations.
  • They are also accountable to the ACNC.

 

 

  1. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions.
  2. Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord? [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14.
  3. If the other figure for total expenses is used, the one in the other income statement, the percentage is 41.

SIM Australia: mini-charity review

Mini charity review of SIM Australia (SIM), an organisation that seeks donations online, and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(To see the situation last year, read this review.)

Are they responsive to feedback?

  • I sent them a draft of this review. Unlike last year, they did not respond[1].

Is SIM registered?

  • As a charity, yes.
  • SIM is a public company, a company limited by guarantee.
    • It is permitted to omit ‘Ltd/Limited’ from the end of its name.
  • SIM has a licence to fundraise in all seven states that have a licensing regime.
  • SIM controls four other organisations:
    • The registered charity SIMaid Trust.
      • It is not mentioned on the website.
    • The registered charity SIMaid Limited.
      • Although the ‘effective date’ of the registration is 4 February 2016, there is no mention of the company in the Financial Report 2016.
      • Its constitution says that it was formed to take over the work of the trust[2]. Has it taken over yet?
      • It is permitted to omit ‘Ltd/Limited’ from the end of its name.
      • The Financial Report mentions only one ‘SIMAID’:
        • SIM Australia is the trustee for an Overseas Aid and Development fund (SIMAID).
    • The unregistered charity International Christian Fellowship, a charity that SIM merged with in 1989 [Financial Report 2016].
    • The registered charity Africa Evangelical Fellowship, merged with in 1998.
      • No explanation is given why these last two charities remain registered 28 and 19 years after being taken over.
      • Like last year, the Financial Report 2016 says that they are dormant. The Annual Information Statement (AIS) 2016 for Africa Evangelical Fellowship confirms this[3], but information on the other charity is not available without paying a fee to ASIC.
    • SIM also includes the figures for all four subsidiaries in its Financial Report 2016. A Note in the Financial Report includes the figures for ‘SIMAID’ (the trust/company), but not those of the other two subsidiaries.
    • SIM still hasn’t taken advantage of the ACNC’s group reporting concessions. This means that its subsidiary continues to be in breach of the law by not lodging its accounts.
    • SIM trades under the name SIM. To do this legally, it needs to register it as a business name. (It is presently registered to somebody else.)

What do they do?

  • See their website, here.
  • More succinctly, in The SIM Effect for 2016:
    • The heart of SIM is mobilising men and women to make disciples and reach those who are living and dying without the Good News. In 2016, 203 SIM Australia missionaries and associates partnered with national believers and churches to share Christ’s love in 30 countries. Thanks to your generosity, $5.4 million was contributed for missionary support and over $1.2 million was contributed for projects expressing Christ’s love to the vulnerable.
      • It appears from the website that the distinction between missionaries and associates is no longer made.

Do they pay their directors?

  • Note 19(a) says not.

Do they share the Gospel [4]?

  • Yes

What impact are they having?

  • Nothing systematic under either ‘impact’, ‘results’ or ‘outcomes’ found on the website.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • There is no line item in the expenses called ‘Administration’.
  • In response to their FAQ on the website, ‘How much does SIM spend on administration and fundraising?’, the answer is 5%:

In our last fiscal year, SIM Australia spent 5% of income on administration and fundraising.’

  • Only by restricting ‘administration’ to the line item they label ‘Administration, Promotion and Fundraising Expense’, $396K, does ‘administration and fundraising’ equal 5% of expenses. Excluded are
    • ‘Personnel Expenses – Other Staff’ $712K
    • ‘Depreciation – included in Admin Expenses’ 92K
    • ‘Amounts Received by or due to Auditors’ $5K
    • ‘Other Expense’ $172K
    • If these four items are included in ‘administration’, the percentage increases to 17%.
    • And what about the unexplained ‘Ministry Fund Expenses’ $491K?

Can you get a tax deduction?

  • No
  • SIMaid Trust: No
  • SIMaid Limited: Yes, both as itself and for a fund it operates, SIMaid Relief Fund.
    • Presumably this is the projects described under ‘SIMaid’.
  • SIM also promotes tax-deductible giving via Steer Incorporated.

Is their online giving secure?

  • After selecting the project or missionaries, the page says, ‘Secure checkout’ and has the Rapid SSL logo. This is only base level SSL security[5].

Where were your (net) donations sent?

  • This is not disclosed.

Is their reporting up-to-date?

  • Yes (lodged five and a half months after their year-end, two weeks earlier than last year).
    • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 13 months ago.
  • SIMaid Trust: Yes (lodged five and a half months after their year-end, two weeks earlier than last year).
  • SIMaid Limited: None required yet.

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: No.
    • The financial information is for the group, not SIM.
    • Payments to missionaries are shown under neither ‘Employee expenses’ nor ‘Grants and donations made…’.
    • No outcomes are given.
    • Their business name, Fa Fa Better World, has been omitted.
    • SIMaid Trust: No
      • No outcomes are given.
      • ‘Project expenses’, $942K, are not shown as ‘Grants and donations made…’.
    • SIMaid Limited: NA (only registered on 4.02.2016.)
  • Financial Report 2016: No.
    • Like last year,
      • The Income Statement does not comply with the Accounting Standards.
      • There are several significant amounts that are unexplained.
      • ‘Missionary Personal Funds’ ($3.38 m received) are included, without explanation, under ‘financing’ in the Statement of Cash Flows.
      • The ‘Closing Balance’ in the Statement of Cash Flows does not match (by a long way) the amount for ‘Cash’ in the Balance Sheet.
      • The Statement of Changes in Accumulated Funds and Reserves diverges markedly from what is required by the Accounting Standards.
      • The accounting for missionaries is not clear.
        • In one FAQ on the website, SIM says that it collects donations on their behalf; in another one it says that they are employees.
      • No depreciation is charged on four of the five properties.
      • Intangibles are incorrectly disclosed.
      • The valuation and disclosure of properties does not comply with the Accounting Standards.
      • Most of the other issues from last year remain[6].
    • The properties that are to be sold (Note 25), have not been classified correctly.

What financial situation was shown by that Report?

  • Ignoring any adjustments that might be required because of the accounting policies disclosed above,
    • The surplus as a percentage of revenue declined markedly, from 6% to almost zero. (This was a return to the 2014 level.)
      • This was due in large part of a 34% increase in the (unexplained) ‘Ministry Fund Expenses’.
    • ‘Cash’ and ‘Financial Assets’ represent 10 months’ revenue.
    • No obvious issues with either short-term or long-term financial structure.
    • 77% of the $7.93 m of financial assets are term deposits held in unspecified ‘Non-Bank Financial Institutions’.

What did the auditor say about the last financial statements?

  • The auditor, Lawrence R Green, FCA, Shedden and Green Partners, issued a ‘clean’ opinion.  Before you decide how much comfort to take from this
    • read about audit opinions here and here.
    • re-read the section above.

If a charity, is their information on the ACNC Register correct?

  • Not quite – their business name, Fa Fa Better World, is missing.
  • SIMaid Trust: No
    • The name is recorded incorrectly.
    • ‘Operates in (Countries)’ is blank.
    • ‘Email’ is blank, but this is not compulsory.
  • SIMaid Limited: No
    • ‘Charity Street Address’ is not a street address.
    • ‘Size of charity’ is blank.
    • ‘Email’ and ‘Website’ are blank, but these are not compulsory.

What choices do you have in how your donation is used?

  • ‘Missionaries’ – 203 of them (AIS 2016)
  • ‘Projects’ – six (four of which are tax deductible)
  • ‘Where Most Needed’
  • ‘Heaven Sent Gifts’ – 14 gifts, 12 of which get you a tax deduction.

Who are the people controlling the organisation?

  • The listing on the website is significantly different from that on the ACNC Register (under ‘Responsible Persons’):
  • The website includes Chris Seddon.
  • Robert Cole’s ‘Position’ is ‘Secretary’. A secretary is not automatically a member of the board, so this may explain, like last year, why he is not in the website listing.
  • Apart from the three SIM charities, the name ‘Robert Cole’ appears on the register for six others. And the register only covers charities, not all not-for-profits, and of course doesn’t include for-profit organisations.  If SIM’s Robert Cole is a director of SIM (see above), and then if after eliminating the charities for which Robert is not a director, you are left with the total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.
  • There are only 14 members of the company, and as the directors are members, there is very limited, if any, accountability by the membership.

To whom are SIM accountable?

  • The answer to their ‘Questions About Donation’, ‘How do I know I can trust SIM with my donation?’, includes this paragraph:
    • SIM Australia is a registered charitable organisation with ACNC as well as members of Missions Interlink. We are independently audited annually by Shedden and Green Chartered Accountants to ensure our finances are in accordance with accounting standards.
    • See the beginning of the review for confirmation of its registration as a charity. See here for the obligations.
    • And here for its Missions Interlink membership.
    • Elsewhere, SIM says that it complies ‘with the standards of Missions Interlink’. See the section Activities in this review for one opinion on the strength of this accountability.
    • As you can see from the Financial Report 2016 section above, the audit by Shedden and Green has not ensured that ‘finances are in accordance with accounting standards’.
  • A second paragraph in the above FAQ says that
    • SIM International perform a bi-annual audit to ensure the financial and operational integrity of SIM offices around the world. These internal audits ensure that all programs are meeting the highest standards of financial accountability and integrity. A complete audit report is presented to the National Director and Financial Director of each office.
    • The value of this to a donor is greatly reduced by the fact that the report is not offered to a potential donor.
  •  As a company, SIM is also accountable to ASIC.

 

 

  1. This was their comment last year: ‘Thank you for sending through your updated review. The review was very helpful in identifying several aspects of our reporting which we agree need to be addressed. We are making appropriate changes. I would also want to reassure you that SIM strives to be completely transparent and positive in our response to feedback. As always we encourage existing and potential prayer and financial supporters of SIM projects and missionaries to direct any concerns, complaints or questions to the National Director.’
  2. The Company, as a subsidiary of SIM Australia, is established to pursue the benevolent purposes of SIM Australia by undertaking overseas aid and development projects previously undertaken by SIM Australia as trustee for SIMAID Fund Trust.”
  3. How it has no equity though, is nowhere explained.
  4. “Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14. 
  5. This link is for education, not as a recommendation of a company or product.
  6. Contact me if you want a list.

Australian Relief & Mercy Services Limited: mini-charity review

Mini-charity review of Australian Relief & Mercy Services Limited (ARMS), an organisation that seeks donations online, and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(To see the situation last year, read this review.)

Are they responsive to feedback?

  • They welcome feedback. I can’t see it on the website, but it is invited on page seven of the Annual Reports (sic) 2015-2016.
  • I sent them a draft of this review. The National Director, David Skeat, replied promptly by email, an email which he described as a ‘courtesy response to you to inform you as to how we have actioned your concerns’. However, he did not want any of his comments published. The email also contained a suggestion that I did not understand something; there was no need to change the review because of that suggestion.

Is ARMS registered?

  • As a charity, yes.
    • Its subtype is ‘public benevolent institution’ (PBI).
    • It controls two other charities:
      • Arms (sic) Aid & Relief Fund (AARF).
        • This is a public ancillary fund.
        • ARMS is the trustee.
        • AARF changed its name from ARMS Overseas Aid Fund in June 2016, but the necessary change has not yet been made on the ABN register.
        • There is no mention of this fund on the website, or in the Financial Report 2016.
      • Arms (sic) Gift Fund (AGF)
        • This is a second public ancillary fund.
        • ARMS is the trustee.
        • There is no mention of this fund on the website, and the only reference in the Financial Report 2016 is a very small balance in a bank account.
      • It continues to choose to not take advantage of the ACNC’s group reporting concessions.
  • ARMS is a public company, a company limited by guarantee.
  • It has two registered business names, Australian Mercy and RESCUENET.
    • This means that two of the three names it uses (see ‘Common Questions, here), Australian Relief & Mercy Service and ARMS, are unregistered.
    • The first cannot be used because ARMS does not have the provisions in its governing document that would allow it to omit ‘Ltd/Limited’ at the end of its name.
    • RescueNet is the Australian arm of RescueNet International.
      • I could find no explanation of this activity on the website[1].
  • ARMS also uses several different names overseas (for example, Kids Ark in Timor-Leste.)
  • ARMS uses five word trademarks – see page 85 of the Annual Reports (sic) 2015-2016 – that are held by another entity and used under licence. (You can verify them here.).
  • Although operating, per the ACNC Register, all over Australia, and calling for donations via multiple websites (its own plus Donations.com.au), ARMS doesn’t have a fundraising licence in its home state, New South Wales[2].
  • AARF is an unincorporated entity.
  • AGF is an ‘discretionary investment trust’ (misclassified I think).

What do they do?

  • “Australian Mercy is an Aid and Development Agency that partners with people from all walks of life.” [half way down the Home page].
  • The 20 current projects are shown here.
    • See the Annual Reports (sic) 2015-16 for the previous year’s activity in each.
  • ARMS has operations in several other names:
    • It has a tax-deductible fund with the same name as the former name of AARF, ARMS Overseas Aid Fund:
      • The ARMS Overseas Aid Fund (item 9.1.1) is a public fund established by Australian Relief & Mercy Services Ltd that is used solely for the relief of people in countries that have been declared by the Minister for Foreign Affairs to be Developing Countries [‘Common Questions’].
      • Apart from a reference to ARMS being the trustee, I can find no other mention of this fund on the website. In the Financial Report 2016 the only references are to two bank accounts.
    • It has another entity with an ABN, The trustee for ARMS Overseas Aid Fund.
      • This is not a registered charity.
      • Apart from a statement that ARMS is “the trustee of ARMS Overseas Aid Fund“, I can find no other mention of this fund on the website. The entity is not mentioned in the Financial Report 2016.
    • It runs Buzzoff, a venture without an ABN or a business name.
      • I can find no description of this ministry on the website. (There are some News items.) In the Financial Report 2016 the only references are to a PayPal account.
    • www.myanmar.buzzoff.org
      • I can find no description of this ministry on the website. (Three of the references to Buzz Off in the News section mention Myanmar.) There is no reference to this activity in the Financial Report 2016.
    • The Donna McDermid Memorial Fund, an unregistered charity without an ABN.
      • There doesn’t appear to be a description of this charity on the website, or in the Financial Report 2016.
    • And a website in the (unregistered) name Gold Coin Giving that redirects to ARM.
      • This name is mentioned in neither on the website or in the Financial Report 2016.
  • It operates, per the ACNC Register, all over Australia.
  • And in thirteen (other) countries.
  • The list for AARF and AGF omits Fiji.

Does ARMS share the Gospel?[3]

  • No

What impact are they having?

  • The Annual Reports (sic) 2015-2016 said that ‘impact studies’ are performed, but it appears that the results are not published.

What do they spend outside the costs directly incurred in delivering the above impact, that is, administration?

  • In answer to their ‘Common Question’, ‘What proportion of funds donated to Australian Mercy is absorbed into administration costs?’, ARMS say
    • Very little – As a volunteer organisation Australian Mercy pays no wages to its staff or volunteers.

Australian Mercy does take 5% from all project donations and 10% from all grants and sponsorships in order to help cover the costs of its administration.

  • This 5% and 10% appears to be insufficient to cover administration though – expenses other than ‘Funds to International Programs’ and ‘Domestic Programs Expenditure’ are 25% of revenue.

Do they pay their directors?

  • The ARMS governing document does not permit this. (This is a requirement for participation in the Overseas Aid Gift Deduction Scheme.)
  • From the (unaudited) Income and Expenditure Statement, it appears that ARMS is complying.

Can you get a tax deduction?

  • Yes, both to ARMS itself, and to the fund it operates, ARMS Overseas Aid Fund.
  • AARF: Yes
  • AGF: Yes
  • The website does not distinguish between the three charities.
  • This page says that you can for some projects, not for others.
    • The donations page shows only one that is not eligible, and that is a fund, not a project[4].

Is their online giving secure?

  • Security is not mentioned until the second page, and then only indirectly by the inclusion of the PayPal logo.
  • In answer to their ‘Common Question’, ‘Are financial transactions on this website secure’, ARMS say
    • We use SSL Certificates to offer secure communications by encrypting all financial data to and from the site.
    • They don’t specify the type of SSL security[5].

Is their reporting up-to-date?

  • Yes (lodged five and a half months after their year-end, but one and half months earlier than last year).
    • If you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 16 months ago.
  • AARF: Yes (five months after their year-end, but six months earlier than last year).
  • AGF: Yes (six months after their year-end, the same as last year).

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: No
    • ‘Other income’ does not match what is in the Statement of Financial Performance.
    • The ‘Description of charity’s activities and outcomes’ has nothing that is specifically about 2016, and no outcomes.
    • One business name is missing.
    • AARF: No
      • The ‘Description of charity’s activities and outcomes’ has only a link to ARMS’s Annual Reports (sic) 2015-2016, a report that does not mention AARF.
      • ARMS’s statements are attached.
      • With no revenue and only $40K of expenses, does it really
        • have 51 volunteers?
        • operate in 11 overseas countries?
    • AGF: No
      • The ‘Description of charity’s activities and outcomes’ contains a description of what ARMS does, not AGF.
      • ARMS’s statements are attached.
      • With no revenue and expenses of only $130K, does it really
        • have 51 volunteers?
        • operate in 11 overseas countries?
  • Financial Report 2016[6]: No.
    • The AIS 2016 says that the Financial Report 2016 is ‘consolidated with more than one entity’. But again this year, although the figures appear to include more than those of ARMS, there is no mention of consolidation and, other than incidentally via bank account names, no mention of other entities.
    • The income statement still doesn’t comply with the Accounting Standards.
    • The Directors’ Declaration still doesn’t comply with the ACNC’s requirements.
    • Last year’s long list of missing Notes is still applicable.
    • There is still no disclosure of related parties.
      • The auditor refers to ‘donations and sales to related parties’.
      • There is a very strong relationship with Youth With A Mission (YWAM):
        • Australian Mercy is affiliated with Youth With A Mission Australia (YWAM) and serves as one of its Mercy Ministry (sic) arms. Although Australian Mercy is a separately constituted body, sme members of its Board also serve as members of Youth With A Mission Australia [Annual Reports (sic) 2015-2016].
        • You can see how this ‘affiliation’ works in practice by looking at the websites of individual YWAM centres. For example, Perth, Darwin, and Canberra.
    • An extra two statements are still included without explanation, and without warning that they are unaudited.
    • The Statement of Changes in Equity still doesn’t comply with the Accounting Standards.
    • Once again, the cash balance in the Table of Cash Movements for Designated Purposes’ does not match the balance in the Statement of Financial Position.
    • The constitution (clause 4.(a)) makes two ‘separate and distinct funds’ compulsory, the’ International Fund’ and the ‘National Fund’. There continues to be no mention of either fund in the Financial Report.
    • All the other issues identified last year – see ‘Latest financial report – detail’, here – are still applicable.
  • If ARMS followed through on the promise they made in response to last year’s review – The Australian Mercy Board will look further into the findings of your review to consider any that are in need of attention – then ARMS do not think that any of the above comments are correct (or are taking a very long time to implement changes).

What financial situation was shown by that Report?

  • Last year’s surplus of 3% of revenue was decreased to 1%.
  • The lack of ‘Employee expenses’, in the AIS 2016, matches the declaration, elsewhere in the AIS, that they don’t have any employees.
  • There are no finance costs (a compulsory disclosure) because there is no debt.
  • The unrecognised value of voluntary work is $7.13 m. Based on the declaration in the AIS, this is $140K per volunteer.
    • Last year this figure was considerably less, $78K, largely due to an (unexplained) halving of the number of volunteers (100 to 51).
  • Working capital (current assets less current liabilities) is healthy.
  • Although non-current assets are only 28K, there are no non-current liabilities, so long-term financial structure is sound.
  • These accounts got a qualified audit – and for the same reason as last year.

What did the auditor say about the last financial statements?

  • Again this year, the auditor, Tony Khoury (T A Khoury & Co, Chartered Accountants), has had to qualify his opinion (so no ‘clean’ opinion again). And for the same reason as last year.
  • Given the constraints on comfort from a clean opinion (read here and here), and the other issues in the financial statements (see above), you might question how much comfort is left.
  • The auditor has said that he had to qualify his opinion because for two sources of revenue, ‘cash donations’ and ‘donations and sales to related parties’, ARMS had decided not to establish controls to ensure that all that had been given or earned by the company made it into the bank account.
    • Why is it not practicable for the company to control this cash and ‘donations and sales’? Most other companies can – directors please read this.
  • The auditor has again
    • allowed non-compliant financial statements without comment.
    • omitted one of the four compulsory financial statements from the scope of his audit.
    • allowed, without comment, and unmarked, two non-audited statements in the Report.
    • not headed his opinion paragraph ‘Qualified opinion’.
    • not mentioned the ACNC Act.

If a charity, is their information on the ACNC Register correct?

  • ARMS: One business name, RESCUENET, is missing.
  • AARF: No
    • The selection of a charity subtype is long overdue.
    • The Financial Report 2016 they’ve lodged is not theirs.
  • AGF: No
    • The selection of a charity subtype is long overdue.
    • The Financial Report 2016 they’ve lodged is not theirs.

What choices do you have in how your donation is used?

  • ARMS’s governing document requires that “All solicitations for donations by the Company shall clearly indicate whether the amount is solicited for the International Fund or the National Fund” [clause 4(b)].
  • But this is no longer followed. The options are now
    • ‘As Needed’
    • Six Australian offices
    • Six funds
    • 14 staff (singles/couples)
    • 19 overseas projects
  • All options are said to be tax-deductible except for one fund. Even donations to the staff.

Where were your (net) donations sent?

  • This is not disclosed.
    • Even in the unaudited Income and Expenditure Statement, a statement with considerably more detail than the Statement of Financial Performance, the description is ‘National Office’ (84%) or one of the other offices.

Who are the people controlling the organisation?

  • The people shown here.
  • And on the ACNC Register (under ‘Responsible Persons’):
  • AARF: The same nine people are the responsible persons.
  • AGF: The same nine people are the responsible persons.

To whom is ARMS accountable?

  • In answer to their FAQ ‘What kind of accountability is there for funds handled by ARMS?’ ARMS claim that
    • As a Public Benevolent Institution Australian Mercy is required by Australian law to submit to a yearly audit of all its financial dealings to the Australian Government.
      • It is not its PBI status that means that ARMS must be audited, but its status as an ACNC registered charity of a certain size.
      • The ACNC does not routinely check the Financial Reports submitted to it.
      • It does though have ongoing obligations to the ACNC.
      • The ACNC’s ‘Charity Tick’ is used on the website in support of you giving to them.  And rightly so, because it would be unwise to give to a charity that is unregistered.   The ‘tick’ also means ARMS’ AIS is not overdue, and no compliance action has been take against it.
      • On the same page as the ‘charity tick’, ARMS shows the ACNC logo. This is not permitted. (Nor, probably, is the display of the Australian Government logo.)
    • As a signatory to the ACFID Code of Conduct, Australian Mercy has all its books audited once a year to the standard laid out in the code.
      • The Code merely requires a ‘qualified independent auditor’. The ACNC requires a higher standard of auditor.
    • All audits are submitted to the Australian Securities and Investment Commission (ASIC) and other peak bodies such as ACFID and Missions Interlink for their perusal and comment.
      • As a charity, ARMS submits, and has done for the last few years now, its financial report to the ACNC, not ASIC.
        • As a company, it is still accountable to ASIC for some things though.
      • Membership of ACFID confirmed.
        • There is no annual assessment by the ACFID of the submission.
      • Membership of Missions Interlink confirmed.
        • The condition of some of the financial reports produced by Missions Interlink members suggests that little or effective compliance work is done by Missions Interlink. See also the section Activities in this review.
      • What other ‘peak bodies’?
    • A synopsis of our audit is published online as part of our Annual Reports.
      • The Annual Reports (sic) 2015-2016 includes the Financial Report 2016. This includes the full audit report, not a synopsis.
  • Omitted from their list is the accountability to their prime regulator, the ACNC.
    • Elsewhere on the site they display the ACNC’s ‘charity tick’.
      • This is used on the website in support of you giving to them.  And rightly so, because it would be unwise to give to a charity that is unregistered.   The ‘tick’ also means ARMS’s AIS is not overdue, and no compliance action has been take against it.
      • But it means no more than this.

 

 

  1. The website doesn’t have a search function, and for some reason Google’s ‘site: australianmercy.org.au xxxxx’ function was not working properly.
  2. It had one, but it expired in 2009.
  3. Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14.
  4. Although this statement, made in the annual report last year, is made again this year, it was no longer accurate:  “During some of the time that these reports cover all our tax deductible international projects were done in partnership with World Relief Australia and only some of our projects were registered as Tax Deductible (sic) with them. With the coming of our own 9.1.1 fund we were able to extend tax deductibility to more of our projects… The  red  and  blue  TD  symbol,  as  seen  on  this  page,  at  the  end  of  the  report  of  an  international  project  indicates  it  is  an   Australian  Mercy  project  that  attracted  tax  deductibility  for  the  year  2014  -­  2015 [Annual Reports (sic) 2015-2016, page 89].
  5. This link is for education, not as a recommendation of a particular company or product.
  6. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports.  To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.

Friends of Indian Evangelical Mission Australia: mini-charity review

Mini-charity review of Friends of Indian Evangelical Mission Australia (FIEMA), an organisation that is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that a donor ask.)

For the last review, see here.

Is FIEMA registered?

  • Not as a charity.
    • This means that, if they are still doing what they were doing at the time of the last review, they are not entitled to any charity tax concessions.
  • Not incorporated.
    • This means that the members are personally liable for the actions of FIEMA.
  • It has an ABN.
  • But is not registered for GST.

What does FIEMA do?

  • The website is not active, but if they are still doing what they were doing at the time of the last review, it’s this:
    • ‘FIEMA seeks to promote the interests of the Indian Evangelical Mission by informing Australian Christians about the work done by IEM missionaries, and raising financial and prayer support for the Mission.’

Do they share the Gospel?

  • If there’s been no change since the last review, then no.

What impact are they having?

  • No website or published documents; the last review found no information on impact.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • No financial information is published, so it is not possible to make this calculation.

Can you get a tax deduction?

  • No

Is their online giving secure?

  • NA – not offered. (Even when they had an operative website.)

What choices do you have in how your donation is used?

  • NA. (None shown on the website when it was operative.)

Is their reporting up-to-date?

  • No reporting by regulatory authorities is required.
  • However, their Associate membership of Missions Interlink requires them to “have available for [their] members and supporters a clear and appropriate financial statement which has been approved by its auditor.”  There’s no operative website (it wasn’t offered when the website was operative anyway), so if you have a legitimate need, ring the only number that I could find on the internet: 02 8677 7558.

Does their reporting comply with the regulator’s requirements?

  • NA

What financial situation was shown in that Report?

  • NA

What did the auditor say about the last financial statements?

  • NA

If a charity, is their page on the ACNC Register complete?

  • NA

Who are the people controlling the organisation?

  • With the demise of the website, all we know is that donations to India from ‘Friends of IEM – Australia’ were sent by ‘Mr Rex Christopher, 8/3 Nelson St., Penshurst, NSW 2222’, in calendar year 2016, and in the first quarter of 2017. Nothing was sent in the second quarter.

To whom is FIEMA accountable?

  • To Missions Interlink, via its Associate membership.
    • For one opinion on the strength of that accountability, see the section Activities in this review.
    • It does not appear, from either the Missions Interlink application documents or the existence of this charity as an Associate, that a charity needs to be registered to be an Associate.

Australian and Asian Missions Association Incorporated: mini-charity review

Mini-charity review of Australian and Asian Missions Association Incorporated (AAMA), an organisation that seeks donations online (but is no longer a member of Missions Interlink). (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(To see the situation last year, read this review.)

Are they responsive to feedback?

  • I sent them a draft of this review. They phoned. At the end of that call they accepted an offer of an extension of time in which to send comments. I did not hear from them again.

Is AAM registered?

  • As a charity, yes[2].
  • As a NSW incorporated association (number Y0660434).
  • AAMA operates as AAMA. It still doesn’t have it registered as a business name[4].
  • But it recently registered the name Christ for India Australia (see Financial Report 2016, below).
  • It operates in Australian, per the ACNC Register, in only its home state, New South Wales. It holds a fundraising licence in that state.
    • Apart from exemptions, whether it needs a licence in the other five states that have a licensing regime for charities depends on whether those states think that AAMA, by calling for donations publicly, are ‘fundraising’ in their State.

What do they do?

  • Generally.
  • Last year (from the AIS 2016):
    • Flood and disaster relief was provided to victims in north-west Myanmar. Children in Myanmar and in South India were sponsored for housing, clothing and education. Clean water projects in Myanmar were funded and installed and maintained. Training seminars were conducted in several countries, with trainers from Australia. In-service training was provided at AAMA summit in Singapore for country field workers August 2015. Pre- and post-natal maternity care, and delivery, was provided for the urban poor in Philippines.
  • AAMA operates overseas, per the ACNC Register, in China, India, Myanmar, Philippines, South Sudan, and Thailand.
    • ‘Where we work’ on the website does not include China.
    • Selecting one of the five countries on that page adds ‘Other locations’ to the list.
      • These locations are still unspecified becausethe security of our partners could be compromised’. This, however, is no reason for not naming the country or countries.

Do they pay their directors?

  • Going on the Profit & Loss Statement, no.

Do they share the Gospel [5]?

  • From what is said under ‘What do they do’, it appears that the Gospel, if it is shared, is done so only incidentally to the good works.
    • Although they have selected ‘Advancing Religion’ as their an ‘Entity Subtype on the ACNC Register, the constitution doesn’t mention religion until the last of six objects (but not Christianity).

What impact are they having?

  • A search on ‘impact’, ‘results’, and ‘outcomes’ on the website gave no results.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • If we define ‘direct’ as ‘Grants and donations…’ (AIS 2016), administration is 4.4% of expenses.
    • AAMA is ‘owned’ by Southside Christian Fellowship Incorporated, has no employees, and is run from the Fellowship’s premises. How much of the cost of running AAM is subsidised by the Fellowship?

Can you get a tax deduction?

  • AAMA say, in the website footer, that ‘Donations $2 & over are tax deductible in Australia’. But this doesn’t match its own statement at the top of the ‘Projects’ page:
    • Many relief & development projects undertaken by AAMA in partnership with indigenous leaders, qualify for tax deductibility.
  • More importantly, it doesn’t the match the information on the government’s ABN Lookup. There’s only a deduction if you donate to AAMA’s fund, Australian and Asian Missions Association.
    • There is no mention of the fund on the website.
    • Presumably this is the ‘Public Fund’ in the financial statements.

Is their online giving secure?

  • NA – no online donation operating at present.

Where were your (net) donations sent?

  • The Profit & Loss Statement gives the names, country by country, of the recipients of grants.

Is their reporting up-to-date?

  • Yes (lodged six months after their year-end, a month later than last year).
    • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 16 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: No.
    • The ‘Other name(s)…’ shown is neither a trading name nor a business name[6]; their business name is missing.
    • Two of the four ‘Revenue/receipts’ figures are incorrect.
    • No outcomes are given.
  • Financial Report 2016: NA
    • Last year, AAMA was a ‘Medium’ charity, with a revenue of $412K. For a reason that is nowhere revealed, this year’s revenue is dramatically less at $94K.
      • Last year, AAMA had to submit financial statements that complied with the Accounting Standards, with either a review or an audit of those statements.
    • This year, because of the size change to ‘Small’, AAMA is not required to submit a Financial Report.
      • It has, however, chosen to submit one anyway.
        • Because it was a voluntary submission, the Report does not need to comply with the ACNC’s requirements. (And it doesn’t.)
    • As a Tier 2 New South Wales incorporated association, AAMA is required to produce financial statements that include:
      • an income and expenditure statement that sets out appropriately classified individual sources of income and individual expenses incurred in the operation of the association
      • a balance sheet at the end of the financial year, that sets out current and non-current assets and liabilities
      • a separate income and expenditure statement and balance sheet for each trust for which the association is the trustee, and
      • details of any mortgages, charges and other securities affecting any property owned by the association.
        • The accounts that AAMA have lodged satisfy the above requirements.
    • Although AAMA’s enabling legislation doesn’t require an audit, its constitution (paragraph 28) does. The Financial Report 2016 includes an audit.
    • So, the accounts are acceptable to both the ACNC and the NSW regulator. But these requirements do not, in this case, ensure that you get the information that the accounting profession thinks that you should get to decide about AAMA. And because AAMA have chosen an auditor who is a member of one of the three professional accounting bodies (he is a Fellow of CPA Australia), you should have got that information. But you didn’t – the Financial Report is again grossly deficient:
      • Two of the four required financial statements are missing.
      • There are no Notes to the financial statements.
        • So, there is no disclosure of the relationship between AAMA and
          • Southside Christian Fellowship. AAMA is the ‘Missions’ arm of the Fellowship – see ‘Missions’ under ‘Ministries’ in the main menu.
          • Glory Reborn. AAMA ‘auspices’ this US organisation[7].
          • A US organisation called Christ for India Incorporated. AAMA say that they ‘partner’ with this organisation, but the recent registration of the business name Christ for India Australia by AAM, and the fact that the two AAM responsible persons are listed as the contact people for an Australian organisation Christ for India, Inc, suggests something closer.
        • There is no explanation for the dramatic change in revenue from last year.
      • There is no directors’ declaration.
        • The auditor should not have signed without one.
      • Neither of the two financial statements included are complaint with the Accounting Standards.
      • There are no figures for last year.

What financial situation was shown by that Report?

  • Given the above issues, no comment.

What did the auditor say about the last financial statements?

  • The auditor, C A Mitchell, of Mitchell & Associates, CPAs, gave a ‘clean’ opinion.
    • Given the state of the accounts (see ‘Financial Report 2016’, above), I wouldn’t give much weight to this opinion[8].

If a charity, is their information on the ACNC Register complete?

  • No
    • Their business name is missing.
    • Is there really only one couple on the board (see below)?
    • ‘Phone’ and ‘Website’ are blank, but these are not compulsory.

What choices do you have in how your donation is used?

  • Child Sponsorship’
    • There is a PayPal ‘Subscribe’ button below the text about India, but the AAMA page it leads to has an error message.
  • ‘Field Worker Sponsorship’
  • ‘Tax Deductibe (sic) Donations’
    • There’s only a contact form for this option, but under ‘Projects’ in the main menu:
      • Relief – four projects
      • Development – nine projects

Who are the people controlling the organisation?

  • Not shown on the website, but from the ACNC Register (under ‘Responsible Persons’):
  • The constitution requires two other office-bearers, a Secretary and a Treasurer, and three other members. AAMA is therefore still five short.
  • AAMA knows that this listing is incorrect (it says so in its AIS 2015), yet still has not corrected it.

To whom are AAM accountable?

  • To the ACNC.
  • And to the New South Wales regulator of incorporated associations.

 

 

  1. The correct name is Australian & Asian Missions Association Inc.
  2. The two responsible persons listed on the ACNC Register for AAMA are two of the five responsible persons listed for the Fellowship.
  3. As the names ‘AAMAA’ and ‘AAMA Pty Ltd’ are in use, an application for ‘AAMA’ is unlikely to be approved.
  4. Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14. 
  5. They have a trading name that should be here, but trading names are of little consequence for charities any longer. (Besides, it is, without ‘Inc’, identical to their legal name.)
  6. There is no mention of this relationship on the Glory Reborn website.
  7. Even without these issues, it pays to understand a ‘clean opinion’. Read here and here.

Barnabas Fund (Australia) Limited: mini-charity review

Mini-charity review of Barnabas Fund (Australia) Limited (BFA), an organisation that seeks donations online, and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(To see the situation last year, read this review.)

Are they responsive to feedback?

  • I sent them a draft of this review. Like last year, they did not respond.

Is BFA registered?

  • As a charity, yes.
  • Registered as a public company, a company limited by guarantee.
    • BFA does not have the necessary provisions in its constitution to allow it to omit ‘Ltd/Limited’ from its name.
    • BFA operates in Australia, per the ACNC Register, in all eight states. And has an internet invitation to donate. However, it does not have a fundraising licence in any of the six states that have a fundraising licensing regime applicable to charities[2].

What do they do?

  • ‘What we do’ on the website is not about Australia, but the international organisation generally. For what they did in Australia in 2016, see the AIS 2016:
    • We raise funds from Christians within Australia which will be directed to Barnabas Aid International, a UK registered charity. The funds will be then directed to over 160 countries where Christians are being persecuted for their faith. We work with Church leaders in the foreign countries which are mainly Islamic to ensure Christians receive aid. Recently we have been working with the Australian Government in assisting refugees arriving from the Middle East by paying for their airfares to get to Australia.
      • Your donation for overseas projects goes through three organisations before it reaches the beneficiaries. You might therefore legitimately ask BFA why it would not be more efficient for you to send your money to at least the UK company.
  • BFA operates overseas, per the ACNC Register, in the ‘Korea (Republic), United Kingdom’. If ‘operate’ includes ‘send money to’, that explains the UK, but Korea?

Does BFA share the Gospel?[3]

  • Unless it does it as part of its ‘Charitable projects Australia’ (a minor part of its work), then no it doesn’t.

What impact are they having?

  • In the link above, the ACNC explains ‘charity impact’ this way:
    • Every charity has a mission that is associated with producing a public benefit. As this mission is pursued, the changes produced in individuals and their communities can be referred to as the charity’s ‘impact’.
    • BFA’s ‘Principal Object’ is ‘to relieve poverty, suffering and distress especially among Christians who are persecuted, oppressed, discriminated against or otherwise suffering for their faith and in so doing proclaim, preach teach, and spread the good news of Jesus Christ throughout the world’ [their constitution]. But they don’t do this themselves. Contrary to the description of their largest expense, ‘Charitable projects worldwide’, BFA is not directly involved in any projects overseas – it merely collects money for ‘Barnabas Aid International. Even there, it is still one organisation removed from ‘impact’.
    • So, even though BFA, via cross directorships with the UK organisation, has a say in the selection of countries and projects, any impact from the use of your money is outside their control.
  • No evidence was found to suggest that BFA is even measuring the impact of its fundraising efforts.

What do they spend outside the costs directly incurred in delivering the above impact, that is, administration?

  • The cost of raising and sending the money for projects is 23% of expenses.

Do they pay their directors?

  • This is prohibited by their constitution.
  • The expenses are not sufficiently disclosed to say if there is a directors’ fee expense.

Can you get a tax deduction?

Is their online giving secure?

  • Security is not mentioned on either the first or second page of the giving process.

Is their reporting up-to-date?

  • Yes (but lodged six months and a half months after their year-end, about the same time as last year).
    • If you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 15 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: No
    • ‘Non-current loans payable’ are $1.17 m, not zero.
    • No outcomes are reported.
  • Financial Report 2016: No. Again this year
    • BFA produced the type of financial statements that do not have to comply fully with the Accounting Standards (special purpose statements). This is based on the directors’ belief that ‘there are no users who are dependent on its general purpose financial reports’. The corollary of this belief is that BFA is saying that any of its ‘stakeholders’, including the thousands of people from all over Australia who together contribute over $5.5 m, are able to command the preparation of a financial report tailored to their needs. This stretches credulity.
    • The charity they control, The Trustee For The Barnabas Relief Education and Development Fund, is not mentioned, let alone consolidated.
    • 11% of the revenue comes from the (unexplained) item ‘Reimbursements from BAI’. The UK company calls this item ‘operation grants’, but if they are actually reimbursements, as described by BFA, then they should be classified as a reduction of expenses, not revenue. Revenue would then be considerably overstated.
    • Despite saying in Note 1 that they depreciate buildings, they don’t. This contravenes the Accounting Standards.
      • Note 6 says that this is because it is too hard, but our first review gave them a simple solution.
    • Borrowings are $1.17 m, which is 69% of assets. They are classified as not being repayable within the next 12 months (non-current liabilities), but the repayment arrangement – ‘not due to be called within the next 12 months’ – does not justify this classification.
      • Our first review pointed out to them that the current-non-current distinction is not about what the lender says; the liability has to be classified as non-current if BFA ‘does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period’ [AASB 101.69, www.aasb.gov.au.]
    • The disclosure of related parties, both the relationships and the transactions, is required for general purpose financial statements, and is an ACNC expectation for special purpose statements. BFA does not disclose them. For instance, the borrowings (see above) are from a related party.
      • This is the disclosure in the UK charity’s accounts:
        • A loan in the sum of A$568,000 (F280,628 when translated)(2014 – 2298,141) to Barnabas Fund (Australia) Ltd is secured on a property occupied by Barnabas Fund (Australia) Ltd. In the event of this property being sold there is an agreement that the sale proceeds will be paid to Servants Fellowship International.
        • During the year a further loan of A$600, 000 (f282,973)was advanced to Barnabas Fund (Australia) Ltd. [Note 9 b) 31.12.15 accounts].
    • ‘Resources’ are sold but there are no inventories in the Statement of Financial Position.
    • The policy for designated donations and bequests is that they are recognised as ‘prepaid income’ (Note 1), but there is no such item in the Statement of Financial Position.
    • A ‘Gain on revaluation of property’ is incorrectly classified as ‘Other income’. It thus affects the surplus when it shouldn’t.
      • It is also incorrectly described as ‘an impairment write up (sic) in Note 6.
        • And such an increase is inconsistent with the policy on impairment in Note 1.
    • It is arguable that all the expenses necessary to raise the money for the ‘Charitable projects’ should be classified as ‘Fundraising expenses’, not just $219K.
      • At a minimum, ‘Travel and deputation’ should be classified this way.

What financial situation was shown by that Report?

  • Last year’s deficit of 1% of revenue was turned into a 2% surplus.
    • This was helped by a (unexplained) 60% increase in the expense ‘Reimbursements from BAI’.
  • But it was not enough though to get ‘Cash and cash equivalents’ to anywhere near the desired three months’ ‘cash operating expenses’ ($330K versus $1.55 m).
    • Given that the policy (Directors’ Report) is to remit to the UK only after this buffer is reached, why wasn’t less remitted?
  • Long-term assets exceed long-term liabilities by only 6%.
  • If the borrowings should be reclassified as current liabilities (see above), the long-term financial structure will be greatly improved, but at the expense of the short-term position. Current liabilities would then be over three times current assets, and the going concern assumption would need to be addressed.

What did the auditor say about the last financial statements?

  • He gave a ‘clean’ opinion.
  • Before deciding how much comfort to take from this finding, I suggest you
    • re-read the section ‘Financial Report 2016, above, and
    • the explanation of an audit here and here.

If a charity, is their information on the ACNC Register complete?

  • Yes
    • ‘Phone’ and ‘Website’ are still blank, but they are not compulsory.

What choices do you have in how your donation is used?

  • The drop-down menu gives a choice between ‘Barnabas General Fund’, and then many, many, projects. You can see a description of each, within 12 categories, here.
    • I would think that such a confusing array of potential projects may increase the chances of donations to ‘Barnabas General Fund’, presumably the fund which allows the charity to choose where to spend the donation.
      • 56% of the donations from Australia were classified as ‘unrestricted’ by the UK charity [UK Charity Commission].

Where were your (net) donations sent?

  • BFA records $4.71 m for the expense ‘Charitable projects worldwide. This money was sent to ‘Barnabas Aid International, a UK registered charity’ [AIS 2016].
    • The latest accounts for this charity are for the year ended 30 April 2016. They show Stg2.49 m coming from BFA. At the mid-point of the year this translates to AUD$5.40 m.
    • Note 7 of the same accounts shows the ‘institutions’ to whom the UK made grants.

Who are the people controlling the organisation?

  • Not shown on the website, but the ACNC Register (under ‘Responsible Persons’), says that it is these people:
    • John Arnold
    • Ian Clarkson
    • Colin Johnston
    • Caroline Kerslake
    • Rosemary Soohkdeo
    • Kakha Tsagareli
    • Anne Willett
    • There are 13 directorships recorded for ‘Colin Johnston’.  The Register only covers charities, not all not-for-profits, and of course doesn’t include for-profit organisations.  Therefore, if after eliminating the charities for which BFA’s Colin Johnston is not a director, you are left with the total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.  Especially if he also has a full-time job.
  • Three of the UK directors are also directors of BFA (Johnston, Kerslake and Sookhdeo).
    • Kerslake is also a director of Servants Fellowship International, the UK charity that has lent money to BFA.

To whom are BFA accountable?

  • To the ACNC.
  • And, as a company, to ASIC.
  • Although not claimed on their website, they are accountable as a Member of Missions Interlink.
    • For one opinion on the strength of this accountability, see the section Activities in this review.

 

 

  1. The Trust is only ‘maintaining web site and potential credit card facilities in preparation of supporting aid projects overseas’ [AIS 2016], so currently the addition would not make a material difference to the picture.
  2. The law in this area is not straightforward – for instance, is an internet invitation ‘fundraising’ – and advice varies, so check with the charity before drawing any conclusions.
  3. Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14.

Australian Indigenous Ministries Inc: mini-charity review

Mini-charity review of Australian Indigenous Ministries Inc (AIM), an organisation that seeks donations online (but is no longer a member of Missions Interlink). (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(To see the situation last year, read this review.)

Are they responsive to feedback?

  • Like last year they did not respond to a draft of this review.

Is AIM registered?

  • As a charity, yes.
  • As a NSW incorporated association (INC9882776).
  • AIM appears to have a company that was set up (and still?) holds its property, Australian Indigenous Ministries Pty Limited.
    • This company does not have an ABN and is not registered as a charity.
  • There is also an unincorporated body with an ABN in the same name as AIM.
    • Which is also not a charity.
  • AIM should be using its full name. It is not doing so on its website.
  • If it’s ‘carrying on business’ outside NSW, as it appears to be, then it doesn’t have the required registration (an ARBN).
  • AIM operates in Australia, per the ACNC Register, in New South Wales, Northern Territory, and Queensland. It is not registered to fundraise in the two that have a licensing regime. Nor in the other four[1].

What do they do?

  • Generally: see the last third of the webpage here.
  • More specifically: see this page.
  • Their answer to ‘Description of charity’s activities and outcomes’ in the AIS 2016: ‘Christian ministry with Australian Indigenous people’.

Do they share the Gospel [2]?

  • Yes

What impact are they having?

  • Search for ‘impact’ and you will some anecdotal reports of impact, but nothing systematic.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • If we define ‘impact’ as ‘Grants and donations made…’, ‘administration’ is 21% of expenses.

Do they pay their directors?

  • There is insufficient disclosure in the AIS 2016 to answer this.

Can you get a tax deduction?

  • No

Is their online giving secure?

  • ‘GoDaddy’ is used, so yes.

Where were your (net) donations sent?

  • There is insufficient disclosure to answer this.

Is their reporting up-to-date?

  • Yes (four and a half months after their year-end, about the same time as last year).

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: Except for the absence of outcomes, yes.
    • They said that they their revenue was less than $250K. This is only true if the unusually large figure reported for ‘Other income’, $264K, is correct.
  • Financial Report 2016: Yes
    • No Report is required of a ‘Small’ charity, and AIM didn’t lodge one voluntarily.
    • AIM must produce audited financial statements under their constitution, so feel free to ask them for a copy.

What financial situation was shown by that Report?

  • No Financial Report, but from the AIS 2016:
    • ‘Total income…’: $499K
    • Of which donations were $17K
    • Zero employee expenses.
      • What happens to the money donated to ‘team members and missionaries’ (see below)?
    • Assets of $4.46 m.
      • Properties? What is the relationship to the company in the same name that was set up to hold properties (see above)?
    • Liabilities $81K

What did the auditor say about the last financial statements?

  • NA

If a charity, is their information on the ACNC Register correct?

  • No – it has more than two committee members.
  • Is AIM really a ‘Small’ charity?
  • ‘Phone’ and ‘Website’ are still blank, but these are not compulsory.
  • By the name of the ‘Governing document’ (under ‘Charity’s Document’), AIM Field Practice 022015, you would think that they had not lodged their constitution. However, it is included in that document.

What choices do you have in how your donation is used?

  • General Donation’
  • ‘Other’ (with a free-form box)
    • ‘Team members and missionaries’ are listed elsewhere on the site.

Who are the people controlling the organisation?

  • Not shown on the website.
  • The ACNC Register (under ‘Responsible Persons’) says that it is only these two people:
    • Stephen Bignall
    • Trevor Leggott
    • Stephen is the Field Director and Trevor the General Director. They are only ex-officio members. The constitution requires that there be at least three other members of the committee. That there are other members is shown in the profiles of the ‘personnel’:
      • Ordinary member, Robert Alley
      • Treasurer, Neil Bootes
      • Chairman, John Keane
      • Ordinary member, Isaac Gordon
      • Ordinary member, Henry Louie

To whom are AIM accountable?

  • To the ACNC.
  • And to the New South Wales regulator of incorporated associations.

 

 

  1. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions.
  2. Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14. 

Medical Mission Aid Incorporated: mini-charity review

Mini-charity review of Medical Mission Aid Incorporated (MMA), an organisation that seeks donations online, and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask[1].)

(To see the situation last year, read this review.)

Are they responsive to feedback?

  • When sent a draft of this review, they…did not respond.

Is MMA registered?

  • As a charity, yes
  • MMA
    • The relationship between CMA, the organisation from which MMA was birthed, and MMA, is not clear:
      • MMA is, at least according to CMS Australia, an auxiliary of CMS Victoria.
      • MMA itself says that it is ‘associated with’ CMS.
    • MMA is a Victorian incorporated association (No. A0042669K).
    • MMA uses three names that it doesn’t have registered:
      • Medical Mission Aid.
      • MMA Op Shop
      • MMA Opportunity Shop
    • MMA operates in Australia, per the ACNC Register, only in Victoria (its home state).
      • MMA has a fundraising licence in its home state, but not in any of the other five states that might require it to have a licence[3].
    • MMA operates overseas, per the ACNC Register, in Kenya, Nepal, and the United Republic of Tanzania.
      • This matches the information under ‘Projects’. (Although, as we will see, the listing covers both charities.)
  • MMAOAF
    • MMAOAF is unincorporated.
    • It operates in the same states and countries as MMA.
    • It has no fundraising licences – but as MMA is the trustee, its registration would probably cover it.

What do the charities do?

  • The website generally treats the two charities as one.
    • There is only two one reference to MMAOAF:
      • DHERSEC as ‘an approved tax deductible project, funded through the MMA Overseas Aid Fund.
    • The bar on the right-hand-side of each webpage covers both charities:
      • Medical Mission Aid Inc is a not-for-profit Christian micro-charity. Our philosophy is based on the biblical teaching of God’s love and compassion in Christ, and the mandate to the church to care for the poor, sick and victims of injustice.
    • The description of the group’s activities and outcomes in the Group AIS 2016, starts ‘MMA’s constitution…’ but describes the activities of both charities.
  • That description goes on to give a good description of what the Group does (but not necessarily what it did in 2016):
    • MMAs constitution sets out six purposes which are fulfilled in the following ways: Purpose 1) MMA provides aid and relief to persons in Nepal, Tanzania and Kenya, which are all certified to be developing countries by the Minister of Foreign Affairs. Purpose 2) To assist needy persons, hospitals and clinics in developing countries by supplying basic medical consumables, capital requirements, staff training and management support by providing the needy persons in the above three countries who are assisted in six hospitals in Tanzania and Kenya through funds to purchase medical supplies and to provide scholarships to train staff. Purpose 3) Through three organisations in Nepal, MMA initiates and participates in development projects which focus on education, health and small business including micro loans. Purpose 4) To provide linkages between communities. MMA raises funds for the improvement of health and education of people in developing countries through promotional programs and literature. Facebook is providing opportunities for communication between both cultures. Purpose 5) To encourage active participation and partnership by people and agencies in developing countries. MMA depends on those people and agencies to identify needs and to plan and budget for those needs. This is done through correspondence between MMA and the involved agencies. Purpose 6) MMAs members and supporters are encouraged to engage with partners through the receipt of regular letters describing the projects.
  • For the current projects see this main menu item. (There is a current project in Kenya that is not described in the ‘Overview’.)
  • But from the Financial Report 2016 (see below) we see that MMA conducts projects independently of MMAOAF.
  • It appears that the aid and development projects (see below) don’t belong to MMAOF, but to another charity:
    • Medical Mission Aid Inc. partners with the World Relief Overseas Aid Fund by acting as its agent for the delivery of aid and development projects [right-hand-side, any webpage].
      • You might ask MMA why it would not be more efficient for you to donate directly to World Relief.

Next year

  • Here is what they said would be changing in 2017 (from the Group AIS 2016):
    • Jitambue, a Swahili word meaning self-realization, is a program for youth who are at risk of sexual exploitation in the rural area of north-west Tanzania. Sexual exploitation leads to large families, teenage pregnancies, maternal mortality and morbidity and poverty. Jitambue is based on the fifth Millennium Goal: to reduce the maternal mortality rate and achieve universal access to reproductive health. Initially begun two years ago, a review of the program showed no positive outcomes. Following a Train-the-Trainer program in November 2016, MMA is hoping for outcomes that will lead to hope, health and life for many teenagers.

Do they share the Gospel [4]?

  • No – neither charity.

What impact are they having?

  • This report is still the only documented impact, on the website, to which MMA had contributed. (I also searched on ‘outcome(s)’ and ‘results’.)

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • The GiveNow page for MMA has a graphic showing that 97% of your donation is spent on ‘Projects’, and 3% on ‘Administration’.
    • The accounts do not support this claim: the MMA and MMAOAF expenses under ‘Administration’ in the Receipts and Payments Account (sic) are twice this percentage of donations.

Do they pay their directors?

  • There is insufficient disclosure in the accounts to answer this.

Can you get a tax deduction?

  • Yes, both charities.

Is MMA’s online giving secure?

  • There is no mention of security on the first two pages of the giving process.

Where were your (net) donations sent?

  • This is the only information:
    • MMA
      • ‘Medical Grants’: $28K
      • ‘Sponsorship – Tanzania: $6K
      • ‘Sponsorship – Nepal’: $14K
      • ‘Nepal Psychiatrist’: $20K
      • ‘Nepal School Rebuild’: $10K
      • ‘B D Schol Project’: $17K
      • ‘Mvumi Doctor’: $4K
    • MMAOAF
      • ‘Nepal Disabled’: 64K

Is their reporting up-to-date?

  • Yes (but one month late, seven months after their year-end).
    • If you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 15 months ago.

Does their reporting comply with the regulator’s requirements?

  • Group AIS 2016:
    • It says that the Group lodged a financial report with the state regulator. But the regulator requires a report for the association on its own.
  • Group Financial Report 2016[5]:
    • This Report is again this year, despite being reviewed by a Chartered Accountant, severely deficient.
    • As part of its ‘transitional reporting requirements’, the ACNC will accept the report that a Victorian incorporated association submits to the Victorian regulator.
    • The ACNC doesn’t say, but it seems reasonable to think that their expectation is that such a report will comply with that regulator’s requirements.
    • However, the Medical Mission_ACNC GROUP’s Financial Report 2016 does not comply with those requirements:
      • It is a report of that covers both MMA and MMAOAF, not just the association.
        • The Victorian legislation requires full information about MMAOAF to be included in the Notes, not consolidated with the figures of the trustee.
      • Note 1 says that ‘The committee has determined that the association is not a reporting entity (sic) and therefore there is no requirement to apply Accounting Standards and other mandatory professional reporting requirements.’
        • Not only is this implication untrue, but the Victorian legislation makes it clear that the Accounting Standards are very much required:
          • ‘Financial statements must contain:

income and expenditure (Income Statement) for your association’s financial year

assets and liabilities (Balance Sheet) at the end of its financial year

other documents required by accounting standards, such as a cash flow statement

notes to the account, which must include:

information required by the accounting standards

information necessary to give a true and fair view

information required by the provisions of the Act and its regulations.’

    • The Report is (again) missing two of the four required financial statements.
    • The statements are not described as consolidated financial statements.A cash statement of flows is (again) provided rather than an accrual-based statement.
    • The committee members (again) do not say why they think that MMA is not a reporting entity, and therefore subject to the lower disclosure standards of special purpose financial statements.
      • They are effectively saying that there are no users, either present or prospective, who are dependent on the standard type of financial statements, general purpose financial statements. For an organisation with760+ Supporters around Australia’, this lacks credibility.
    • The Notes (again) consist of just three accounting policy Notes, and six Notes in all, to explain the statements.
    • The review, by Chartered Accountant Mark John Unwin, is again, despite a change of auditor, not compliant with the Australian Auditing Standards:
      • He makes no reference to the need for consolidated financial statements.
      • His ‘Conclusion’ talks about ‘its cash flows’ yet there is no Cash Flow Statement included in the Report.
      • He is OK with all the deficiencies identified above.

What financial situation was shown by that Report?

  • Given the condition of the Report, no comment.

What did the auditor say about the last financial statements?

  • This is a review, not an audit, something that is acceptable for a ‘Medium’ charity.
  • The auditor, Mark John Unwin, Chartered Accountant, of M.J. Unwin & Associates, issued a ‘clean’ opinion.
    • Mark is only qualified to do this review because of the ACNC’s transitional provisions for reporting by incorporated associations:  the Victorian regulator doesn’t require an audit for an association of MMA’s size. (For the size recorded by the ACNC, ‘Medium’, it requires an audit, not a review.)
    • Before you decide how much comfort to take from his finding, I suggest that you re-read the information above under ‘Financial Report 2016’.

If a charity, is their information on the ACNC Register correct?

  • The Group: No
    • ‘Medium’ is the size of neither charity, so the size should be ‘Small’.
  • MMA: No
    • The size should be ‘Small’.
    • Under ‘Other Name(s)’, Medical Mission Aid Inc is not another name for MMA.
    • No AIS or Financial Report was required for 2016.
    • ‘Phone’ is blank, but this is not compulsory.
  • MMAOAF
    • The size should be ‘Small’.
    • The name is MMA…, not Mma.
    • Under ‘Other Name(s)’, Medical Mission Aid Overseas Aid Fund is not another name for MMA.
    • ‘Phone’ is blank, but this is not compulsory.

What choices do you have in how your online donation is used?

  • None

Who are the people controlling the two charities?

To whom are the two charities accountable?

  • The ‘Missions Interlink Member’ logo is shown on each webpage. Membership, , in MMA’s name, confirmed.
    • The effectiveness of this accountability by Missions Interlink is threatened by the fact that one of the responsible persons, Pamela Thyer, is National Director of Missions Interlink, and the person who investigates complaints.
    • For one opinion on the strength of the Missions Interlink accountability, see the section ‘Activities’ in this review.
  • Both charities are accountable to the ACNC.
  • And MMA to the Victorian regulator of incorporated associations.

 

 

  1. MMA has, under the heading ‘Resources’ in the website footer, a section ‘Giving Wisely’. This leads to the GiveNow’s advice on this subject, including a section ‘How to evaluate an organisation’. There is nothing in this review that is inconsistent with that advice.
  2. Still this way on the Register. An ACNC mistake?
  3. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions.
  4. “Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14. 
  5. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports.  To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.

Pioneers of Australia Inc.: mini-charity review

Mini-charity review of Pioneers of Australia Inc. (PoA), an organisation that seeks donations online, and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(To see the situation last year, read this review.)

Are they responsive to feedback?

  • I sent them a draft of this review before publication. Like last year, they…did not respond.

Is PoA registered?

  • As a charity, yes.
    • You (still) would not know it from their entry in the ACNC Register, nor from their accounts, but the people who run PoA also run another four charities, all with the same directors, the same office, and the same email addresses:
  • You would have to read the privacy statement on the website to the finish for an explanation of the group. This confirms the connection between PoA and PMF, and adds other unspecified entities to the mix:
    • “Pioneers” refers to Pioneers of Australia Inc, Pioneers Ministries Foundation and other entities of the Pioneers consortium.
      • ‘Consortium’ is not a grouping recognised by the ACNC. It allows group reporting, but PoA has not taken advantage of this. (Nor, if the relationship is the other way around, has PMF.)
  • PoA doesn’t consolidate, that is incorporate the transactions of the others in its accounts. These other entities are not even mentioned in its Financial Report (see below).
  • Other registrations:
    • As a Victorian incorporated association (A0035283T).
    • The name that it uses for its website, Pioneers Australia, is not a registered business name. Nor is the its name without ‘Inc.”, also used on the website. (It is arguable that PoA’s enabling legislation requires the full name to be used.)
    • It has the registration necessary to operate outside its home state (ARBN 080211730).
    • PoA operates in all six states that potentially require it to register as a fundraiser, and has an invitation to give on the internet. But it has no fundraising licences[1].

What does PoA do?

  • See the ‘About’ page on their website.
    • PoA, per the ACNC Register, says it doesn’t operate overseas. This doesn’t match their statement, on the above page, that they work in partnership with local churches overseas.

Do they share the Gospel [2]?

  • No? (What, if anything, do they do overseas?)

What impact are they having?

  • There are some stories that showing the impact of PoA work, but nothing systematic.

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • Although there is an item ‘Administration’, there is insufficient disclosure about the other expenses to estimate how much administration expense is included in them.

Do they pay their directors?

  • There is insufficient disclosure in the accounts to answer this.

Can you get a tax deduction?

  • No, not per the ABN record.
    • Tax deductible giving is offered via the ‘Give’ page only because PoA is collecting for other charities:
      • Only gifts to Pioneers workers or projects approved by our Overseas Aid and Relief Fund (OARF) can receive tax deductible donations.
        • The charity that is soliciting ‘gifts to Pioneer workers’ is not disclosed.
        • Nor is the relationship between PoA’s 29 employees (AIS 2016) and these ‘workers’.
        • The Fund, formally APCM Overseas Aid and Relief Fund, belongs to Pioneer Ministries Foundation.

Is PoA’s online giving secure?

  • NA.
    • Although there is an online giving facility on the website, it appears from the breakup of their revenue in the accounts (Note 3), that none of the money given online goes to PoA.
      • Security is not mentioned.

Where were your (net) donations sent?

  • They show zero for ‘Grants and donations made…’ in the AIS 2016.

Is their reporting up-to-date?

  • Yes (six and a half months after their year-end, two weeks earlier than last year).
    • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 15 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: No
    • ‘Donations and bequests’ doesn’t match the accounts.
    • The amount recorded for ‘Employee expenses’ includes ‘ministry’.
    • For a charity with 29 employees and operating throughout Australia, a description of its ‘activities’ as ‘employ, train and facilitate workers in Australia and overseas’, is inadequate.
    • No outcomes are given.
  • Financial Report 2016:
    • There’s no mention of PMF and the other three charities, so if PoA controls them, then, no, it doesn’t comply.
    • Even if control is by one of these other four charities, the relationship should be disclosed:
    • $1.58 m in expenses and 29 employees, but the lack of non-current assets is still unexplained.
    • 97% of revenue are ‘grants’. There is still no explanation of this item, an item that is counter-intuitive for a Christian charity that is ‘advancing religion’.
    • There is no explanation for the non-standard item ‘Employment & Ministry’ (71% of expenses).
    • We now know that last year’s unexplained ‘PI levy’ is an ‘International contribution’ ($161K). But to whom and for what?
    • Employee benefits liability is still incorrectly disclosed.

What financial situation was shown by that Report?

  • For at least the last three years, the surplus has been less than 1K.
  • ‘Employment and ministry’ rose from 67% of revenue to 71%.
    • The relationship between this item and the standard descriptor ‘Employee benefits expense’ is not given.
  • There are no non-current assets (without explanation).
    • This suggests that part of the financial picture is missing.
  • Non-current liabilities are $46K, but the negative long-term position is more than covered by the positive working capital.

What did the auditor say about the last financial statements?

  • The auditor, Joel Hernandez, of rdl.accountants, issued a ‘clean’ opinion.
    • Joel is only qualified to do this audit because of the ACNC’s transitional provisions for reporting by incorporated associations:  the Victorian regulator doesn’t require the audit of PoA to be performed by a registered company auditor.
    • Before you decide how much comfort to take from his finding, I suggest that you
      • Read here and here.
      • Re-read the information above under ‘Financial Report 2016’.

If a charity, is their information on the ACNC Register complete?

  • Not quite – ‘Date Established’ is blank.
  • ‘Phone’ and ‘Website’ are still blank, but these are not compulsory.

What choices do you have in how your donation is used?

  • NA – although there is an online giving facility on the website, it appears from the breakup of PoA’s revenue in the accounts (Note 3), that it is still the case that none of the money given online goes to them.
  • If you are happy to donate to the unregistered ‘consortium’, these are your options:
    • ‘Give to a Global Project’
      • ‘Aid & Relief Projects’
        • 10 projects with Pioneers Ministries Foundation
      • ‘Special Funding’
        • ‘Unexpected needs’
        • ‘The cost of preparing to go overseas’
        • ‘Customised giving to a particular ministry’
      • ‘Ministry Projects’
    • ‘Give to a Pioneer Worker’

Who are the people controlling PoA?

  • Not shown on the website.
  • Per the ACNC Register (under ‘Responsible Persons’):
    • Graham Conway
    • Ian Fryer
    • James Gow
    • Jessica Grozsek
    • Timothy Macready
    • Timothy Meyers
    • Timothy Silberman
    • Judith Simcoe-Fitzmaurice
    • Compared to last year, the same people except that Malcolm Gill and Patrick Lok have gone.

To whom are PoA accountable?

  • Not claimed on the website, but PoA is a member of Missions Interlink, an organisation that has standards with which it must comply.
    • For one opinion on the strength of this accountability, see the section Activities in this review.
  • PoA is also accountable to the ACNC.
  • And to the Victorian regulator of incorporated associations.

 

 

 

  1. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions.
  2. “Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14. 

Praxeis: mini-charity review

Mini-charity review of Praxeis, an organisation that seeks donations on the internet, and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

For the previous review, see here.

Are they responsive to feedback?

  • Before publication, I sent them the review for comment. Like last year, they did not respond.

Is Praxeis registered?

  • Yes, as a charity.
  • Also as a public company (a company limited by guarantee).
    • It is permitted to omit ‘Ltd/Limited’ at the end of its name.
  • Although they don’t mention it, either on their website or in the Financial Report 2016, Praxeis is a ‘mission arm’ of Crossway Baptist Church Inc.
    • The church controls Praxeis but has, without explanation, chosen not to consolidate Praxeis.
  • Praxeis operates, per the ACNC Register, in five states (but not overseas). It appeals for money on its website. It still has no fundraising licences in states that have a licensing regime that is applicable to charities[1].

What do they do?

  • These are their ‘core activities’:
    • continual, passionate and persevering prayer,
      always
      sharing the good news of Jesus with lots of people,
      inviting people to the exciting and challenging journey of
      following Jesus (making disciples),
      creating simple and reproducible
      communities that live out the message of Jesus (simple Church),
      creating a movement of people that virally spread the message and
      multiply.
      These are the things we focus on and do again and again.
  • Although not mentioned under ‘About’, and therefore easy to miss, more specific information can be found under the main menu item ‘hubs’.
  • The description of ‘activities and outcomes’ in the Annual Information Statement (AIS) 2016 is identical to last year, so not very helpful in telling us what they did in 2016:
    • The principal activities of the company during the financial year were sharing the Christian message of Jesus Christ in order to make disciples of Jesus Christ, training Christians to plant churches throughout Australia and the world, assisting the leaders of planted churches to run and grow the church and providing ongoing ministry training, mentoring and support for church ministers and leaders.

Do they pay their directors?

  • There is insufficient public information to say.

Do they share the Gospel [2]?

  • Yes

What impact are they having?

  • There is one incidental mention of ‘impact’ on the website, and nothing in the Financial Report 2016. (There is no mention of the Crossway Annual Report.)

What do they spend outside the costs directly incurred in delivering the above impact, that is, on administration?

  • There is no expense item ‘administration’. All the expenses may include some administration, so there is no clear way to even estimate the figure as defined above.

Can you get a tax deduction?

  • No

Is their online giving secure?

  • PayPal is used, so yes.

Where were your (net) donations sent?

  • The AIS 2016 reports that no grants or donations were made.

Is their reporting up-to-date?

  • Yes (seven months after their year-end, four days before the (extended) deadline, and four days earlier than last year).
    • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 15 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: No
    • The financial statements are not general purpose financial statements, as stated here, but those where the assumption is that anybody interested in the charity can request a financial report tailored to their needs.
    • Outcomes are not reported.
    • There is an item ‘Giving and donation expense’ in the Financial Report 2016, yet nothing is reported for ‘Grants and donations made…’
    • The figure for ‘Other income…’ does not match the same figure in the Financial Report 2016.
  • Financial Report 2016: Questionable[3].
    • The directors’ belief that ‘a special purpose financial report’ is acceptable, a choice that allows them to make less than a full disclosure about Praxeis’ finances and operations, is implicitly a statement that any user is able to command the preparation of a financial report tailored to their needs. That’s all the people who they speak to around Australia and all the donors and potential donors who read the website material. Do the directors realise they are saying this?
    • The relationship between Praxeis and Crossway Baptist Church is close, and Praxeis acknowledges that the church is a related party, but the nature of the relationship is not identified.
    • The note in Note 10 (‘Other liabilities’) says that donations are received and passed on to ‘staff’. This suggests that revenue is overstated by the amount received for these staff (money received for a third party is not revenue).
    • The money yet to be paid to staff is treated in three different ways:
      • Note 10 says that the liability ‘General support’, ‘relates to staff support donations to be paid to exiting staff.’
      • The ‘Staff Support Reserve’ ‘are funds donated to the ministry from which salaries have not been paid at year end.’
      • Note 12 says that there is a contingent liability for ‘staff support donations made to ministry staff from which salaries have not been paid at year end.’
      • The relationship between the employees (19 in the AIS 2016) and workers to whom you can give is not explained.
    • 93% of the revenue is in three items the meaning of which is not explained.
    • The second largest expense (after ‘Employee benefits expense’) is the unexplained ‘Ministry expense’ (the entire charity is a ‘ministry’).
    • The ‘Provisions’ Note just repeats what is in the statement. Are these employee benefits?
      • If so, why are there more employee benefits separated in ‘Other liabilities’?
    • ‘Other comprehensive income’ is missing from the Statement of Changes in Equity.

What was the financial situation shown by that Report?

  • Revenue increased this year by 19%; however, ‘Employee benefits expense’ increased by 30% (rising from 82% of expenses to 86%).
  • This contributed to a decline in the surplus as a percentage of revenue from 11% to 7%.
  • Note 1 (i) reports that some of the cash given to ‘ministry staff’ may not have made it into the company’s bank account.
  • Gifts and donation expense is 1% of revenue.
  • The combination of term deposits and ‘Cash and cash equivalents’ represents eight months of revenue (up from seven last year).
  • For a charity with nineteen employees, and revenue of $925K, why is ‘Property, plant and equipment’ only $3K?

What did the auditor say about the last financial statements?

  • The auditor, Peter Shields, Chartered Accountant, of Saward Dawson, issued a ‘clean’ opinion.
  • Before deciding how much comfort to take from this
    • Read here and here to draw the right conclusions from such an opinion.
    • Re-read the ‘Financial Report 2016’ section above.
  • The potential understatement of revenue (see ‘Financial Report 2016’, above), was thought by the auditor to be ‘of such importance that it is fundamental to users’ understanding of the financial report’ [AAS 706, paragraph 6, www.auasb.gov.au], as to warrant a separate paragraph in his report (‘Completeness of Income’).

If a charity, is their information on the ACNC Register correct?

  • Yes

What choices do you have in how your donation is used?

  • The ‘Give’ page implies that there are different purposes and different ‘workers’ that you can give to, but these are not listed anywhere on the website.

Who are the people controlling the organisation?

  • Not shown on the website, but from the ACNC Register:
  • Two of these directors are also directors of Crossway Baptist Church, a related party.
  • Unless Hiew Siong, the Secretary, is a member of the board, he should not be included on the Register.
  • There are 10 directorships in the name ‘James Hall’. And the register only covers charities, not all not-for-profits, and of course doesn’t include for-profit organisations.  Therefore, if after eliminating the charities for which Praxeis’ James Hall is not a director, you are left with the total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.
  • The directors are answerable to the members of the company. But with only six members, and directors required to be members (the constitution), there is no accountability via the membership.

To whom is Praxeis accountable?

  • To the ACNC.
    • Its ‘Charity Tick’ is used on the website in support of you giving to them. And rightly so, because it would be unwise to give to a charity that is unregistered. The ‘tick’ also means Praxeis’ AIS is not overdue, and no compliance action has been take against it.
  • Praxeis is, as they claim, also in support of you giving, a Member of Missions Interlink.
    • Confirmed.
    • See the section Activities in this review for one opinion on the strength of this accountability.
  • As a company, Praxeis is also accountable to ASIC.

 

 

  1. The law in this area is not straightforward – is an internet invitation ‘fundraising’ for instance? – and advice varies, so check with the charity before drawing any conclusions.
  2. “Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14. 
  3. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.