Mission Enterprises (Victoria) Limited: mini-charity review

Mini-review of Mission Enterprises (Victoria) Limited (MEV) as an organisation that seeks donations online[1], and is a member of Mission Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

For the previous review, in the name Entrust Foundation, see here.

Are they responsive to feedback?[2]

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

Is MEV registered?

  • As a charity, yes.
  • The website is in the name Entrust Foundation, one of MEV’s business names, and a charity itself, The Trustee for Entrust Foundation (The Trustee).
    • The Trustee is a public ancillary fund (and therefore can accept tax-deducible donations). Its trustee is MEV.
    • The Trust is not mentioned on the website. Nor is the fund.
  • The other business name is Entrust Projects.
    • In answer to a FAQ, ‘What is Entrust’s Legal Status?, MEV says that
      • Entrust Projects is for donations that do NOT require a tax receipt. Both funds are subject to external audits, ATO (Australian Tax Office) and ACNC (Australian Charities and Not-for-Profit Commission) regulations and report to the Board of Mission Enterprises (Vic) Ltd.
        • No, Entrust Projects is not subject to this accountability. It is not even a separate entity – it doesn’t even have an ABN – so any accountability is merely part of the accountability that applies to the owner of the name, MEV.
        • The only references to Entrust Projects other than the above, are its use as the organization to contact (on the ‘Contact’ page), and a request for non-tax-deductible donations to be made payable to Entrust Projects.
        • No, Entrust Foundation is not subject to this accountability either. The Trust does have to produce audited accounts, but because of its size, they do not have to be lodged with the ACNC.
  • Don’t confuse MEV with two other charities, Mission Enterprises Blackburn Ltd, and Mission Enterprises Limited.
    • There is a director with the same name as one of the MEV directors, Stuart Brown, serving on the board the second charity. Is there an official connection?
  • Apart from The Trustee, MEV controls another charity, ME Foundation for Aid & Development (MEF).
    • This charity is only mentioned twice on the website, once to describe it as ‘our umbrella Public Benevolent Institute (sic), and once to announce its formation and saying that ‘It operates under the name of Entrust Foundation, overseeing all our projects…’
      • It is MEV and The Trust that should be operating under the name Entrust Foundation, not MEF.
    • Why is MEF not registered for GST?
  • MEV recently formed a ACNC joint reporting group, Mission Enterprises (VIC) LTD_ACNC Group. It includes MEV and MEF, but not The Trustee. Why not?
  • MEV is a public company, a company limited by guarantee.
    • It has the provisions in its constitution to trade without ‘Ltd/Limited’ at the end of its name.
  • It operates, per the ACNC Register, only in Victoria. It does not have a fundraising licence there.
  • It has an internet invitation to donate. It does not have a fundraising licence in any of the other states that have a licensing regime applicable to charities[3].

What do they do?

  • ‘Entrust is about identifying and funding projects that bring transformation to individuals and communities in the developing world amongst the poor and oppressed…We work closely through in-country implementing partners who identify, manage and report on our projects.  These partners and projects are spread across fifteen under-developed nations and Australia.  We cover the costs of doing this from our own resources, so 100% of donor’s money goes directly to the project! [About Us].
    • These projects are not conducted by MEV, but by its two subsidiaries. Why then are their transactions included in MEV’s accounts when the two charities are not consolidated with MEV?
  • See also the next question, below.
  • Here are the current projects.
  • For what was done in 2016, see the ‘Year in Review 2015-16’.

Does they share the Gospel?[4]

  • Not according to information on the website.
  • The constitution says that MEV’s charitable purpose is ‘to share the Gospel of Jesus Christ in culturally relevant ways.’. It goes on to say that ‘This is achieved by providing expertise, resources, people and finance for in-country organisations who follow the teachings of Jesus…’ (paragraph 6).

What impact are they having?

  • They write reports on the projects (titled either ‘Completion Report’, ‘Impact Report’, ‘Progress Report or ‘Project Report’).
    • You can see them all by searching for ‘impact’ using ‘site:entrust.org.au impact’ in Google.
    • Here’s an example of what they mean by impact:
      • “Our partners conducted an end-of-project survey in May 2017 to measure the impact the project interventions have had in the community. It said, “The results showed a decrease in time to fetch water and a reduced incidence of water borne diseases due to the new water points namely, the protected well and the water harvesting structure. There has been a marked impact in terms of water supply as 51% used to get water from the river but now only 16% are still practicing this. Less time (30 minutes to 1 hours) is taken to fetch water whereas in previous times it would take up to 6 hours to get water.”

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

  • If we define ‘direct’ as the item ‘Donations to projects, ‘administration’ was 31% of expenses.
    • They claim that no donations are used for these expenses:
      • We work closely with in-country implementing partners who identify, manage and report on our projects.  These partners and projects are spread across fifteen under-developed nations and Australia.  We cover the costs of doing this from our own resources, so 100% of donor’s money goes directly to the project! (emphasis in original)
        • This claim doesn’t fit with
          • the Chairman thankingthose who again have assisted in underwriting some of our administration costs…’ These are donations as much as any other donations, and there is only one line item for donations in the Notes to the Financial Statements (Note 2).
          • The statement that ‘Where a tax deductible (sic) receipt is given, there is a small charge to cover the direct cost of government compliance.
      • Revenue other than donations totaled $619K this year, easily covering administration expenses of $390K.

Do they pay their board members?

  • Such payments are prohibited by the constitution.
  • The disclosure of expenses is insufficiently detailed to allow the question to be answered.

Can you get a tax deduction?

  • No, not to MEV.
  • But you can if you donate to one of the two charities it controls.
    • All the projects on the website are ‘tax-deductible’. They are therefore not MEV projects.
    • However, when you donate to one of the projects, the charity to which you are donating is not mentioned. It appears that this is because all the money goes to MEF ‘our umbrella Public Benevolent Institute (sic).
      • Why are MEF’s donations shown in MEV’s accounts even though MEF is not consolidated with MEV?

Is their online giving secure?

  • PayPal is used, so yes.

Is their reporting up-to-date?

  • Yes (but although they were given seven months to report, they were, like last year, still a week late.)
    • 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 17 months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2016: No
    • Their two business names are missing.
    • The figure for ‘Donations and trust distributions’ is used for ‘Donations and bequests’.
    • The total of ‘Investment capital gains’ and ‘Other revenue’ is used for ‘Other income…’.
    • No outcomes are reported.
  • Financial Report 2016: No. Like last year,
    • The two subsidiaries are not consolidated, that is, included in MEV’s accounts.
    • It is the two subsidiaries who give tax-deductible donations. And therefore, the charities that run the projects. Why then, when MEV doesn’t consolidate these two charities, are the figures for the projects included in MEV’s accounts?
    • With the number and breadth of stakeholders that MEV has, the directors’ decision to produce the type of financial statements that don’t comply with all the Accounting Standards, because ‘there are no users who are dependent on (MEV’s)…general purpose financial reports’ is not supportable.
    • There is still no explanation for the very large holding of listed investments and managed funds.
    • There are many other questions that could be asked about the accounts. Email me if you are interested.

What financial situation was shown by that Report?

  • Because of what is reported above, no comment.

What did the auditor say about the last financial statements?

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

  • MEV: Almost – its two business names, Entrust Foundation and Entrust Projects are missing.
  • MEF: No
    • Entrust Foundation is still incorrectly included under ‘Other Name(s)’.
    • ‘Size of Charity’ is still blank.
    • ‘Phone’ and ‘Website’ are blank, but these are not compulsory.
  • The Group: No.
    • ‘Who the Group Benefits’, ‘Size of Group’, Operating State(s)’, and ‘Operates in (Countries)’ are blank.
  • The Trustee: No
    • It still hasn’t selected an ‘Entity Subtype’.
    • Entrust Foundation is incorrectly included under ‘Other Name(s)’.
    • A PO Box is included instead of a street address.

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

  • Apart from ‘General Entrust Foundation’ you can choose from 37 projects (down from 61 last year), each of which can be also be reached by selecting from countries (16) or ‘causes’ (five).

Where were your (net) donations sent?

  • This is not disclosed.

Who are the people controlling the organisation?

To whom are they accountable?

  • To the ACNC.
    • Its ‘Charity Tick’ is used on the website (in the footer) 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 MEV’s AIS is not overdue, and no compliance action has been take against it.
      • But it means no more than this.
  • Although they don’t mention it, MEV is a Member of Missions Interlink.
    •  See the section Activities in this review for one opinion on the strength of this accountability.
  • As a company, MEV is also accountable to ASIC.

 

 

  1. On a website in the name Entrust Foundation. Entrust Foundation is one of the business names of MEV (and one of MEV’s subsidiaries).
  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]. With MEV, there is an encouraging statement in a FAQ: ‘We encourage you to bring your complaints to us – we view them as an opportunity to learn and improve.’
  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.

Missionary Ventures Inc.: mini-charity review

Mini-charity review of Missionary Ventures Inc. (MV), 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 the previous review, see here.

Are they responsive to feedback?[1]

  • I sent them a draft of this review. They responded quickly, and the result of the subsequent conversation is included below.

Is MV registered?

  • As a charity, yes.
  • MV is a Victorian incorporated association (No. A0035777A).
  • The name it uses on Facebook and its website (Missionary Ventures Australia), is registered. Not so the name on its other Facebook site, Missionary Ventures Australia Short Term Mission Trips.
  • MV operates, per the ACNC Register, only in Victoria. It doesn’t have a fundraising licence there.
    • Ministry comment: (They believe that they are exempt because they receive less than $10K p.a. from fundraising.)
      • They only operate in Victoria and reported $153K in donations in the AIS 2016.
  • It has an internet invitation to give. It doesn’t have a fundraising licence in any of the other five states that have a licensing regime applicable to charities.
    • Ministry comment: ‘To my knowledge it is not as we only conduct business out of Victoria.’
    • Apart from exemptions, whether it needs such a licence in a state depends on (a) whether fundraising is part of what MV does in that state, and (b) whether that state thinks that MV, by calling for donations publicly, is ‘fundraising’ in their territory.
  • MV operates, per the ACNC Register, in Cambodia, Fiji, Indonesia, Malaysia, Philippines, Thailand, and Vanuatu. These are where they go to on ‘team trips’.
    • All these countries except Cambodia have MV ‘field associates and partners’.

What do they do?

  • Under ‘About Us’/ MVA’s Purpose’:

  • See here for their current ‘Projects and Causes’.
  • They work with ‘field associates and partners’.
  • What they did in 2016 (AIS 2016):
    • Sent out and facilitated Church (sic) teams and School (sic) teams to encourage national churches, schools and other Christian organisations

Does MV share the Gospel?[2]

  • Only incidentally by people on the trips to Christian organisations.

What impact are they having?

  • Nothing systematic found.
    • Ministry comment: MVA aids in the distribution of motorcycles in Partnership with Christian Motorcyclist Association USA – part of the stats we supply to CMA includes Salvations (sic) in each country where bike (sic) are distributed, last year we distributed 42 Motor (sic) cycles to assist pastors in spreading the Gospel. Our field coordinators and associations are actively involved in evangelism . The teams we send out will always support and encourage indigenous church leaders in the proclamation of the Gospel’
  • There’s probably some anecdotal evidence under ‘News’ on the website, and on their Facebook page.
    • Ministry comment: I hope so. Many times we do not communicate this as we are partnering countries which prohibit these activities.

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

  • The expenses are not classified to allow this calculation.
    • Ministry comment: Major expenses include rental, registration fees, accountancy and travel costs – which support does not cover’

Do they pay their board members?

  • Such payments are not prohibited by the constitution.
    • Ministry comment: ‘Correct’
  • $5K was paid for ‘Director Compensation’.
    • Ministry comment: I work 35-5- (sic) hours per week as CEO and as a volunteer from MVA, and so do our two other office volunteers – compensation paid would be to cover some personal expenses incurred. We are looking for more volunteers. ? (sic)’

Can you get a tax deduction?

  • No

Is their online giving secure?

  • PayPal is used, so yes.

Is the Group’s reporting up-to-date?

  • Yes (three and a half 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 11 months ago.

Does the Group’s reporting comply with the regulator’s requirements?

  • AIS 2016: No
    • The number of employees shown is zero yet there is a figure for ‘Employee expenses/payments’.
      • Ministry comment: No paid Employees – Just volunteers (sic)’
    • ‘Donations and bequests’ doesn’t match anything in the Profit & Loss.
    • Is zero for ‘Grants and donations made…’ correct?
    • No outcomes are given.
  • Financial Report 2016[3]: Yes
    • Because of its size (‘Small’), MV is not required to submit a Financial Report.  It has, however, chosen to submit one anyway.
      • The charity also sent me, for use in the review, their Independent Auditor’s Review Report…’
    • Because it was a voluntary submission, the Report does not need to comply with the ACNC’s requirements.  (And it doesn’t.)
    • As a Victorian incorporated association, MV is required to prepare financial statements that comply with the Accounting Standards[4]
    • The Report that MV says, in the AIS 2016, was submitted to the Victorian regulator consists of a single statement, Profit & Loss. It is therefore grossly deficient.
      • Even the Profit & Loss is far short of what is required by the Accounting Standards.
    • The Financial Report is also non-compliant with the requirements of MV’s own constitution.
    • And even with the inclusion of the Independent Auditor’s Review Report, it is questionable whether it meets the standards of Missions Interlink. These require that MV
      • have available for its members and supporters a clear and appropriate financial statement which has been approved by its auditor [Standards Statement, 4.1].

What financial situation was shown by that Report?

  • Because of what is reported in the section immediately above, no comment.

What did the auditor say about the last financial statements?

  • NA

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

  • Yes (unless Rowan Jeffrey should be included as a ‘responsible person’.

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

Where were your (net) donations sent?

  • This is not disclosed.
    • Ministry comment: See above general donations. What donations go towards donors (sic) requests. They go into places like – Malaysia, Fiji, Vanuatu, Indonesia, Philippines – I can assure you no on (sic). Funds usually go via our field associate for disbursements

Who are the people controlling the organisation?

  • On the website, these people.
  • On the ACNC Register (under ‘Responsible Persons’) there is also Don Marshall:
    • Matthew Gosbell
    • Rowan Jeffery
    • Don Marshall (Is it this Don Marshall?)
      • Ministry comment: Don Marshall was added in October 2017 (special meeting) . Sorry website not updated as yet’
    • Kevin Palmer
    • Phil Plowman
    • June Steward
      • And not on the board since July 2016 per her LinkedIn profile.
    • John Williams
    • There are 29 directorships recorded for the name ‘John Williams’.  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 MV’s John 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.  Especially if he has a full-time job.
  • The Board is responsible to the membership. The number of members is not disclosed.
    • Ministry comment: Membership is limited to board members – has been that way since inception in 1999’

To whom are MV accountable?

  • One of MV’s ‘core ideologies’ is that it ‘accepts nothing less than absolute accountability’.
    • Ministry comment: (we try)’
  • It is accountable, as a charity, to the ACNC.
    • The website sports the ACNC’s ‘Charity Tick’. The tick means that MV is a registered charity, its AIS is not overdue, and no compliance action has been take against it.
  • MV is also accountable to the Victorian regulator of incorporated associations.
  • Although not mentioned on the website, it is also accountable as a Member of Missions Interlink.

 

 

  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. “Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14.
  3. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors.
  4. MV is required to prepare financial statements that give a true and fair view of its financial performance and position during and at the end of the year’, and contain
    • income and expenditure (Income Statement) for your association’s financial year
    • assets and liabilities (Balance Sheet) at the end of its financial year
    • other documents required by accounting standards, such as a cash flow statement
    • notes to the account, which must include:
      • information required by the accounting standards
      • information necessary to give a true and fair view
      • information required by the provisions of the Act and its regulations. 

Compassion Australia: mini-charity review

Mini-charity review of Compassion Australia (Compassion), an organisation that seeks donations online[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 Compassion registered?

  • As a charity, yes[3].
  • Compassion is a public company limited by guarantee.
  • It has two business names: Compassion Child Sponsorship and Partners of Compassion. Although it is permitted to omit ‘Limited/Ltd’ at the end of its name, it has no licence to trade under other than Compassion Australia. The website seems to contravene this.
  • It has no trademarks. (Compassion International Inc, the US organisation, has nine, including the one on the top left of each of Compassion’s webpage.)
  • Compassion operates in Australia, per the ACNC Register, in all eight states. It has a fundraising licence in all seven states that have a licensing regime[4].

What do they do?

  • There is no description on the website.
  • The AIS 2016 is meant to be about 2016 specifically, but instead it gives us what we are looking for:
    • Compassion primarily works with individual children through our Child Sponsorship Program. Compassion’s holistic child development model is designed to help reduce the vulnerability of children and their families and build their resilience through year-round nutrition, health, education and income generation support. More information, including access to our annual reports, can be found at www.compassion.com.au
  • Here’s their information on the ‘Child Sponsorship Program’.
    • Individual child sponsorship is their way. There’s more than one way of achieving the change that Compassion is trying to achieve. If you want to understand the choice, you could start with this article.
  • It also
  • Both the ‘Child Sponsorship Program’ and ‘Critical Needs’ are delivered through ‘local child development centres’.
  • Compassion also offers gifts that you can buy.
    • The purchase price goes to the ‘Critical Needs’ program.
  • Compassion believes that not giving the poor cash will help engender your trust in the charity. But there is increasing evidence that in many cases it is better to give cash. Compassion do not address this.
  • All the sponsored children are overseas. This is what it does for Australian children.
  • Fundraising is a big part of what Compassion does.

Does Compassion share the Gospel?[6]

  • Although they don’t include ‘Advancing Religion’ as an ‘Entity Subtype’ on the ACNC Register, and although the objects in the constitution don’t specifically mention sharing the Gospel, and although Compassion is endorsed as a Deductible Gift Recipient, it does share the Gospel with the sponsored children:
    • Before registering their children in the Child Sponsorship Program, caregivers are told about the Christian foundation of the program and give permission for their children to receive Christian education. Ongoing participation in the program doesn’t depend on making a commitment to Christ and children are free to leave the program at any time. Our implementing church partners are careful to present the gospel in a non-coercive, culturally sensitive way.
    • The answer to the FAQ ‘Was Compassion trying to convert Indian children to Christianity? gives a different picture. As does this one.
    • And this one avoids the question.
    • A consistent picture should be possible – another of their FAQs says that sharing the Gospel doesn’t automatically rule out a program’s eligibility for a tax deduction.

What impact are they having?

  • An independent study of Compassion-sponsored children was completed in 2013. Here, in a FAQ, is Compassion’s description of the results:
    • Compassion has been involved in individual child development for over 60 years. Independent research published in the Journal of Political Economy in 2013 studied 1860 children who participated in Compassion’s Child Sponsorship Program between 1980 and 1992 and found that graduates stayed in school longer, were more likely to have salaries and white-collar employment, and were more likely to be leaders in their communities and churches than their peers who did not participate in the program. Once Compassion sponsored children, these adults are now making a difference in their communities as mums, dads, pastors, teachers, doctors, even members of parliament.
  • This information is also used in a promotional video.
  • The FAQ mentions only the journal and the year, the video only the name of the lead researcher. So, here’s the citation: Bruce Wydick, Paul Glewwe, and Laine Rutledge, “Does International Child Sponsorship Work? A Six-Country Study of Impacts on Adult Life Outcomes,” Journal of Political Economy 121, no. 2 (April 2013): 393-436.)
    https://doi.org/10.1086/670138
  • Other than the above, nothing systematic found

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

  • Compassion says that ‘80 per cent [of funds raised] is used for the direct benefit of children in our programs’. But this ‘direct benefit’ includes
    • The development of the programs
    • ‘Informing and updating sponsors and facilitating their personal relationship with their sponsored child’, and
    • Educating the community in Australia.
      • The last item shows a particularly wide definition of ‘direct’.

Do they pay their directors?

  • The Compassion governing document does not permit this.
  • Expenses are not disclosed at a level that allows one to check for a payment.

Can you get a tax deduction?

  • The ABN record shows that you can claim a tax deduction for a donation to Compassion. And to its two funds, Compassion Australia Necessitous Circumstances Fund and The Compassion Overseas Aid and Development Fund.
    • This is not what Compassion says in answer to the FAQ ‘Are my donations to Compassion tax deductible?’ on its website. There is says that it only has DGR status for its ‘Overseas Aid and Development Fund’, and that donations to the ‘Bible Fund’ are not tax-deductible.
      • And Leadership Development Program appears to be another one that is not tax-deductible.
    • Although it has an ‘overseas aid and development fund’, its model of using local churches means that it is not eligible for membership of the Australian Council for International Development (ACFID).

Is their online giving secure?

  • Security is not mentioned on the first two pages of the process.

Is their reporting up-to-date?

  • Yes (lodged six and a half months after their year-end, one 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 17 months ago.

Does their reporting comply with the regulator’s requirements?

  • Annual Information Statement (AIS) 2016: No
    • The business names are omitted. (As is the trading name, but trading names are of little consequence nowadays.)
    • Outcomes are not mentioned.
    • Not necessarily wrong, but inexplicable:
      • ‘Grants…for use in Australia’ has no comparable item in the financial statements; ‘Local program expenses’ are $2.15 m, considerably short of the amount here.
      • ‘Grants…for use outside Australia’ compares with $59.77 m for ‘Program expenses’ plus ‘Program support expenses’ in the financial statements, a little short of the amount here.
  • Financial Report 2016[7]: Yes.
    • But Compassion iscommitted to earning, and keeping, the trust and confidence of our donors and sponsors through complete transparency, so here’s some changes, like last year, that would result in a clearer picture of performance and position:
      • Why are neither of the tax-deductible funds not mentioned in the Financial Report 2016?
      • Do they use third-party fundraisers other than online services such as GoFundraise?
      • Investment properties $1.46 m, including Note 8
        • Why is a charity holding investment properties?
        • What and where are they?
        • Why are they not earning any rent?
        • How did an investment property have a written down value of only $3K?
      • Why do the giving options not match the funds in the ‘Funds movements schedule’ (Note 14)?
      • Lack of disclosure in the operating activities section of the Statement of cash flows means that the usefulness of the statement is greatly reduced; for instance, the figures cannot be compared to those in the Statement of profit and loss and other comprehensive income.
      • Presumably ‘Local program expenses’ means those for Australian programs, and ‘Program expenses’ are those for the overseas work?
        • If so, why don’t the figures match those in the AIS 2016?
      • There is no explanation of the terms ‘administration’, ‘fundraising’, and ‘advocacy’.
        • One would think that much advocacy serves the fundraising effort as well.
          • Note 13, by including ‘Advocates under ‘Fundraising appeals’, confirms this.
      • How overhead is divided between ‘Program support expenses’ and fundraising, administration, and fundraising is not explained.
      • Presenting revenue as ‘Revenue from continuing operations’ implies that there is revenue from discontinued operations per AASB 5 (Non-current Assets Held for Sale and Discontinued Operations, www.aasb.gov.au). But there isn’t any.
      • Trade and other payables $12.98 m, including Note 10: why are there some employee benefits included here rather than with long service leave under provisions?
      • In the Statement of changes in equity, the components of other comprehensive income are not shown.
      • Other income $87K, including Note 2: this income came from outside Compassion’s ordinary activities. This year it wasn’t the usual profit on disposal of non-current assets, so it would be interesting to know what it was.
      • Fundraising expenses $10.04 m: as most of the money comes from the members of local churches, why is this 13% of expenses?
      • Policy Notes normally included but not in these accounts:
        • New, revised or amending Accounting Standards and Interpretations adopted
        • Current and non-current classification
        • Fair value measurement
      • Note 15 Related party transactions: it is good practice to also disclose whether there are any loans or receivables between the related parties.
    • And some new things this year:
      • ‘Other Receivables’ $1.15 m, including Note 6: this explanation has been added this year:
        • These amounts generally arise from transactions outside the usual operating activities of the Company….
          • What is an example of these not insignificant and recurring transactions?
      • There is no explanation of the very large decrease in ‘Office furniture and equipment’ (from $1.10 m to $409K).
      • ‘Time off in lieu’ has gone to zero. A change in policy?

What financial situation was shown by that Report?

  • Surplus as a percentage of revenue decreased from 17% to less than ½%.
  • ‘Cash and cash equivalents’ represents approximately 10 weeks of revenue.
  • Current assets as a multiple of current liabilities (working capital) have declined from 1.31 to 1.22.
  • With only $397K of non-current liabilities, long-term financial structure appears sound.
  • The 19 ‘key management personnel’ (see Note 16) account for 19% of the wages bill (up from 18% last year).
    • If they are all full-time, the average compensation is $113K.
  • Using the figures for employees declared in the AIS 2016 (128 full-time, 34 part-time, and 4 casuals), and if part-timers work 50% and casuals 10% of full-time hours, the non-key personnel average 80K p.a. in benefits.
    • There’s no ‘Profit on disposal of non-current assets reported’, so the disposal of the (undefined) ‘fundraising equipment’ (all of it) must have resulted in a loss.

What did the auditor say about the last financial statements?

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

  • Nearly. The two business names are still missing.

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

  • Child sponsorship, plus ‘Donate’:
    • ‘Christmas Gift Fund’
    • ‘Where Most Needed’
    • ‘Mums and Babies’
    • ‘Water and Sanitation’
    • ‘Give to Critical Needs’
      • ‘Income Generation’
      • ‘Health’
      • ‘Education and Training’
      • ‘Disaster Relief’
      • ‘Highly Vulnerable Children’
      • ‘Infrastructure’
    • ‘Unsponsored Children Fund’
    • ‘Indigenous Project’
    • ‘Bible Fund’
    • Plus ‘Gifts’:
      • ‘Livestock’
      • ‘Health’
      • ‘Learning’
      • ‘Child Sponsorship’
      • ‘Where Most Needed’
    • ‘Sponsor a Child’
  • The two tax-deductible funds are not mentioned.
    • Elsewhere, when answering the FAQ ‘What is the best way to donate to Compassion?, they request that cheques and money order be made payable to Compassion Overseas Aid and Development Fund. Why the restriction?

Where were your (net) donations sent?

  • This is not disclosed.

Who are the people controlling the organisation?

  • The people shown in the lower half here.
  • Which is the same as those listed on the ACNC Register (under ‘Responsible Persons’):
  • The Board is responsible to the membership. When last disclosed (30 June 2016, Directors’ Report), there were only seven members, and as the seven directors must be members, this provides no accountability.

To whom are Compassion accountable?

  • In answer to the FAQ ‘How do I know I can trust you with my money? Compassion says that
    • As an organisational partner of the Fundraising Institute of Australia (FIA), we comply with the standards of Missions Interlink (sic) and we are independently audited annually by Bentleys Brisbane (Audit) Pty Ltd.
      • The FIA does not require membership of Missions Interlink.
      • And its code is principally about fundraising, that is, the practices that Compassion uses to get your donation, not what they do with your donation once they’ve got it. So not relevant here.
      • Missions Interlink has some standards about post-fundraising behaviour. But read here for how much comfort you should take from this accountability.
  • It also refers to its ‘global internal audit function’. These standards are not published though (and nor are the results).
  • Further down there’s another paragraph on accountability:
    • The Australian Charities and Not-for-Profits Commission (ACNC) recently launched a ‘Tick of Charity Registration’ which aims to give reassurance to the public that a charity is transparent and accountable by highlighting its presence on the ACNC Charity Register. Compassion Australia is successfully registered on the ACNC Charity Register and has the green tick of approval.
  • Compassion is also accountable, as a company, to ASIC.

 

  1. Both here and on various third-party platforms (see later).
  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. It’s ‘Entity Subtype’ is ‘Public benevolent institution’. It is a ‘Christian’ organisation that shares the Gospel (see below), so ‘Advancing Religion’ would also seem to be appropriate.
    • Compassion says, in a FAQ, ‘Why was Compassion registered as a “charitable” NGO instead of a “religious” NGO?, that
      • When Compassion registered as a charitable organisation, the laws and guidelines were different—we registered as “charitable” in full alignment to the laws and guidelines at that time.
        • ‘Charitable’ and ‘religious’ is no longer a relevant comparison. All charities are ‘charitable’. Since the advent of the ACNC Register, charities have been able to change the ‘Entity Subtype’ field.
  4. Last year I said that they didn’t have a licence in Victoria. This was because I had yet to realise that the Victorian search function required the full name, not just ‘Compassion’. Sorry Compassion.
  5. …Fundraising for Compassion is a great way of raising awareness and advocating for children living in poverty, while at the same time making a real difference in children’s lives. We have teamed up with online fundraiser Everyday Hero and GoFundraise to make the process easy for you. Or if you’d rather fundraise without a web presence, you certainly can. Everything you need to get started is right here. Click on the ‘Start Fundraising for Compassion’ tab [links mine].
  6. “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.
  7. 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.

Church Missionary Society – Australia Limited: mini-charity review

Mini-charity review of Church Missionary Society – Australia Limited (CMS-A), an organisation that seeks donations online[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. They….did not respond. (Last year, after negotiating more time to reply, I didn’t hear from them again.)

Is CMS-A registered?

  • As a charity, yes.
  • CMS-A is a company limited by guarantee. It is permitted to omit ‘Limited/Ltd’ at the end of its name.
  • It controls another four charities:
  • CMS-A is a member of a joint ‘ACNC_Reporting Group’. This means that only one AIS and one Financial Report is required for the group.
    • But only two of the four charities that it controls are members of this Group, the two PBIs. Why not all five charities?
  • CMS-A’s members are branches (of CMS-A) and 24 (originally at least) people because of their office (in CMS-A and the branches).
    • Although called ‘branches’, these entities are separate legal entities that do not appear to be controlled by CMS-A. However, the CMS-A website gives the impression that it is all one organisation: it hosts the webpages for each branch, there is only one giving facility for CMS-A and its branches, and it shows NSW/ACT’s conference centre as its own.
  • CMS-A has only one business name, St Andrew’s Hall. This means that its use of, for instance, CMS Australia on Twitter and LinkedIn is questionable.
    • The constitution (clause 3.2) says that one of the ways that CMS-A fulfils its objects is ‘by owning and controlling the use of the names ‘CMS’ and ‘Church Missionary Society’ and related logos, trade marks and other intellectual property…’. But neither of these names is registered to CMS-A, nor do their have them as trademarks.
  • CMS-A operates, per the ACNC Register, in New South Wales, Northern Territory, Victoria, and Western Australia. It appeals for donations on its website.
    • It is not clear why they only include these states. For instance, they have a conference centre in Queensland.
    • It doesn’t have a fundraising licence in any of the states that have a licensing regime applicable to charities[5].
  • CMS-A says on the Register that it does not operate overseas. This is despite saying that they ‘have over 200 long-term workers serving in strategic ministries to reach people for Christ’. Presumably this is because all these missionaries don’t work for them, but for a different entity, a branch.

What do they do?

  • Vision, values, foundations and history on the website, but no statement of what they do. But from the description of CMS-A as a ‘ministry organisation’ of the Anglican Church of Australia:
    • CMS is an evangelical, voluntary, lay, church society that is engaged in world mission. It endeavours to make the gospel known through cross-cultural evangelism and by working closely with partner churches in strategic gospel ministries and training.
  • More specifically, from the Directors’ Report (in the Group Financial Report 2016), their ‘Principal Activities’ are
    • 1) Selection of missionaries and short term workers; 2) Training of missionaries and short term workers, principally through the work of St Andrew’s Hall in Victoria; 3) Developing and nurturing relationships for the placement of mission personnel; 4) Placement of missionaries, short term workers and cross cultural apprentices into mission contexts; and 5) Pastoral care and support of missionaries, short term workers and cross cultural apprentices on location.

Does CMS-A share the Gospel?[6]

  • No.

What impact are they having?

  • Nothing systematic found.
    • I’m sure there would be some anecdotal information under ‘Resources/CMS Publications’ in the main menu.

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

  • Even ignoring the limitation imposed by the exclusion of two charities, we can’t answer this question because the expenses are not classified to allow the calculation.
    • It is not simply ‘Administration’ ($944K), because this excludes, for instance ‘Fund raising expenses’ ($384K).
    • The Note for this item says that
      • CMS-A, by agreement with its Branch Members who act as its sole fund raising (sic) agencies, has limited the fund-raising (sic) expenses payable to these agencies in respect of the year ended 30 June 2016 to 25% (2015 – 25%) of the funds raised.
      • That’s a minimum of 25 cents in every dollar raised on top of any other administration expenses.
      • Branches are the ‘sole funding raising agencies’. Why then the call for funds on the CMS-A website?

Do they pay their board members?

  • The CMS-A governing document does not permit this.
  • There is insufficient disclosure in the expenses to check.
  • The other charities were not checked.

Can you get a tax deduction?

  • No, not for a donation to CMS-A.
    • But you can, at least per the ABN record, to the Group’s funds, CMS Overseas Aid Fund, St Andrew’s Hall Building Fund Parkville D (sic), and CMS Aboriginal Missionary Work in North Australia.
    • It appears though, that CMS-A receives no money directly for these funds – the giving form allows only a donation to one of its branches.

Is their online giving secure?

  • Security is not mentioned.

Is the Group’s reporting up-to-date?

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

Does the Group’s reporting comply with the regulator’s requirements?

  • AIS 2016: No
    • ‘Other Income’ does not match the figure in the accounts.
    • Only New South Wales and Victoria as where the Group conducted activities in 2016 doesn’t match their information elsewhere.
    • Nor does the long list of countries – no countries are listed on the Register for either of the charities in the Group.
    • No outcomes are given.
  • Financial Report 2016[7]: No.
    • Like last year
      • Two charities that CMS-A controls are, without explanation, not included in the accounts.
      • The directors’ belief that ‘there are no users who are dependent on general purpose financial statements’, that is, “all the users can obtain the financial information they require without regulator help[8], is not supported by the facts of who CMS-A are and what they do.
      • The relationship between CMS-A, its branches, donations sought and services provided is integral to the operations of both parties, but is not disclosed.
        • 69% of revenue comes from an unexplained item, ‘Contributions for Branch Members.
      • There is insufficient explanation for how the $6.34 m ‘treasury deposit facility’ can be held with another charity and yet included in the accounts.
      • There is no explanation for why missionaries are not treated as employees (and therefore their expense included under ‘Employee benefits expenses’).
      • The ‘Related Parties’ Note does not mention the branches.
      • There is insufficient disclosure of the relationship between Church Missionary Society Trust Limited, the properties used or owned by CMS-A, and Church Missionary Society NSW & Act Limited.
      • The immediate expensing of all ‘fixed assets purchased for use by missionaries’ means that assets are understated. This understatement is not acknowledged (and its magnitude not disclosed).
    • CMS-A claim, in Note 1, that
      • ‘The account policies that have been adopted in the preparation of this report…have been consistently applied unless stated otherwise. Yet, without comment, many changes have been made. For example,
        • $2.61 m of ‘Property, furniture and equipment’ has been reclassified as ‘Investment property’.
        • Significant changes have been made to the classification of cash flows; for example, the cash flows from financing activities have been reclassified as from investing activities.
        • ‘Operations’ expense has become ‘Administration’ (a qualitatively material term for charities).
        • ‘Trust fund income’ is no longer classified as ‘Other comprehensive income’.

What financial situation was shown by that Report?

  • No comment.

What did the auditor say about the last financial statements?

  • The auditor, Nexia Sydney Audit Pty Ltd, Stephen Fisher signing, issued a ‘clean’ opinion.
  • Before you decide how much comfort to take from this
    • read about audit opinions here and here.
    • re-read the ‘Financial Report 2016’ section, above.

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

  • Group: No
    • There are fewer states listed than for CMS-A.
    • Countries are listed yet the two members of the Group do not operate overseas. (Or is the mistake the other way around?)
    • The PBI’s membership has been duplicated.
  • CMS-A: No
    • ‘Other Name(s)’ is incorrect.
    • Neither an AIS nor a Financial Report is required.
    • No overseas operations?
    • ‘Operating State(s)’ is incorrect.
  • PBI #1
    • No overseas operations?
    • ‘Operating State(s)’ is incorrect.
    • CMS Aboriginal Missionary Work in North Australia’ is not another name for the PBI, but its fund.
  • PBI #2
    • Why a second PBI with the same ABN?
    • The ‘Registration Status’, ‘D’, doesn’t make sense.
    • Every AIS that has been required is overdue.
    • ‘Charity Address for Service’ is blank.
    • No overseas operations?
    • ‘Operating State(s)’ is incorrect.
    • CMS Aboriginal Missionary Work in North Australia’ is not another name for the PBI, but its fund.
    • ‘Website’ is blank, but the ACNC says that it isn’t compulsory.

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

  • The donation page gives you the following choices:
    • ‘General Missionary Support’
    • ‘General Tax Deductible (sic) Gift’
      • There is no further selection possible. How then is the money allocated between the three funds?
    • ‘A particular worker’ (with a dropdown listing all the workers)
    • ‘Other’
  • However, because you must select a branch of CMS-A, and the branches are independent charities, you are not actually donating to CMS-A.

Where were your (net) donations sent?

  • Other than ‘missionaries’ and the names of the three funds in Note 4, this is not disclosed.

Who are the people controlling the organisation?

To whom are CMS-A accountable?

  • To the ACNC.
  • And, as a company, to ASIC.
  • Although not mentioned on their webpage, CMS-A is accountable as a Member of Missions Interlink.
    • The person responsible for this accountability is Pam Thyer, the National Director. As well as being on the CMS-A board, Pam is also the ‘Chairperson’ of another Missions Interlink member, Church Missionary Society Victoria Inc.
    • See also the section Activities in this review.

 

  1. Although the donation page is on the CMS-A website, there is no option to donate to CMS-A. Just one of its branches.
  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. Subject to clause 38.3, Church Missionary Society Trust Limited, a company limited by guarantee registered under the Corporations Act 2001 (Cwlth)(Trust Company) shall be the trustee of CMS-A and shall act in accordance with such direction as shall be given from time to time by CMS-A.
  4. This is an automatic consequence of CMS-A having a Public Benevolent Institution (PBI) when the ACNC came into being.
  5. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions.
  6. 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.
  7. 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.
  8. ‘Improving Financial Reporting for Australian Charities’, AASB Discussion Paper, 2017, page 5, www.aasb.gov.au.

The Church Missionary Society – Tasmania Inc: mini-charity review

Mini-charity review of The Church Missionary Society – Tasmania Inc (CMS-T), 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 the previous review, see here.

Are they responsive to feedback?[1]

I sent them a draft of this review. They…did not respond. (Last year they sent a few comments and asked for more time, but then I heard nothing more from them.]

Is CMS-T registered?

  • As a charity, yes.
  • CMS-T is a Tasmania incorporated association (TAS 03628C).
  • It is a branch of Church Missionary Society – Australia Ltd (CMS-A). CMS-A is a ‘ministry organisation’ of the Anglican Church.
  • Although CMS-T says on the ACNC Register that CMS Tasmania is its other name, the name is not registered. CMS-T holds no business names, so should always be using its full name (including ‘Inc/Incorporated’ on the end).
  • CMS-T operates, per the ACNC Register, only in Tasmania. But calls for donations on its homepage.
    • It is still not registered to fundraise in any of the six states (including Tasmania) that require charities to register[2].
  • CMS-T operates, per the ACNC Register, only in Spain. But there are at least two other countries that should be listed (see the AIS 2016, below).

What do they do?

  • Generally: see the first section here.
  • More specifically: from the AIS 2016:
    • We educate people throughout Tasmania about cross cultural Christian mission. Our major annual event was the SummerView Conference held at Port Sorell from 14-17 January 2016. Regular regional prayer gatherings are held in the north, south, and northwest of the State. Missionary information was disseminated at these and other occasional events held during the year. Identifying and endorsing suitable candidates for cross cultural overseas Christian ministry. Support of missionaries in cross cultural service through the Church Missionary Society Australia Ltd. Currently C.M.S. Tasmania is financially supporting: 1. two missionary units: a single person in Spain and a married couple in South East Asia. 2. some missionaries attached to other C.M.S. Branches.

Does CMS-T share the Gospel?[3]

  • Only via its missionaries.

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 ‘Distribution of Funds CMS Australia’ is defined as the money that goes to achieve the impact, then 40% is administration (down 10% on last year).
    • But some of this remittance to CMS-A is for their overhead. So, CMS-T’s ‘administration’ is larger than this. The contribution to CMS-A is not disclosed.

Do they pay their board members?

  • The CMS-T 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-T.
    • 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.
    • $15K of the funds distributed were ‘Tax Deductible (sic) Funds’. This amount did not belong to CMS-T and therefore should not have been recorded as either revenue or expenses.

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 before the deadline. But three weeks earlier than last year).
    • Atypically, the auditor signed a month after the directors signed.
    • 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.
    • Spain is not the only country in which CMS-T has missionaries (see ‘What do they do?’, above).
    • CMS-T is indeed known by the name ‘CMS Tasmania’, but if by ‘Other Name(s), the ACNC means registered names (which is likely), then CMS-T’s inclusion of this name is incorrect.
    • No outcomes are given.
  • Financial Report 2016[4]: Like last year, questionable.
    • Like last year
      • The committee says that CMS-T is not a reporting entity. This allows them to make less than a full disclosure about CMS-T’s finances and operations. They give no reason for the choice, but, by definition, they are saying that there no current or prospective stakeholders who depend on their financial statements to make decisions. With 500+ members [State Director’s Report], this is implausible.
      • The auditor, Geoffrey Powell, gives a confusing opinion (see below).
      • Comprehensive income is not disclosed.
      • The result of CMS-T’s major annual event, SummerView, is included as a single figure, thereby understating both revenues and expenses.
      • Money collected for another charity (CMS-A) is included.
      • A provision for maintenance (39% of liabilities) does not meet the definition of a liability (there is no obligation).
      • Most of the other items from last year apply to this year[5].
    • New this year:
      • ‘Receipts from activities’ and ‘Payments (sic) operating costs’ is an insufficient disclosure of cash flows.
      • Buildings are not depreciated.
      • There are no Notes for the Statement of Surplus or Deficit.
      • The totals for the prior year do not match what was reported last year.
      • There is no explanation for the change in how both income and expenses are classified compared to last year.
      • The classification of ‘Accumulated Funds’ has, without explanation been changed.
      • 2015’s ‘Receivables’ have, without explanation, disappeared.
      • ‘Operating Costs’ are disclosed, but not non-operating costs.
      • Why is ‘Summerview’ (sic) also included as a revenue item?
      • There is an employee, yet no explanation for the lack of employee benefits liability.

What financial situation was shown by that Report?

  • The surplus increased from an already high 18% of revenue to 31%. Neither the absolute amount or the increase are explained.
  • ‘Employment costs’ declined from 37% if expenses to 13%. This is also not explained.
  • Based on the figures, financial structure is sound.
  • No explanation is given for the substantial income from ‘Rent’ (22% of revenue).
  • It appears that CMS-T does not itself give.
  • Together with ‘Cash’, ‘Deposits with Trustees of Diocese of Tasmania’, represents 27 months of revenue. There’s no information in the financial statements about why so much is held at the same time as continuing to seek donations.
    • CMS-T includes this comment in the Branch Council Report (in the Financial Report 2016):
      • C.M.S. Tasmania through its relationship with C.M.S. Australia, has a commitment to fund CMS-Tas missionaries. While this commitment will be met in part by the ongoing support of our donors, CMS-Tas seeks to hold sufficient financial reserves to cover future missionary commitments payable to CMS-A. Our current financial reserves are adequate to cover this commitment.
        • Why should past donors support the future unmet needs of missionaries?
    • The same section in the Branch Council Report continues
      • The health of the Church Missionary Society – Tasmania Inc is dependent upon the grace of God and the continued financial support of its members.
        • By keeping significant financial reserves, CMS-T is dependent on neither the grace of God nor its members.
  • Interest Free (sic) Loans, $58K: There is no explanation why, with so much short-term money being held, loans are also needed.

What did the auditor say about the last financial statements?

  • The auditor, Geoffrey V Powell, of Powell Accounting, Chartered Accountants, gives a confusing opinion. He says that
    • subject to the limitation described above the financial report…has been prepared in accordance with the [ACNC Act]’. But there is no limitation described in his report.
    • ‘has been prepared in accordance with the [ACNC Act], including: …b) complying with the Australian Accounting Standards to the extent described in Note 1’. But these Standards are not mentioned in Note 1.
  • Should you conclude that this is just a slip, and that the report is therefore an unqualified opinion, you should read here and here to take the right amount of comfort from that finding.

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

  • No:
    • Spain is not the only country in which CMS-T has missionaries (see ‘What do they do?’, above).
    • They are indeed known by the name ‘CMS Tasmania’, but if by ‘Other Name(s), the ACNC means registered names (which is likely), then CMS-T’s inclusion of this name is incorrect.
    • ‘Phone’ is blank, but the ACNC says that this is not compulsory.

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

  • Via the Give button in the footer of the CMS-T 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?

  • Other than $2K to fund a loss on their conference (‘Summer View’), the money went to CMS-A. $121K.
    • Like last year, some of this didn’t belong to CMS-T in the first place – they collected $15K tax-deductible donations for CMS-A as their agent.
    • There’s no information in the financial statements about the destination of the non-tax-deductible money.
      • It is most likely the payment talked about in the ‘Branch Council Report’ (included in the Financial Report 2016):
        • CMS-A pays all missionary allowances and direct cost, and makes provision in their accounts for resettlement when they return home. As CMS-A has no income of its own, each Branch is responsible for meeting the cost of their missionaries, along with a proportional share of CMS-A costs including staff, administration, pastoral care, training and governance via the monthly payment of an amount budgeted by CMS-A each financial year.
        • So, the $121K is both to pay CMS-T’s missionaries and to run CMS-A. We are not told the split.

Who are the people controlling the organisation?

  • Not shown on the webpages, but per the ACNC Register (under ‘Responsible Persons’), they are:
    • Craig Arnold
    • Anita Booker
    • Richard Condie
    • Michael Guerzoni
    • Emily Isham
    • Francis Lee-Jones
    • Suzanne Morton
    • Joel Nankervis
    • James Oakley
    • Elizabeth Ritchie
    • Scott Sargent
    • Robert Stanley
    • Leonie Stiltz
    • Richard Condie has no right to vote, so he shouldn’t be in this list[6].
  • The Board is responsible to the membership. There are over 500 members [State Directors’ Report].

To whom are CMS-T 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. 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.
    • Neither fundraising expense nor administration expense are disclosed.
    • ‘Administration CMS Victoria Inc.’, $27K
      • There is no explanation of this item.
      • How it the amount calculated?
      • How does it relate to the other administration expenses?
    • There is no explanation for not classifying the property that is rented as an investment property.
    • ‘Cash’, $58K, including Note 2: This should be ‘Cash and Cash Equivalents’, as per the policy note.
    • ‘Deposits with Trustees of Diocese of Tasmania’, $509K, including Note 4
      • These are not classified per the Accounting Standards.
      • If any of these are for three months or less they should be included under ‘Cash and Cash Equivalents’. As per the policy note.
    • ‘SummerView Assets’: What kind of assets are they?
    • Missing from Note 1:
      • The accounting standards complied with.
      • Individual entity? Not-for-profit?
      • Functional and presentation currency.
      • The date the accounts were authorised for issue.
      • ‘Property, Plant and Equipment’:
        • Missing: the useful lives adopted, policies on the review of the depreciation factors and the derecognition policy.
        • Aren’t the rates based on the land value, not the property value?
      • ‘Revenue and Other Income’:
        • What about the policy for rent, the second largest item?
        • On what are dividends received?
      • ‘Goods and Services Tax (GST)’: What about cash flows? 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
      • Trade and other payables
      • Trade and other receivables
      • New Accounting Standards and Interpretations not yet adopted
        • Missing Notes:
      • Critical accounting estimates, judgements and assumptions
      • Contingent liabilities
      • Commitments
      • Events after the reporting period
      • Remuneration of auditors
      • Related parties (an ACNC expectation)

    • There are eight directorships recorded for the name ‘Richard Condie’. 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 CMS-T’s Richard Condie 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 as he has a full-time job as the Bishop of Tasmania.