Northpointe Baptist Church Inc.: charity review

This is a charity review of Northpointe Baptist Church Incorporated (NBC),

The previous review (in black) is used as a base, with comment only if the situation has changed or extra information would be helpful.

an organisation that has a public invitation to give. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

Conflict of interest

I am an active participant in the community that, many years ago, chose to incorporate as NBC.  However, neither myself nor my wife are, nor do we intend to become, members of the entity being reviewed, the legal entity. Some conflict of interest remains though, so I have been careful to review this charity in the same way as I have reviewed every other charity.

Is it responsive to feedback?

  • There is no invitation, on the website, to submit feedback or complaints.
  • Accountability is not mentioned on the website.

NBC is now a member of Baptist Union of New South Wales, itself a registered charity.

  • I sent them a draft of this review. They did not respond.

Is it registered?

  • Yes, as a charity.
  • NBC is an Australian Capital Territory (ACT) incorporated association (A 04911).
    • The ABN record is still incorrect in showing that NBC is unincorporated.
  • It operates, per the ACNC Register, in Australia only in that territory.
  • It holds no business names. It therefore should to ‘trade’ only under its full name. Not like it does on its website and on Facebook[1].
    • The homepage now has the full name.
  • The ACNC Register, supported by the website, says that it operates overseas in Cambodia, Japan, Rwanda, Spain, Myanmar, and Viet Nam.
  • It has no fundraising licences. Whether or not it requires one in a state that has a licensing regime applicable to charities, depends, in the first instance, on whether that state believes that an internet invitation to give qualifies as ‘fundraising’.

What does NBC do?

  • The usual local church things: see ‘Missions’, ‘Ministries’, and ‘Our Message’ under ‘About’, all on the home page.

Do they share the Gospel[1]?

  • Yes

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?

  • The expenditure is not classified to allow an estimate of this figure.

Do they pay their board members?

  • There is nothing to prohibit this in the constitution.
  • The financial disclosure doesn’t allow a check for such payments.
  • It appears that no such payments were made.

Can you get a tax deduction?

  • No

Is their online giving secure?

  • It is not until the fourth page of the process that security is mentioned. And then in small print.
    • Stripe is used, so your payment should be secure.
  • Online giving is no longer offered.

Where were the (net) donations sent?

  • For only $12K of the $41K is this disclosed: ‘Manna (Vietnam Orphanage)’.
    • How does this relate to ‘GVI’ Viet Nam (above) and here?
  • The person or organisation, and their country is shown in Notes 2 and 3 for $49K of the $69K total.

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

  • ‘General Funds’
  • ‘Missions’
  • ‘GVI’
  • ‘Building Fund’
  • Online giving is no longer offered.

Is their reporting up-to-date?

  • Yes (four and a half months after their year-end, three weeks later than last year).
  • Yes (four months after their year-end, three weeks earlier than last year).

Does their reporting comply with the regulator’s requirements?

  • Annual Information Statement (AIS) 2017 2018: No
    • The ‘Description of charity’s activities and outcomes’
      • is not about 2017 2018 particularly, and
      • has no outcomes.
    • The ‘Accounting method…’ does not match the one that has been used.
    • ‘Donations and bequests’ does not match the figure in the Profit & Loss Statement Profit & Loss [Last Year Analysis] report.
    • There are again no figures under ‘Balance Sheet Extract’.
    • The ‘Extract’ has been completed this time.
  • Financial Report 2017 2018: Yes
    • But only because it has been voluntarily submitted to the ACNC, and voluntarily submitted reports do not need to comply with the ACNC legislation.
      • NBC’s doesn’t comply because it deviates materially from what is required by the accounting profession.
        • For instance, there are no Notes to the accounts or Directors’ Declaration, and there is significant confusion over the reporting framework.
      • There is now a directors’ declaration.
      • There are now Notes, but
        • there are only six, with two of them being unnecessary
        • Three of the Notes do not match the statements
        • they are not keyed to the statements, and
        • many of the required Notes are missing.
      • The Report is still missing two of the required statements.
      • The two statements that are included differ materially from what’s required by the Accounting Standards.
      • There is conflicting information on the basis of accounting.
    • The reviewer auditor has also again deviated materially from the requirements of his profession.

What financial situation was shown in that Report?

  • 44% of the expenditure went on the one full-time employee (Annual Information Statement (AIS)2017).
    • Due to the resignation of the pastor [Annual Report, ACNC Register], this percentage is now only 22%.
  • The next highest expenditure was ‘Missions’ plus ‘Love Offering’, 28%.
    • 59% in 2018.
    • Much more than this could have been given – NBC again has a substantial sum in the bank ($149K) ($145K).
      • No explanation is given for holding such a large sum.
  • The only other figure greater than $5K was ‘Music Ministry’, $17K (11%).
    • This seems a disproportionately large amount.
    • It dropped to $2K this year.

What did the auditor say about the last financial statements?

  • The auditor, Doug Burgess, Chartered Accountant, of BLM Accounting Services, concluded that
    • Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the annual financial report…does not present fairly, in all material respects, the Church’s financial position as at 30th June 2017 and of its financial performance for the year ended on that date in accordance with the Australian Accounting Standards as noted in note 1 (sic).
      • There is no ‘note 1’.
      • If not an audit why this stamp on the financial statements?

http://tedsherwood.com/wp-content/uploads/2018/04/word-image-14.png

      • This year NBC upgraded to an audit (from a review).
      • By the same auditor.
      • He did not use his stamp this year.
      • Under ‘Scope of Review’ he says that ‘With the exception of trade creditors the statements have been prepared on a cash bais (sic)’. This basis is not one that is recognised by the Standard-setters, and there is therefore no way that the statements ‘present fairly’ as he claims.
    • This review falls so far short of the accounting profession’s requirements for a review that it is difficult to have any confidence in his opinion.
      • His audit report uses an old format, and therefore his report on NBC continues to fall well short of the accounting profession’s requirements.

If a (registered) charity, is their page on the ACNC Register complete / correct?

  • No:
    • A PO Box number is not a ‘street address’.
    • The constitution contains neither of the two clauses necessary to make NBC a not-for-profit.
    • ‘Phone’ and ‘Website’ are missing (but the ACNC says that neither are compulsory.
  • Now the only thing is that ‘Next report due’ is incorrect.

Who are the people controlling the organisation?

  • Per the website:

http://tedsherwood.com/wp-content/uploads/2018/04/word-image-15.png

To whom is NBC accountable?

  • As a charity, to the ACNC.
  • And to the ACT regulator of incorporated associations.

 

 

  1. 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.
  1. The logo here is different to the one on the website.

 

Missions Interlink: charity review

Missions Interlink’ is a Christ-centred organisation, “the Australian network for global mission”. Although it calls for donations (see below), it is of more interest because it has a regulatory regime for its (Christ-centred) members. This is required because it offers its Members income tax exemption when they would not otherwise be eligible:

These Members, along with the lower-level members (called associates), have to accept a set of standards[1], so we would expect no less of the organisation itself. The introduction to the standards includes this statement:

http://tedsherwood.com/wp-content/uploads/2018/11/word-image-20.png

I sent a draft of this review to the charity. They did not respond.

There are only 12 members, six of whom are the directors [Board of Management Report, Financial Report 2018]. So there’s little accountability here.

Donations

Missions Interlink invites[2] its members, at the time of paying their annual membership fees, to donate to cover the 50% of its expenses that are not covered by those fees:

$108K was received in 2018 [Financial Report 2018].

The charities’ regulator, the ACNC, in their article, Donating to Legitimate Charities, gives “some things to consider to help you make sure your donation is going where it is intended”:

  1. Check the charity’s name.
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here’s the results for ‘Missions Interlink’[3] (MI), with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?[4].

1.  A search on the name ‘Missions Interlink’ on the ACNC Register of charities leads to four charities:

The only one that is still registered, Australian Evangelical Alliance Incorporated, comes up because ‘Missions Interlink’ is recorded under ‘Also known as’ on the Register. MI has registered ‘Missions Interlink’ as a business name (twice). And a number of other business names[5].

2. There is nothing to indicate that MI use professional collectors.

3. The “web address begins with ‘https’” and there is a “closed padlock symbol next to the web address in the address bar”, so the website is secure [the first ACNC article above]. There is a ‘Powered by Stripe’ logo at the bottom of the page on which you enter your information, but the logo is not linked to any information.

4. The Australian Business Register (linked from MI’s ACNC Register record), says that the charity is not entitled to receive tax deductible gifts[6]. MI is, however, a ‘legitimate’ charity.

5. Objectives/Mission

Neither ‘mission’ nor ‘objectives’ are mentioned on the website. In the Board of Management Report, in the Financial Report 2018, the ‘object’ of MI is given under ‘Principal Activities’[7]:

[8]

Activities[9]

From the Annual Information Statement (AIS) 2018[10]:

AEA MI have linked, equipped, served and represented organisations and churches across Australia to help them to engage more effectively in cross-cultural and global mission.

For more detail, see the Missions Interlink Annual Report 2018[11].

In March 2018, this was what was expected of the incoming National Director:

Although it is not made explicit in the ACNC material, the National Director ‘Opportunity Profile’ (created March 2018), shows that the focus of these activities is the MI members:

How this translated into dollars spent

The audited account of how donations are used is the Financial Report 2018 on the ACNC Register[12]. As one of the 145 members, can you ring MI’s office and request that they prepare financial statements that answer the question or questions you have about the charity? (The same question applies if you are one of the 407 staff [AIS 2018] and you are interested in checking out the organisation for whom you are working). I don’t think so. But the directors[13], with the agreement of the auditor (Matthew Hung, CA, rdl.accountants), say that you can:

So, the financial statements have not been drawn up to suit you.  Why, then, would you rely on them?

Even in the absence of this problem, there is a major question mark about the financial statements. 46% of the revenue, $512K, comes from a single item ‘’Other income – contributions from state branches on consolidation’. But there is no explanation of this item. The state branches still exist, and the accounts are for an individual entity, not a consolidated entity:

To add to the confusion, Note 14 shows that MI paid for the audit or one or more ‘subsidiaries’[14].

If you are happy to still consider donating (or volunteering), here’s what the financial statements say about where the donations went last year:

No further information is given about any of these items.

The average employee receives $66K in benefits [AIS 2018].

Outcomes/impact

No information found.

 

For more a more in-depth review, please contact me.

 

 

 

  1. MI considerthe implementation of Member Accreditation for compliance with standards’ as one of their achievements over the last 10 years. Other than getting the member to sign that they have adhered to the standards, there is no evidence of any compliance activity.
  2. Put this in your browser: site:missionsinterlink.org.au associate fees.
  3. See here for the previous review.
  4. Focus on the nature of the charity’s work, its beneficiaries and the impact the charity is having in the community.Is it clear what the charity is trying to achieve and how its activities work towards its objectives?Would you like to spend your money, or time if volunteering, to support these objectives?Is the charity being transparent about its activities? [A section in the article, Donating and Volunteering].
  5. Not only does it have other business names, but it has them spread across four entries in ASIC’s register:The third one is the one that holds the ‘Missions Interlink’ business name:

    The names in the other three entries are ‘Prime Timers’, ‘Christian Tucker – Just Tucker’, and ‘Christian Tucker – Just Tucker’ again.

  6. The section ‘Business name(s)’ is missing at least two names. As is the AIS 2018.
  7. This is substantially the same as clause 2 of MI’s Rules (its governing document).
  8. MI is not auspiced by AEA. It is AEA. There is no separate organisation Missions Interlink. It is a business name held by AEA.
  9. Although MI says, on the ACNC Register, that it operates in all states except the ACT.
  10. Lodged nearly three months later than the AIS was lodged last year.
  11. This was not lodged on the ACNC Register.
  12. The AIS shows that this was not lodged with the state regulator. This is because the law changed recently.
  13. All the directors are either a director or a senior executive of Christian charities that I have reviewed:Glenda de Jager: Secretary of the Board and National Director,Mukti AustraliaJohan Linder: Executive Director, OMF International

    Judith Kay: Church and Community Coordinator, Interserve Australia

    Omar Djoeandy: (ex-?) National Director, SIM

    Richard Dickens: Board Chairman, EA Foundation

    Sandra Punithan: Head of Finance, Pioneers of Australia

  14. With ‘Audit services – rdl.accountants including ‘preparation of the financial statements’ as well as ‘audit of the financial statements’, you could legitimately ask MI how their auditor maintained their all-important independence.

 

Compassion Australia: charity review

This is review in the series ‘Members of Missions Interlink’, Missions Interlink being ‘the Australian network for global mission’[1].

‘Compassion Australia’  is one such Member, and an organisation that seeks donations online.

Both Members and Associates have to accept a set of standards, the introduction to which includes this statement:

http://tedsherwood.com/wp-content/uploads/2018/11/word-image-20.png

This Member did not respond to a draft of this review.

The charities’ regulator, the ACNC, in their article, Donating to Legitimate Charities, gives “some things to consider to help you make sure your donation is going where it is intended”:

  1. Check the charity’s name.
  2. Ask for identification from anyone seeking a donation.
  3. Be careful of online requests for donations.
  4. No tax deduction doesn’t mean the charity is not a legitimate one.
  5. Find out more about how the charity says it uses donations.

Here’s the results for ‘Compassion Australia’[2], with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?[3].

1.  A search on the ACNC Register of charities gives a charity in that name (Compassion)[4].

2. Does Compassion use street collectors? I couldn’t find the answer to this on their website, nor in their Annual Report[5] (available on the ACNC Register). The method is not included in the (non-exhaustive) list of methods of promoting child sponsorship in Note 14 [Financial Report 2018].

3. The “web address begins with ‘https’ and there is a closed padlock symbol next to the web address in the address bar”, so the website is secure [the ACNC article above].

But on the giving page there is no mention of the security of your information.

4. The Australian Business Register (linked from Compassion’s ACNC Register record), says that the charity is entitled to receive tax deductible gifts. So is its fund ‘The Compassion Overseas Aid and Development Fund’ (the Fund).

For some reason only the Fund is mentioned in the FAQ ‘Are my donations to Compassion tax deductible?’:

Compassion explains the lack of tax deductibility in another FAQ (and adds a program not mentioned above):

I would have thought it difficult though to avoid ‘the promotion of a particular religious cause’ while the teaching of the children was ‘Christian teaching’ done by a local Christian church:

It appears though that Christian teaching can be done without sharing the Gospel:

Perhaps the answer lies in the fact that they do not require the children to become Christians:

5. The use of your donations

Here’s why Compassion thinks that you are safe in trusting them with your donation:

  • Fundraising Institute Australia (FIA):
    • Compassion membership confirmed.
    • The accountability is principally over dealing with you as a donor. You can access the Code with which Compassion must comply from the link in the middle of this page.
    • A Code Authority ‘Is responsible for the effective operation and administration of the Code including monitoring, complaints handling and appeals’ [Administration of the Code, Guidelines]. However, there is no further mention of monitoring in the Guidelines.
  • Missions Interlink:
    • No, the FIA does not require membership of Missions Interlink.
    • Here are the standards.
    • My experience from doing hundreds of reviews says that the members have little to fear from any monitoring of compliance with these standards.
      • And see this review.
  • Bentleys Brisbane (Audit) Pty Ltd: It is not correct to say that this firm, or any other firm, audits Compassion. They audit Compassion’s annual financial statements, something far less than Compassion’s entire operations, and even this is subject to clear limitations (see, here and here).
  • Internal audit: This is Compassion checking on itself. Does Compassion have the strongest version of this internal control, including the internal auditor reporting to the board?
  • Compassion says that it cannot be a member of the organisation representing aid and development organisations, an organisation that has an accountability regime:

    • Compassion doesn’t explain why operating through a church stops them from being a member. I can see nothing in the AICD material that automatically makes Compassion ineligible for membership.
  • It says it must comply with AusAid’s guidelines for overseas aid organisation. However, it is not an Australian accredited NGO, so is not subject to the Department of Foreign Affairs and Trade’s accountability.
  • For a public company like Compassion, the members, if sufficient in number, and independent of management, can be a source of accountability on the board (and therefore management). But Compassion has only seven members, and since the Constitution (see the ACNC Register) requires directors to be members, it is likely that, with seven directors, there are no members outside of board members. So, no accountability there.

Activities

From the Directors’ Report (in the Financial Report 2018):

They do this, almost completely (see below), through child sponsorship:

This is the ‘unique approach’:

And here is what is done with the child:

Despite the evidence for cash transfers to the poor, for instance, here, Compassion rarely uses them, and doesn’t explain why:

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.

Compassion is only tangentially involved in community development:

Giving options

  • 13 of them. For only two of them is tax deductibility mentioned: ‘yes’ for the ‘Christmas Gift Fund’ and ‘no’ for the ‘Bible Fund’.
  • The giving page does not mention whether your money goes to Compassion generally or to the Fund. But elsewhere we are told that all donations go to the Fund:

What about the non-tax-deductible programs?

The Fund is not mentioned in the Financial Report.

Donations received

This is disclosed as a single line in a Note: ‘Sponsorships and donations 84,237,330’. So, no distinction between tax-deductible and on tax-deductible money, nor reporting to match your giving options (see above).

Cash spent

The audited account of how donations are used is the Financial Report 2018 on the ACNC Register.

This is the only information about where the cash went on operating activities:

[6]

Resources consumed (i.e. accrual)

The accrual section of the Report is more helpful (although not very helpful):

None of these terms are defined in the Report[7].

Notes 3 and 4 give us ‘Employee benefits expense; (13.6% of expenses), interest expense (negligible), ‘Depreciation and amortization expense’ (1.5%), and ‘Audit services’ ($30K).

But there is no further information on the expenses in the extract above.

Compassion claims that ‘approximately 80 per cent [of funds raised] is used for the direct benefit of children in our programs’:

[8]

But notice that their definition of ‘direct’ is wider than we might normally think it to be: it includes ‘Advocacy expenses’ (most likely the ‘For community education in Australia’ on page 9 of the Annual Report), and ‘Program support expenses’. These two add to 11% of the expenses.

‘Funds movement’

Compassion includes further information about inflows and outflows in the Notes to the accounts:

There is no explanation anywhere of

  • The relationship between these fourteen funds or programs and the 13 giving options.
    • There are some new terms that are unexplained.
  • The meaning of ‘funds’. How does it relate to ‘expenses’ and cash payments?
  • Why a ‘Funds movement schedule’ is included.
  • How the individual expenses relate to the expenses from the accrual statement (above).

Destination of the ‘funds’, operating cash outflow or ‘Program expenses’

There is no disclosure of the geographical destination of your funds.

How they ensured that the money was used for the purpose for which you gave it

Other than indirectly via the description of internal audit function (see above), there is no information.

Impact

Compassion use a research result[9] published six years to support the efficacy of their method of child development:

Nothing more recent or done by Compassion itself found.

 

Please contact me if you need a more in-depth review.

 

 

 

  1. https://missionsinterlink.org.au/about/
  2. See here for my last review.
  3. Focus on the nature of the charity’s work, its beneficiaries and the impact the charity is having in the community.Is it clear what the charity is trying to achieve and how its activities work towards its objectives?Would you like to spend your money, or time if volunteering, to support these objectives?Is the charity being transparent about its activities? [A section in the article, Donating and Volunteering].
  4. It has two business names: Compassion Child Sponsorship and Partners of Compassion [www.asic.gov.au]. 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.
  5. Care: both the Annual Report and the Financial Report 2018 are labelled ‘Annual report’.
  6. Although this level of disclosure may be compliant with the letter of the applicable Accounting Standard ( AASB 107), it is not consistent with either the intent of the Standard and paragraphs 14 and 19, or what is reasonable to expect from a major Christ-led charity that is reporting a true and fair view.
  7. The Annual Report has definitions for two of them:
  8. Notice that this is not an answer to the question.
  9. The FAQ mentions only the journal and the year, 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