Mukti Australia Inc.: mini charity review for donors

Mini charity review of Mukti Australia (MA), as an organisation that seeks donations online. (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?

  • A draft of this review was sent to MA. This prompted a discussion by email that resulted in a couple of changes and the MA comments you see below[1].

Is MA registered?

  • As a charity, yes.
  • Other registrations:
    • MA: As a Victorian incorporated association (VIC A0040914J).
    • MA: As an Australian Registered Body (ARBN 613 315 576), allowing it to trade interstate.
    • MAOAF is a discretionary investment trust[2].
    • The group has staff in Victoria and Western Australia. And other ‘area representatives’ in NSW, Queensland, Tasmania, and South Australia [Annual Report, pages 6,10]. Plus the internet invitation to give (see above).
    • The group uses the names Mukti Australia and Mukti. Neither are registered business names. Apart from the business names legislation, this would appear to contravene section 23 of its enabling legislation (the Associations Incorporation Reform Act 2012), a section that requires the full name to be used ‘in all is notices, advertisements and other official publications’.

What does the group do?

  • Not directly involved in aid and development in India as group material often suggests (for instance page 20 here and ‘Projects’ here), but supporting, primarily with money, overseas work.
    • Ministry comment:
      • ‘Yes – primarily financial support, but also hands on support through volunteers, consultants and Mukti employees who visit India during the year.  We consider this direct involvement.  We also consider assisting with the design, implementation, completion and evaluation of projects direct involvement in aid and development.   As you mention below, we pray, fund, capacity build and serve.  Most of those things don’t directly show in our financial statements. ‘
    • The AIS 2015 describes MA as a funder and supporter of work by an Indian organisation:
      • We partnered with Australians to fund and support the work and objectives of Pandita Ramabai Mukti Mission in India. Specifically, we funded development projects including…
    • And more specifically, under the ’Our Story’ tab:
      • Prayer – We pray for the work of our partners in India and Sri Lanka
      • Funding – We provide funding for development initiatives in India and Sri Lanka
      • Capacity Building – We support our partner staff in India and Sri Lanka
      • Serving – We send Australian volunteers and consultants to serve our partners in India and Sri Lanka with their time and expertise.

Does the group share the Gospel?

  • The grant of tax-deductible status by the Government suggests that the use of the money raised shouldn’t include proselytising.
  • The constitution requires MA to ‘provide aid and relief in a holistic manner’. Although many would argue that for a Christian organisation to minister holistically it would need to share the Gospel in word as well as deed, many others see no problem in excluding the spiritual component.
    • Ministry comment:
      • MA is motivated by the love of God.  We consider acts of service, love and compassion to be ways of expressing this. MA gifts are given in accordance with Australia law and therefore do not directly fund evangelism or church projects but they are administered in India in a Christian context and Australian authorities recognise this. (b) MA’s overseas partner maintains a clear Christian witness and abides by applicable Indian law.’
  • The ‘Who we are’ on the group website restricts the development activity to deeds.
    • The Indian recipient of the Australian dollars is Christian with a mission to provide “Christ centered homes where destitute women and children irrespective of their background are accepted, cared for, transformed, and empowered to be salt and light in the society.”
      • Ministry comment:
        • Our in-country partners operate as Christian organisations and carry out their work in accordance with the laws of their respective countries.  Australian tax deductible dollars are used exclusively to fund development projects consistent with our purpose to provide aid and relief to needy persons.   

What impact are they having?

  • Whether we define the mission as what the group does or what the aid and development work its partners overseas are doing, nothing systematic was found.
    • Ministry comment:
      • Our 2015 AIS indicates that we have:

partnered with Australians to fund and support the work and objectives of Pandita Ramabai Mukti Mission in India. Specifically, we funded development projects including:

– supported the holistic care of vulnerable children and women through a sponsorship program

– renovation of a home for intellectually disabled and mentally ill women

– Education Centre for children of red light district workers

– construction of a second storey in a Junior College (Years 11-12)

– construction of a high school kitchen

– supported a Creative Arts School which teachers (sic) vulnerable young women vocational skills such as sewing and jewellery making

– renovation of a kitchen for a community of blind women

– beautification of the outside are of a home for vulnerable and elderly women

– renovation of a roof of a nursery which cares for abandoned babies

– supported the staff of Pandita Ramabai Mukti Mission with funds and capacity building initiatives

– other small projects such as recreation and musical equipment for vulnerable women and children’

The lives of needy persons in India have been improved as a result of our work.  We believe this to be evidence of having an impact.

  • The Annual Report (page 19) says that ‘In 2015, Mukti fed, clothed, housed, cared for, educated and empowered over 1200 disadvantaged women and children.” The Indian partner did this, not the group – it is not uncommon for the group to mix the two organisations.
    • Ministry comment:
      • Mukti Australia provided resources (including volunteers, expertise and project management support) to help feed, clothe, house, care for, educate and empower over 1200 disadvantaged women and children.  We work closely with our Indian partner towards a common goal.  Our Indian partner does not have the internal resources to do this on its own.  The difference in so many lives would not have been possible if we had not committed our resources too.   We did this together.’  

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

  • MA do not specify the impact (see above) they are seeking, so it is difficult to be definitive about what are direct costs as opposed to the costs of administration.
  • The group incurred expenses of $362K to achieve $367K of ’Overseas project distributions’. (Last year the figures were $333K and $237K.)
    • Ministry comment:
      • By that definition, at the very least the costs of volunteers serving in India (this is what our short term visitor costs are) should be considered charitable services, not administration.  So $292k to achieve $437?  40%  We haven’t applied this understanding below but it could be used to report that our administration costs are lower again.  Donors should be aware that slight changes in understanding can make big differences in this type of analysis.  
  • Under the heading ‘Local Operations’ on page 27 of the Annual Report:
    • Many of our staff costs now related (sic) to directly assisting and keeping our Indian partners accountable with the management of projects funded by our donors. In 2015 we have made accounting changes to record these costs against the larger projects and not against the Australian Office expense. We reduced the administration charge against the projects accordingly. This change in accounting treatment has led to a decrease in local office costs.
    • Presumably this has resulted in the item ‘Employee benefits expense – project management’ $109K.
    • How Australian employees are helping to manage projects in India that are funded by several Mukti International Offices is not explained.
      • Ministry comment:
        • ‘Many projects that we help to manage are funded by Australia alone but we also cooperate and work together with other international offices to help manage joint projects.’
    • If this expense is including as a direct expense, then the figures above change to $252K expenses to deliver $476K. Down to 35% of expenses.
      • Ministry comment: ‘“Project expenses” are also a direct cost – so, from the analysis above actually $154k to deliver $480k.   Down to 24%
      • But this is still well above 27% that is reported in the Annual Report for expenses other than ‘Overseas project costs’, figures that are said to have been ‘extracted from the statutory accounts’.
      • Similarly, ‘Fundraising’ is 1% of expenses in the accounts but 5% in the Annual Report, and ‘Occupancy’ 3% compared to 5%.
        • The reason appears to be that ‘Fundraising’ in the Annual Report includes ‘correspondence costs and travelling with visiting speakers’, something that is separate in the accounts.
    • Note that the 17% figure for ‘Administration’ in the Annual Report (no comparable figure in the accounts) is increased to 22% if one includes, as one commonly does, ‘Occupancy’).

Can you get a tax deduction?

  • Yes. Both MA and MAOAF are Deductible Gift Recipients.

Is the group’s online giving secure?

  • They use an (unnamed) PCI-DSS-compliant international payment gateway provider’, so yes.

Is their reporting up-to-date?

  • Yes (two weeks after the deadline, six and a half months after their year-end).
    • 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 11 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2015: For all intents and purposes, yes. (No answer to question 6.)
  • Financial Report 2015: Questionable
    • The group
      • has grown into an impressive network of employees, area representatives, volunteers and supporters across every state in Australia [‘Who we are’/’Our Story’]
      • in 2015 had
        • over 4000 website visitors
        • 92 new followers on Facebook [page 13, Annual Report].
        • $605K in donations, and
      • at the end of 2015 had
        • 466 ‘new contacts in our database’
        • 526 ‘Facebook Likes’ [page 13, Annual Report].
        • around 572 Australians …sponsoring women and children’ [page 19, Annual Report],
    • Yet the directors say that the group has no users, past or prospective, who are dependent on normal financial statements to make decisions about the group. (The corollary is that any group stakeholder, now and in the future, can ask the group to tailor a financial report for them.)
    • They sell things in a shop but there is still no explanation for the lack of inventory.
    • The group continues not to disclose fundraising expense and administration expense even though they are shown in the Annual Report.

What financial situation was shown by that Report?

  • The surplus as a percentage of income was decreased from 12% to a more typical 1%.
  • ‘Overseas project distributions’ were $367K. This money was sent to Pandita Ramabai Mukti Mission (Mukti Mission on the internet).
    • Pandita must report the receipt of this money to the Indian Government.
    • Two transfers from the group are reported in the year ended 31 March. Translated at the mid-year exchange rate, they totalled $574K.
    • A reconciliation is not possible because Pandita has yet to lodge its 2015-16 return.
      • The Indian organisation held $13K in the bank at 31 March 2015 (the latest disclosure).
  • No obvious concerns with the financial structure.

What did the auditor say about the group’s last financial statements?

  • He gave a ‘clean’ opinion.
    • To take the right amount of comfort from a ‘clean opinion’, please read here and here.

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

  • MA: Not quite:
    • India and Sri Lanka are missing under ‘Operates in (Countries)’.
      • Ministry comment: ‘Mukti Australia Inc partners with organisations in India and Sri Lanka.’
    • The ACNC says that they are overdue in selecting an entity subtype.
      • Ministry comment: ‘The ACNC does not require us to select an entity subtype beyond our current selection of “Public Benevolent Institution’
  • MAOAF: Not quite: India and Sri Lanka are missing under ‘Operates in (Countries)’.

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

  • Donate’
    • ‘The work of Mukti in India or Sri Lanka’
    • ‘Office administration of Mukti Australia’
  • ‘Gift Catalogue’
    • ‘Gifts for India’
      • seven choices
    • ‘Gifts for Sri Lanka’
      • eight choices
  • ‘Buy Our Merchandise’
  • ‘Support A Project’
    • ‘Mooo’kti Dairy Project’
    • ‘Toilets for Families’
    • ‘Wings of Hope Project’
    • ‘The Good Harvest Project’
    • ‘Education Centre in Sangli’
  • ‘Sponsor A Woman’
  • ‘Sponsor A Child’
  • ‘Support Our People’
    • Australian staff
  • The Annual Report records that $20K was received for something that is no longer an option: ‘Indian Support Staff’.

Who are the people controlling the group?

  • The people shown on the website here.
  • And under ‘Responsible Persons’ on the ACNC Register.

To whom is the group accountable?

  • Membership of Missions Interlink claimed in the website footer. Confirmed.
    • Missions Interlink is an organisation that has standards with which MA must comply.
    • The group Annual Report claims that the charity ‘is certified as complying with the Missions Interlink Standards’.  Yes, Missions Interlink have standards[3], but members get their membership renewed if they complete a ‘Member Declaration’ – there is no positive certification.
  • Both charities are also accountable to the ACNC.

 

 

  1. This review replaces the following comment on the site: ‘This review, published on 5 December, has been temporarily withdrawn.  MA told me today (7 December) that when they sent their comments, some ‘for publication’ and others for me, their hope was that we would continue our discussion before the review was published.  Having now been told of that wish, I have reopened the discussion, and I expect to be able to republish the review within the next week.’
  2. Although MOAOF is indeed a trust, this is not the entity type that is usually selected by overseas aid funds.
  3. For one opinion on the strength of this accountability, see the section Activities in this review.

 

International Teams Ministries Australia Incorporated: mini charity review for donors

Mini charity review of International Teams Ministries Australia Incorporated (IT) as an organisation that seeks donations online. (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?

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

Is IT registered?

  • As a charity, yes.
    • Not to be confused with the International Teams Ministries Australia Incorporated as the operator of a PBI. This charity was automatically created by the ACNC to recognise IT’s deductible gift recipient International Teams Australia Sydney Refugee Team.
      • Since IT has not taken advantage of the ACNC’s group reporting concessions, the second charity must submit its own AIS.
  • Other registrations:
    • As a NSW incorporated association (Y2915020).
    • IT operates in Queensland as well as its home state of NSW. It also has an invitation to give on the internet.
      • It does not have the registration necessary, an ARBN, to operate interstate.
      • It has a fundraising licence only in NSW. Six other states, including Queensland, have a licensing regime[1].
    • The name Sydney Refugee Team – on Facebook for instance – is not registered.

What does IT do?

Does IT share the Gospel?

  • Via some of its missionaries, no doubt.

What impact are they having?

  • Nothing systematic found.

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

  • There is insufficient disclosure to make this calculation.

Can you get a tax deduction?

  • No
    • But the ‘Give’ section on the website incorporates the tax-deductible fund International Teams Australia Sydney Refugee Team (see ‘Is IT registered?’, above).

Is IT’s online giving secure?

  • Security is not mentioned.

Is their reporting up-to-date?

  • Yes (two weeks before the deadline, five and a half months after their year-end).
    • 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 11 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2015: No
    • The financial information should be for IT only, not the group.
    • No outcomes are given.
    • A business name is missing.
    • The wrong type of financial statements is given.
    • ‘Employee expenses’ only includes wages.
    • Why aren’t missionaries counted as employees?
    • ‘Donations and bequests’ doesn’t match the Income and Expenditure Statement
  • Financial Report 2015: No
    • The cover has a subheading ‘Consolidating Sydney Refugee Team’, but this is not explained anywhere.
    • The Report is still missing a statement of cash flows.
    • The statement of changes in equity is titled Income and Expenditure Statement.
    • The Income and Expenditure Statement uses a long out-of-date format, and consequently omits ‘Other Comprehensive Income’.
      • There no Notes. For instance, what is the second largest income item, the unusual ‘Global Services Funding’ ($127K).
      • $68K for two full-time and two part-time employees?
    • In the Detailed Balance Sheet –
      • Why ‘detailed’?
      • ‘Web design and development at cost’ an intangible, is misclassified.
      • The non-current ‘Provision for Web site (sic) upgrade’ is questionable as a liability.
    • The number of Notes has been increased from one to three, but this is still well short of the number required.
      • And the two added this year merely duplicate information in the financial statements.
    • The Report again includes an extra statement, again not marked as being unaudited, and again without explanation.
    • The Statement by Members of the Committee is again undated.
    • The Report is still a ‘special purpose financial report’, but the directors again don’t explain why they thought that normal financial statements are not necessary.
    • The inclusion of a Compilation Report tells us that the accounts were prepared by the auditor (reviewer). This person is again Michelle Glossop, a member of the Institute of Public Accountants, working for Parramatta Accountants & Tax Agents.
      • The Compilation Report is again unsigned.

What financial situation was shown by that Report?

  • A deficit of 1% if income was converted into a surplus of 3%.
  • No obvious concerns with the financial structure.

What did the auditor say about the last financial statements?

  • She concluded that
    • ‘Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the financial report of International Teams Ministries Australia (sic) does not satisfy the requirements of Division 60 of the Australian Charities and Not-for-Profits Commission Act 2012 including: (a) giving a true and fair view of the registered entity’s financial position as at 31 December 2015 and of its financial performance and cash flow for the year 12 months (sic) ending on that date and (b) complying with Australian Accounting Standards to the extend (sic) described in the notes; (sic) and division 60 of the ACNC Regulation 2013’
    • Re-read the information above on IT’s financial reporting and make up your own mind on the validity of her conclusion.

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

  • No. There is only one director under ‘Responsible Persons’, and there is one business name missing.

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

  • ‘Where Most Needed’
  • ‘Specific Worker’
    • ‘Other Worker’ + 15 individuals/couples (including four in ‘National Office’)
  • ‘Specific Project”
    • ‘OTHER Project’
    • ‘Nea Zoi, Athens’
    • ‘RenovArte Café, Mexico’
    • ‘Rroma-Workers Network’
    • ‘StreetLight, Sydney’
    • ‘Sydney Refugee Team (tax deductible)’
    • ‘Threads of Hope, Athens’

Who are the people controlling IT?

  • The people shown on the website here.
  • It are still only showing one of these people under ‘Responsible Persons’ on the ACNC Register. And it’s still the Public Officer, a person who is not automatically on the board.

To whom are IT accountable?

  • Membership of Missions Interlink claimed on the website, for instance here. Confirmed.
    • Missions Interlink is an organisation that has standards with which IT must comply[2].
  • IT is 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. For one opinion on the strength of this accountability, see the section Activities in this review.

Citylife Church Inc: mini charity review for donors

Mini charity review of Citylife Church Inc (CC) as an organisation that seeks donations online. (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[1]?

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

Is CC registered?

  • As a charity, yes.
    • Not to be confused with the other organisations with the same name:
      • Citylife Church Incorporated, a NSW association.
      • Citylife Church (a business name of Northern Suburbs Assembly of God)
      • Citilife Church Inc (not registered as a charity)
    • Or with the one with almost the same name:
      • Citylife Church International Inc, a NSW association.
  • Other registrations:
    • As a Victorian incorporated association (A0026171A).
      • CC doesn’t have CityLife Church registered as a business name, so must use its full name. Maybe including its website and its Facebook page?
    • CC doesn’t have any fundraising licences. It is exempt in the state in which it operates. Whether it requires a licence in the other six states that have a licensing regime depends whether they think that seeking donations on the internet is ‘fundraising’.

What do they do?

  • See under ‘Connect’ and under ‘Grow’ in the main menu on the website.

Do they share the Gospel?

  • Yes

What impact are they having?

  • Nothing found.

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

  • The expenses are not classified to allow this calculation.

Can you get a tax deduction?

  • No
    • But under ‘Give’ in the main menu, both ‘Outreach’ and ‘Building’ options are tax-deductible giving. This is because CC is collecting for another charity.

Is their online giving secure?

  • Security is not mentioned on the first page.

Is their reporting up-to-date?

  • Yes (a little over five months after their year-end).
    • 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 eleven months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2015: Almost. No outcomes are given[2].
  • Financial Report 2015: No
    • For a very large church (Melbourne’s largest?), one on multiple sites, and with a large welfare ministry, and a large school, the directors’ claim that CC is not a reporting entity is implausible. Although they do not give any reason for this decision, a decision that results in financial statements that do not have to comply with all the Accounting Standards, what they are effectively saying is that CC has no users, past and prospective, who rely on normal financial statements to make decisions.
    • The Financial Report does not give the full picture of the CC operation. CC has three active ministries that are run via separate charities:
    • There is also Open House Christian Fellowship Inc, a Large charity that is, since 2013, being taken over by CC. Isn’t it also controlled by CC?
      • In the current reporting of this relationship, have all the financial consequences have been included?
    • Only the ‘Board of Elders’ (the committee) is mentioned under ‘Related Party Disclosure’.
    • CC discloses a contingent asset of $4.48 m. A contingent asset is one whose existence is in doubt. That’s not the situation here. Aren’t revenue and assets therefore understated by $4.48 m?
    • Kingdom Investments has lent $6.00 m to Waverley Christian College at call.
      • Why are they classified as being due beyond 12 months?
      • As a public ancillary fund, Kingdom Investments can only help deductible gift recipients. Was the loan made to Waverley’s Building Fund?
    • The presentation of income in the Statement of Income and Expenditure and Other Comprehensive Income is confusing and neither complies with the Accounting Standards nor matches what is shown in the Statement of Cash Flows.
      • CC continue to disclose ‘Revenue for General Reserves & KIF’ ($3.00 m) without explanation. It is the source of the revenue, not its destination that needs to be disclosed here.
      • CC continues to use the acronym ‘KIF’ without explanation.
      • ‘Other expenses’ $847K is broken down, but ‘Ministry expenses’ $1.06 m is unexplained.
      • ‘The unusual ‘Expense from General Reserve ($413K) is still unexplained.

What financial situation was shown by that Report?

  • With the understanding that the Report, without the inclusion of the other subsidiaries, only shows half the picture:
    • The $5.94 m received from Open House Christian Fellowship Inc last year was followed up with another $400K this year.
    • Reserves are $3.55 m less than liquid assets.
    • CC keeps at least $340K of the donations for missions unspent.
    • No obvious concerns with the financial structure.
    • ‘Tithes and offerings’ rose from $8.25 m to $8.43 m, perhaps because members of CC are required to tithe [clause 3.1, the constitution].
    • Consider the effect of the other matters mentioned under the last question.

What did the auditor say about the last financial statements?

  • He gave a ‘clean’[4] opinion. But
    • in continuing with the engagement, he again implicitly agreed with the directors’ decision to produce special purpose rather than general purpose financial statements (see above).
    • See ‘Financial Report 2015’ above.

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

  • Almost – the trading name is not included.

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

  • ‘General’
    • ‘Tithes’
    • ‘General Offering’
    • ‘Church Building Fund’
    • ‘World Impact (Missions)
      • ‘Partnership in Missions’
      • ‘Other’
    • ‘Other’
  • ‘Nations’
    • ‘Partnership in Missions – Missions Worker’
      • ‘Please specify’ (no drop down menu)
    • ‘Partnership in Missions – Other’
      • ‘Please specify’ (no drop down menu)
  • ‘Outreach’
    • (‘Kingdom Investment Fund’) ‘My gift for where most needed’ (Tax-deductible)
  • ‘Building’
    • ‘The Story Building Project’ (tax-deductible)
      • This is said to be tax-deductible through the Kingdom Investment Fund. The Fund, as a public ancillary fund, can only donate to deductible gift recipients. Who is the eligible recipient?

Who are the people controlling the organisation?

  • Not shown on the website, but they listed under ‘Responsible Persons’ on the ACNC Register.

To whom are CC accountable?

  • Not mentioned on the website, but a part of CC, its ‘World Impact Dept (sic)’ is a member of Missions Interlink. (It is strange that membership continues to be in this name, the name of an entity that doesn’t even have an ABN.)
    • Missions Interlink is an organisation that has standards with which members must comply[5].
  • Plus CC is also accountable to the ACNC.

 

 

  1. Of course, accountability and proper governance is vital. Isolated authoritarian leaders cause dysfunction, often leading to abuse and hurt and …”. From a sermon by the Senior Leader of CC.
  2. Plus the trading name, but such names are of no practical effect nowadays.
  3. A third, Citylife Community Initiatives Incorporated, appears to be unrelated to CC.
  4. To take the right amount of comfort from a ‘clean opinion’, please read here and here.
  5. For one opinion on the strength of this accountability, see the section Activities in this review.