CRC Churches International Australia Inc.: mini-charity review

Mini review of CRC Churches International Australia Inc. (CRC), an organisation that seeks donations[1] and is, under one of the names its uses, 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[2]?

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

Is CRC registered?

  • As a charity, yes, but (still) in its former name, Christian Revival Crusade National Council.
  • CRC is a South Australian incorporated association (number A1283).
  • CRC operates, per the ACNC Register, throughout Australia.
    • It is (still) not registered to fundraise in any of the six states that have a licensing regime applicable to charities.[3].
    • It (still) doesn’t have the registration required to do business interstate (an ARBN).

What do they do?

  • ‘About’ on the website says that
    • CRC Churches International, previously known as The Christian Revival Crusade, is an established pentecostal (sic) denomination that started in Australia, has expanded throughout the Asia Pacific, and now encompasses a global vision.
  • More specifically, these are its ‘departments’:
    • Evangelism
    • ‘Missions’
      • This department has its own website.
      • It trades under the name CRC Missions International, but this name is still not registered.
    • ‘Training’
      • This department, CRC Training, also has its own website.
      • It also uses the name CRC College of Ministry. CRC Training is not a registered name, but CRC College of Ministry is.
    • Ministry to Youth
    • Ministry to Children
    • Church Planting’
  • For what they did in 2017, see the Annual Report. (What they did in 2017 should be in the AIS 2017. However, just as they did in 2015, they reported their vision and mission, not activities and outcomes.)

Does CMS-T share the Gospel?[4]

  • 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?

  • In the Consolidated Financials, and noting their limitations (see Financial Report 2016, below), the two ‘Donations’ items total 38% of expenses. Defining ‘direct’ as these expenses means that ‘administration’ is 62%.

Do they pay their board members?

  • The CMS-T governing document does not prohibit this.
  • There is insufficient disclosure of expenses to conclude on board members’ fees.

Can you get a tax deduction?

  • No

Is their online giving secure?

  • Other than a donation to a project in the shop, online giving is not available. It is stillcoming soon’.

Is their reporting up-to-date?

  • Yes (lodged four and a half months after their year-end, six weeks earlier than last year).
    • But if you are considering a large donation, I would ask for full accounts for the year ended 30 June 2017 (see below), and an update.

Does their reporting comply with the regulator’s requirements?

  • AIS 2017: No
    • What they did in 2017 should be in the AIS 2017. However, just as they did in 2015, they reported their vision and mission, not activities and outcomes.
    • Two of the names under ‘Other Name(s) are incorrect, and their one business name is missing.
    • The totals in the ‘Comprehensive Income Statement summary’ do not agree with those in the Consolidated Financials.
    • No Financial Report for 2017 is attached.
  • Financial Report 2017[5]: Like last year, no.
    • There is no report where one should be lodged.
    • There is a ‘Financial Report’ in the Annual Report that has been lodged under ‘Charity’s Documents’, but
      • There is but a single page giving the figures for CRC.
        • No proper financial statements.
        • Summary information only.
        • Without headings.
        • No prior year figures.
        • No Notes
        • No ‘Responsible Persons Declaration’
      • The audit report, by Con Markou, MA Partners[6] Chartered Accountants, is on a financial report that is not included in the ‘Financial Report’.
        • The report that he audited was missing two of the four required financial statements.
        • The ‘Financial Report’ also includes
          • A Balance Sheet and an Income & Expenses (sic), with no Notes, that exclude two of the ‘departments’ (see above).
          • A Balance Sheet and an Income & Expenses (sic), with no Notes, for one ‘department’ of CRC, CRC Missions International.
        • A non-compliant audit report on CRC Missions International by David Wilder CA, WMC Accountants[7].
        • A Statement of Financial Position and a Statement of Profit or Loss & Other Comprehensive Income, with no Notes, for one ‘department’ of CRC, CRC College of Ministry.
        • A non-compliant audit report on CRC College of Ministry by Paul Fox, CPA, of Super Audit Services.

What financial situation was shown by that Report?

  • In the Consolidated Financials, and noting their limitations (see Financial Report 2016, below),
    • The surplus was 12% of revenue.
    • ‘Employment expenses’ are 11% of total expenses.
    • 60% of the liabilities are non-current loans payable; there are only $2K of non-current assets.
    • The working capital position is strong.

What did the auditor say about the last financial statements?

  • The audit report, by Con Markou, MA Partners[8] Chartered Accountants, includes a ‘clean’ opinion. But it is on a financial report that is not included in the ‘Financial Report’.

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

  • No
    • Two of the names under ‘Other Name(s) are incorrect, and their one business name is missing.
    • ‘Who the Charity Benefits’ is blank.
    • There is no Financial Report 2017.
    • ‘Phone’ and ‘Website’ are (still) blank, but these are not compulsory.

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

  • Missions, bequests and ‘Donation to Colombo Project’.

Where were your (net) donations sent?

  • This is not disclosed.

Who are the people controlling the organisation?

  • Not shown on the website, but from the ACNC Register (under ‘Responsible Persons’):
    • Christopher Carmody
    • Philip Cayzer
    • Greg Jones
    • Ian Miller
    • Trevor Murphy
    • Danny Parker
    • Bruce Sharman
    • Vasilis Vasilakis
    • Hans Voortman
    • Matthew Wyatt
    • There are 11 directorships recorded for the name ‘Ian Miller’, and nine for ‘Bruce Sharman’. 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 CRC’s Ian Miller and CRC’s Bruce Sharman is not a director, you are left with the total being more than a handful, it would be legitimate for you to question whether their ability to discharge their fiduciary responsibilities is threatened.  Especially if they have a full-time job.
  • The Board is responsible to the membership. The constitution says that ‘“Members” means persons holding a National Minister’s Credential, according to clause 5.3.1.4 of this Constitution.’ (clause 3). There are over 400 names listed under ‘Credentials’ in the Annual Report.

To whom are CRC accountable?

 

 

  1. Here, here, and one request in the shop.
  2. I agree with Randy Alcorn [Money, Possessions, & Eternity, Tyndale, 2003] when he says that ‘Any Christian leaders who resist financial accountability make themselves suspect.’ [page 425].
  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.
  6. This should be ‘CMA Partners’.
  7. This should be ‘WMC Accounting’.
  8. This should be ‘CMA Partners’.

Church Missionary Society Victoria Inc: mini-charity review

Mini-charity review of Church Missionary Society Victoria Inc (CMS-V), an organisation that seeks donations 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?[1]

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

Is CMS-V registered?

  • As a charity, yes.
  • CMS-V is a Victorian incorporated association (A0032305D).
  • The organisation of which it is a branch, Church Missionary Society – Australia Limited, is a ‘ministry organisation’ of the Anglican Church of Australia.
  • CMS-V operates, per the ACNC Register, only in Victoria. But calls for donations on its website.
    • It is still not registered to fundraise in any of the six states (including Victoria) that require charities to register. Is this because it believes it is covered by an exemption given to the Anglican Church[2]?
    • Because it only operates in Victoria, it doesn’t need to be a Registered Australian Body. It is though (ARBN 603 583 624).
  • The Register says that it does not operate overseas. This is does not fit with the fact that they have missionaries overseas.
  • No business names are held, so CMS-V should always be using its full name.

What do they do?

Does CMS-V share the Gospel?[3]

  • No.

What impact are they having?

  • Nothing systematic found.

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

  • If ‘Contribution to Church Missionary Society Australia Ltd’ is defined as the money that goes to achieve the impact, then 53% is administration (up from 48% last year).
  • If ‘Grants and donations made…’ in the AIS 2016 is used instead, the percentage drops to 52%. Either way, it is something that deserves an explanation.

Do they pay their board members?

  • The CMS-V governing document does not prohibit this.
  • Board members’ fees are not mentioned in the Financial Report 2016.

Can you get a tax deduction?

  • Not for a donation to CMS-V.
    • Nevertheless, the giving page that they use is, without explanation, the one belonging to Church Missionary Society – Australia Ltd, and it does offer tax-deductible giving[4].

Is their online giving secure?

  • Security is not mentioned.

Is their reporting up-to-date?

  • Yes (lodged 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 16 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: No
    • Several of the figures in the ‘Comprehensive Income Statement summary’ do not match those in Financial Report.
    • The description of ‘activities’ is, except for one sentence that is common to other branches of Church Missionary Society – Australia Ltd, largely about another charity (albeit an associated one).
    • No outcomes are given.
    • The trading name is missing.
  • Financial Report 2016: Like last year, questionable.
    • The directors believe that CMS-V is not a reporting entity. They don’t say why. This choice allows them to make less than a full disclosure about CMS-V’s finances and operations, and is implicitly a statement that any current or prospective user can command the preparation of a financial report tailored to their needs. Given the depth and breadth of their stakeholders, this is not plausible.
    • There is no explanation why the missionaries are not classified as employees (and therefore their expense included under ‘Employee benefits expenses’).
    • Why is the reimbursement of fundraising expenses not a reduction of the expense?
      • Fundraising expenses are not disclosed.
    • There is no explanation for how the ‘Legacy Equalisation Reserve’ works.
    • Like last year, there are many other missing Notes and explanations that, while not individually significant, add up to a picture that is short of that necessary to properly assess CMS-V[5].
      • There is no information on related parties (an ACNC expectation).

What financial situation was shown by that Report?

  • Last year’s surplus of 7% of revenue was doubled.
  • ‘Employment expenses’ are up 18% on last year, and consequently have increased to 32% of total expenses (up from 29% last year).
    • Based on the number of employees declared in the AIS 2016, and assuming part-timers work 50% of full-time hours, and casual employees 10%, this is $70K per employee. It was $48K last year.
  • No obvious concern with financial structure.
  • Financial assets $3.60 m: what is the asset mix for the $3.19 m ‘Investments managed by Perpetual’?
  • Financial assets total $4.08 m, which is 18 months of revenue.
    • There is no explanation given in the financial statements for holding this much. In the Branch Council’s Report, another part of the Financial Report 2016, they say
      • CMS Victoria, through its relationship with CMS Australia, has a commitment to fund CMS Victoria missionaries. While this commitment will be met in part by the ongoing support of our donors, CMS Victoria seeks to hold sufficient financial reserves to cover future missionary commitment payable to CMS Australia. Our current financial reserves are adequate to cover this commitment.
        • Why should past donors support the future unmet needs of missionaries?
  • Contribution to Church Missionary Society Australia Ltd $1.09 m. This covers the payments made to CMS-V’s missionaries.
    • There are 10 missionaries listed on the Church Missionary Society – Australia Limited website under ‘Victoria’, but ‘for security or privacy reason’, this is not all of them.
  • ‘Payment from CMS Australia’ $151K (up from 84K last year), is a reimbursement of fundraising expenses.
    • Unlike last year, this is not the total of fundraising expenses, just a contribution towards them. Just this portion is 6% of revenue (up from 4% for total fundraising expenses last year).
  • The ‘Events income’ of $156K resulted in a surplus of $7K.
  • ‘Investment income’ was $200K on a $3.19 m portfolio. This is a 6.3% return.
  • ‘Employee benefits expenses’, $751K, increased 18% on the previous year.
    • ‘Mission Support’ ($10K). This is unexplained. Is it CMS-V’s giving? It is less than ½% of revenue.

What did the auditor say about the last financial statements?

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

  • Not quite
    • CMS-V has missionaries operating overseas yet ‘Operates in (Countries)’ is blank.
    • The trading name is missing, but trading names are of little import these days.
    • ‘Phone’ and ‘Website’ are blank but the ACNC says that these aren’t compulsory.

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

  • The ‘Give’ menu item goes to the ‘Donation Forms’ page belonging to ‘CMS Australia’. From there the forms give you these options:
    • 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?

  • $1.09 m to ‘Church Missionary Society Australia Limited’ (Note 4).
  • There’s another $10K sent somewhere for ‘Mission Support’.

Who are the people controlling the organisation?

To whom are CMS-V accountable?

 

 

 

  1. I agree with Randy Alcorn [Money, Possessions, & Eternity, Tyndale, 2003] when he says that ‘Any Christian leaders who resist financial accountability make themselves suspect.’ [page 425].
  2. The law in this area is not straightforward 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.
  4. The donations belonging to the other charity are not included either revenue or expenses (Note 4).
  5. Here’s a list:
    • Missing Notes:
      • Critical accounting estimates, judgements and assumptions
      • Contingent liabilities
      • Events after the reporting period
    • The ‘Revenue and Other Income’ Note implies that CMS-V believe that donations collected on their behalf become their monies at the point of collection, e.g. within churches? If so, is this valid?
    • The lack of a heading list for expenses confuses revenue with expenses.
    • ‘Operating’ and ‘non-operating’ is neither a helpful nor a current distinction.
    • Note 2 should show ‘Sales revenue’ and ‘Other revenue’.
    • The item ‘Bequest income ($156K) under revenue confuses bequests received with income on invested bequests.
    • Administration expense is not disclosed.
    • Missing from Note 1:
      • the type of entity (individual, not-for-profit), functional and presentation currency,
      • date the accounts were authorised for issue.
      • which Accounting Standards they complied with.
    • Missing from the ‘Property, Plant and Equipment’ Note:
      • the useful lives adopted
      • policies on the review of the depreciation factors and
      • the derecognition policy
    • Missing from the ‘Employee Benefits’ Note
      • What are these benefits?
      • There is normally a distinction between short-term and long-term benefits.
      • Defined benefit superannuation contributions?
    • Missing from the ‘Goods and Services Tax (GST)’ Note: GST on commitments and contingencies?
    • Missing policy Notes:
      • New, revised or amending Accounting Standards and Interpretations adopted
      • Current and non-current classification
      • Impairment of non-financial assets
      • Fair value measurement

Church Missionary Society Queensland With Northern NSW: mini-charity review

Mini-charity review of Church Missionary Society Queensland With Northern NSW (CMSQN), an organisation that seeks donations[1] 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?

  • I sent them a draft of this review. They responded quickly with some strong claims. These resulted only in the change of a word in a footnote. They stopped communicating before telling me what they wanted published, so I’ve played safe and published nothing.

Is CMSQN registered?

  • As a charity, yes.
  • As a Queensland incorporated association (IA18316) (even though the usual ‘Inc’ or ‘Incorporated’ is absent).
  • CMSQN operates, per the ACNC Register, in NSW and Queensland. But it is still not registered to fundraise in any of the six states (including NSW and Queensland) that required charities to register[2].
  • It is ‘carrying on business’ in NSW, but still it doesn’t have the required registration (an ARBN).

What do they do?

  • The only information available is what they wrote in the AIS 2016. Unfortunately, like last year, only one sentence (in bold) is about CMSQN[3]:
    • CMS workers have continued to serve as co-labourers with over 100 international partners, including churches, schools, universities and Christian organisations, in more than 45 countries around the world. Our partners are involved in ministries that fit our gospel vision and purpose. Our partners have welcolmed (sic) CMS workers into their programs and ministries to share the lasting hope of Jesus Christ with people. We have continued to encourage churches and individuals in Queensland and Northern NSW to get involved in cross-cultural mission. CMS is a deductible gift recipient for provision of overseas aid in several countries, for Aboriginal work in North Australia and in support of St Andrew’s Hall, the CMS training college in Victoria (emphasis mine).

Does CMSQN share the Gospel?[4]

  • 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 ‘Missionary Support to CMS Australia’ is defined as the money that goes to achieve the impact, then 65% is administration (up one percent on last year).
  • If, as CMSQN imply by the two ‘Grants and donations made…’ lines in the AIS 2016, ‘Missionary – Branch Expenses’ and ‘Missionary – Federal Expenses’ should also be included, then the figure drops to 60%.
  • Either way, it is something that deserves an explanation.

Do they pay their board members?

  • The CMSQN governing document does not prohibit this.
  • Board members’ fees are not mentioned in the Financial Report 2016.

Can you get a tax deduction?

  • Not for a donation to CMSQN.
    • Nevertheless, the giving page that they use is, without explanation, the one belonging to Church Missionary Society – Australia Ltd, and it does offer tax-deductible giving.
    • How much of the $1.85 m of donations under revenue belong to this other charity? That amount should not be recorded as revenue.

Is their online giving secure?

  • Security is not mentioned.

Is their reporting up-to-date?

  • Yes (lodged seven months after their year-end, four days before the last day allowed).
    • 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.
    • Two of the figures in the Income Statement do not match those in Financial Report.
    • The description of ‘activities’ is, except for one sentence that is common to other branches of Church Missionary Society – Australia Ltd, largely about another charity (albeit an associated one).
    • No outcomes are given.
  • Financial Report 2016: Like last year, questionable.
    • The directors have avoided having to comply with all the Accounting Standards by saying, without giving any reason, that CMSQN is not a reporting entity. This means that they believe that there are no users, present (including donors who gave a total of $1.85 m), or prospective, who rely on CMSQN’s financial statements. Implausible.
    • The amount collected for tax-deductible funds is collected for another charity yet treated as its own.
    • There is no information on related parties (an ACNC expectation).
    • There are several other Notes missing.
    • Loans from members are usually repayable on demand. Are these any different? Unless an irrevocable authority to defer repayment beyond 12 months is held, ‘Loans from members’ should be classified as a current liability, not a non-current liability.
    • Donations are recognised as revenue when received. Why then is the cash figure $119K greater than the revenue?
    • Dividends are recognised ‘when the right to receive the dividend has been established’. Why then is the cash amount identical with the revenue.
    • Similarly, with interest?
    • The reimbursements in ‘Federal Expense Reimbursement’ would be more correctly shown as a deduction from the expenses rather than as revenue.
    • The ‘Mission Support Fund’ is incorrectly classified in the balance sheet.
    • The Note on ‘Reserves’ does not match the figure in the balance sheet.
    • ‘Bookstore Sales’ and ‘Bookstore Purchases’ are included, but where is the other component(s) of cost of goods sold?

What financial situation was shown by that Report?

  • Last year’s surplus of 12% of revenue was reduced to 1%.
    • Note the qualification to the audit opinion though.
  • The audit fee ($15K) seems comparatively high. And it has increased 10% over last year.
  • ‘Employment expenses’ are 34% of total expenses (up from 31% last year).
  • Even with a reclassification of the ‘Loans from members’ if they are, as usual, repayable on demand, short-term (current) liabilities would continue to be well covered by short-term (current) assets.
  • No obvious concern with longer term financial structure.

What did the auditor say about the last financial statements?

  • The auditor, PKF Hacketts Audit (Liam Murphy signing) was unable to give CMSQN a ‘clean’ opinion. Once again, they qualified the opinion:
    • In common with similar associations, it is not practical to establish control over receipts from donations and other fundraising activities, prior to their entry in the accounting records…
      • So, the practices of CMSQN give us no confidence that all the money that was given to CMSQN made it into the bank account.
    • Hundreds of reviews of Christian charities performed by us similar to this one show that this inability is not shared with similar charities.

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

  • Except for the omission of a trading name that is identical to the legal name, yes.

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

  • Via the Give button in the footer of the CMSQN webpages, you give to Church Missionary Society – Australia Limited:
    • ‘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?

  • The (net) money given for overseas work (AIS 2016), appears to have been sent to ‘CMS Australia’. Beyond that, we are not told.
    • Why not just send your donation to Church Missionary Society – Australia Ltd?
  • The destination of the balance of the money given for local work (AIS 2016) is not disclosed.

Who are the people controlling the organisation?

  • Not shown on the webpages, but per the ACNC Register (under ‘Responsible Persons’), they are:
    • Alison Barlow
    • John Hagidimitriou
    • Martin Hawkins
    • Ronald Herbert
    • Menear John (round the wrong way?)
    • Audrey Jordan
    • Peter Kidd
    • Colin Law
    • Sheila Milton
    • Joy Palmer
    • Maxine Percival
    • Angus Robinson
    • Susan Smith
    • Simon Waller
    • Selena Yen
    • There are 11 directorships recorded for the name ‘Susan Smith’. 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 CMSQN’s Susan Smith 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 her fiduciary responsibilities is threatened.  Especially if she has a full-time job.
  • The Board is responsible to the membership. The number of members is not publicly disclosed.

To whom are CMSQN accountable?

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

 

 

  1. Although CMSQN has no invitation to give on its own webpages on the Church Missionary Society – Australia Ltd site, the invitation to give by the ‘parent’ remains accessible on those webpages.
  2. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions.
  3. This sentence has the same message of the other branches of Church Missionary Society – Australia Ltd.
  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.

Church Missionary Society NSW & ACT Ltd: mini-charity review

Mini-charity review of Church Missionary Society NSW & ACT Ltd (CMSN&A), an organisation that seeks donations[1] 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[2]?

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

Is CMSN&A registered?

  • As a charity, yes.
  • CMSN& A is a charity, according to Note 2 in its Financial Report 2015 (see below), that controls another charity, Church Missionary Society Trust Limited (the Trust).
    • It still hasn’t taken advantage of the ACNC’s group reporting concessions.
    • The Financial Report 2016 of the Trust says that
      • The principal activity of the company during the financial year was to act as Trustee (sic) for [CMSN&A]…and Church Missionary Society – Australia Limited.
      • It is still not explained how this is possible when neither of these entities are a trust.
      • If CMSN&A deems that it controls the Trust, then why not also Church Missionary Society – Australia Limited?
      • The Trust holds the real property of the companies yet there are no properties in its Balance Sheet.
    • CMSN&A is a public company, a company limited by guarantee.
      • It appears to have only one of the two provisions in its constitution necessary for it to omit ‘Ltd/Limited’ at the end of its name.
    • CMSN&A operates, per the ACNC Register, in Australian Capital Territory (ACT) and New South Wales (NSW). It seeks donations online. A licence is not required in the ACT, and CMSN&A is exempt in New South Wales. It has no fundraising licences in the other five states that have a licensing regime applicable to charities[3].
    • It operates overseas, per the ACNC Register, in Aland Islands. There is nothing in their public material to support this entry.
    • It holds no business names, so trading in anything other than its full name is not legal.
  • The Trust:
    • A public company, a company limited by guarantee.
    • Although not shown on its ABN record, it holds five business names, all to do with a bookshop.

What do they do?

  • There is no description on the website, but you can get a very good idea from the Directors’ Report in the Financial Report 2016:
    • Strategy (page 4 of the accounts):
      • To raise awareness of world mission and educate Christian churches in NSW and ACT about the importance of God’s mission in the world.
      • To raise support of those being sent out. This is both financial support through charitable fund raising, and prayer support.
      • To communicate with supporters through letters, videos and publications in order to provide information about the needs of the church worldwide, the opportunities for involvement in world mission and to help people take their place in God’s world mission.
      • Providing resources for individuals and churches interested in finding out more about world mission.
      • To run and promote activities that reach a cross section of church members of all ages and differing circumstances.
    • ‘Principal activities’ (page 4 of the accounts)
      • CMS Summer School. CMS Summer School is an annual week long conference held in Katoomba and attended by up to 3,000 members and supporters of the company.
      • General Committee. This is an elected body of members and meets 5 times per year. As a representative group of our key stake holders, the General Committee gives feedback about the effectiveness of the work that is done in service of our missionaries and supporter base.
      • Youth and children’s camps. These are held each year in Katoomba for primary and secondary school students. The aim is to provide a fun environment where children also learn about God’s work in the worldwide church.
      • Conferences for retirees. These are aimed at older members and supporters.
      • Publications. A number of publications are produced to appeal to a variety of people and provide information on current activities as well as encouraging people to become more engaged with global mission through CMS. These include emails, videos and printed media such as letters, newsletters and magazines.
      • Visiting churches. Missionaries on “home assignment” and staff of the company regularly visit churches, speak at church services and liaise with church leaders.
      • Meetings. Throughout the year, regional meetings are held throughout NSW and ACT to encourage and raise support in more rural regions. Members of staff of the company also meet on an individual basis with any person interested in being sent to serve overseas.
      • Fund raising. Charitable fund raising is carried out throughout the year. This is done mainly through our individual members and supporters as well as churches with whom we have an existing relationship and not by appeal to the general public.
    • Everything above is unchanged from last year.
    • Not mentioned above, but one of the objects is ‘to receive assets which have been held or are held on trust for the Association by [the Trust]’ (clause 4.2, the constitution)[4].
      • The company started in 2011. The Financial Report 2016 shows that many properties are still held by the Trust.
  • The Trust
    • Nothing on the website, but the Trust’s Directors’ Report says that
      • The principal activity of the company during the financial year was to act as Trustee (sic) for Church Missionary Society NSW & ACT Limited…and Church Missionary Society – Australia Limited. The company did not trade on its own account during the year.
      • This is supplemented by a listing of the company’s activities Note 2 in CMSN&A’s Notes to the Financial Statements.
      • Why are there no properties or cash/financial assets balances in the Balance Sheet?
      • The Trust’s Directors’ Report shows four distributions under ‘Support Provided by Trusts’. $12K total.
        • Why then are revenue and expenses zero?
        • And ‘Receipts from trusts’ and ‘Payments to creditors’ $316K in the Cash Flow Statement?
      • Note 3 says that the Trust paid $3K to its auditor. Why is this not in the accounts?

Does CMSN&A share the Gospel?[5]

  • No, not according to the above information.

What impact are they having?

  • No information found. (The performance indicators in the Directors’ Report do not include any impact measures.)

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

  • If ‘Missionary Support’ is defined as the money that goes to achieve the impact, then 35% of expenses go on administration.
  • The Trust had no expenses.

Do they pay their directors?

  • The CMSN&A governing document does not permit this.
  • Directors’ fees are not mentioned in the Statement of Profit or Loss and Comprehensive Income.
  • The Trust had no expenses.

Can you get a tax deduction?

  • No
    • Nevertheless, the giving page that they use, the one belonging to Christian Missionary Society – Australia Ltd, does offer tax-deductible giving.
  • The Trust: No

Is their online giving secure?

  • Security is not mentioned.
  • The Trust: NA

Is their reporting up-to-date?

  • Yes (lodged three days late, seven months after their year-end, and a week 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.
  • The Trust: Yes (lodged three days late, seven months after their year-end, and a week later than last year).

Does their reporting comply with the regulator’s requirements?

  • Annual Information Statement (AIS) 2016: No
    • The ‘Financial Information’ is for the group, not CMSN&A.
    • No outcomes are reported.
    • The trading names are omitted.
    • The Trust: No
      • No outcomes are reported.
      • The trading names are omitted. (How can two of these be the same as those belonging to CMSN&A?)
  • Financial Report 2016: No
    • ‘Profit on disposal of property’ is not an item of ‘Other Comprehensive Income’. The surplus is therefore understated by $395K.
    • Legacies (bequests) meet the definition of revenue. CMSN&A, however, doesn’t record them as revenue, preferring to practice ‘income smoothing’. Revenue is therefore understated by $314K.
    • 19% of the $7.06 m donations revenue was ‘Contributions to Tax Deductible Funds’. As CMSN&A doesn’t have any such funds, this money must have been received for a third party. Such receipts are not revenue.
      • ‘Missionary Support’ is overstated by the same amount.
    • The directors continue to say that CMSN&A has ‘no users who are dependent on its financial statements’. This allows them to prepare the type of statements that do not need to comply with all the Accounting Standards. Elsewhere in the Financial Report they say that CMSN&A has 125 missionaries, 5,717 individual donors, 329 donor churches, and 764 company members. Their decision implies that these thousands of users, plus all prospective users, have the capacity to ask CMSN&A to tailor a financial report to their needs. Implausible.
    • ‘Freehold land and buildings’ total $16.67 m.
      • A large portion of this would be for buildings. Without explanation, the directors have decided to not depreciate buildings, a contravention of the Accounting Standards. The asset is therefore overstated, along with the surplus.
        • Despite this, the directors declare in the Directors’ Report that ‘adequate provision has been made by the Branch for depreciation, maintenance and replacement of fixed assets’.
      • All bar one of the properties were subject to an independent professional valuation in 2016. However, although stated to be ‘at fair value’ in the accounts, the valuations of these properties have been arbitrarily, and without explanation, reduced by 10%.
      • Without explanation, the directors have decided to include two properties that are owned by the Trust.
    • The ‘Related Party Transactions’ Note (Note 16) does not mention the transactions and balances with Church Missionary Society – Australia Limited.
    • ‘Prepayments’ have been incorrectly included as ‘Cash flows from financing activities’ in the Statement of Cash Flows.
    • The Directors’ Declaration does not cite the ACNC Act.
    • The Trust: Because of its size, no Financial Report was required. Its submission was voluntary, and therefore did not need to comply with the ACNC’s requirements.
      • Where are the properties that are shown in the group accounts?

What financial situation was shown by that Report?

  • Ignoring any adjustment required (see above),
    • Surplus as a percentage of revenue was increased from negative 1% to positive 1%.
    • Consolidated ‘Cash and cash equivalents’ plus ‘Financial assets’ represents nearly nine months’ revenue.
    • ‘Employment expenses’ are 19% of total expenses. For 103 employees.
    • Both short-term and long-term structure are sound.
    • The Trust:
      • No transactions.
      • ‘Receivables’, $14K, matched exactly by ‘Payables’.
      • No employees (AIS 2016).
      • Where are the properties that are shown in the group accounts?

What did the auditor say about the last financial statements?

  • The auditor, Peter Vilimaa, of Manser Tierney & Johnston, Chartered Accountants, 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.
    • The Trust:
      • He gave a ‘clean’ opinion.

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

  • No
    • The Register says that CMSN&A still hasn’t selected an Entity Subtype.
    • There is nothing to suggest that they are operating, as they say on the Register, in Aland Islands.
    • Trading names are missing.
    • The Trust: No
      • The Register says that CMSN&A still hasn’t selected an Entity Subtype.
      • Why is The Trust not operating in the same two states as CMSN& A?
      • Trading names are missing.
      • ‘Phone’ and ‘Website’ are blank, but these are not compulsory.

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 Christian 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’
    • The Trust: NA

Where were your (net) donations sent?

  • To Christian Missionary Society – Australia Ltd:
    • $1.33m donated to four tax-deductible funds.
    • ‘Contributions from Mission Support Fund’, $4.80 m.
    • The Trust: NA

Who are the people controlling the organisation?

  • The people shown here.
  • The same as those listed on the ACNC Register (under ‘Responsible Persons’):
    • Faith Blake
    • Alastair Christie
    • David Clarke
    • Christine McComb
    • Ian McFarlane
    • Robert McPaul
    • Stephanie Menear
    • Gregory Olliffe
    • Malcolm Richards
    • Kathryn Thompson
    • Apart from the two CMSN&A charities, the name ‘David Clarke’ appears on the register for five others.  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 CMSN&A’s Robert Clarke, a full-time Senior Minister, 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 Board is responsible to the membership. There were 764 members at 30 June 2016.
  • The Trust: Five of the above people, plus Ian Miller (from the Register):
    • Alastair Christie
    • Christine McComb
    • Robert McPaul
    • Ian Miller
    • Malcolm Richards
    • Kathryn Thompson
    • The name ‘Ian Miller’ appears on the register for 10 other charities.  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 The Trust’s Ian Miller 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 as appears to have a full-time job as a partner in hunt & hunt lawyers.

To whom are CMSN&A accountable?

  • To the ACNC.
  • As a company, to ASIC.
  • Although not mentioned on their webpage, 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.
  • The Trust:

 

 

  1. Although CMSN&A has no invitation to give on its own webpages on the Christian Missionary Society – Australia Ltd site, the invitation to give by the ‘parent’ remains accessible on those webpages.
  2. I agree with Randy Alcorn [Money, Possessions, & Eternity, Tyndale, 2003] when he says that ‘Any Christian leaders who resist financial accountability make themselves suspect.’ [page 425].
  3. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions.
  4. Even though the Directors’ Report is for the group, the Trust’s activities are not mentioned.
  5. 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.

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.