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?
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.
- 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?
- Only via its missionaries.
What impact are they having?
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: 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.
- 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?
- 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)
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.
- The Board is responsible to the membership. There are over 500 members [State Directors’ Report].
To whom are CMS-T accountable?
- 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]. ↑
- The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions. ↑
- “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. ↑
- 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?
- 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
- Critical accounting estimates, judgements and assumptions
- Contingent liabilities
- 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.