Leading the Way with Dr. Michael Youssef Australia Limited: charity review

That’s the business of this charity – Biblical teaching broadcasts by Dr Michael Youssef.

Through these broadcasts, and an online invitation to give, the charity took in $2.29 million in donations last year[1].

They say that they have ‘a reputation for accountability’:

But both these organisations are American, and as the Australian charity is independent, this membership and this rating is of little relevance to Australian donors.

The charity is not accredited with the Australian body, the CMA Standards Council.

The usual disclosure about the members’ guarantee is lacking the number of members, so it is not possible to assess the accountability from this quarter.

As for the accountability on the staff, a board of six[2], when one of those six is the chief worker, another his wife, and a third the Regional Director Australia & New Zealand[3], and a fourth has been a director for 22 years, is open to question.

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

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 ‘Leading the Way’ (LTW), 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 ‘Leading the Way’ on the ACNC Register of charities leads to two charities:

That it is the second one[5] is confirmed by the website:

LTW has no business names registered, so it should not be trading under the name ‘Leading the Way’[6].

Although it is a registered Australian charity, the power of the US charity, Leading the Way with Dr Michael Youssef, Inc, to appoint a majority of the Australian board[7] means that it is controlled by the US charity:

2. There is nothing to indicate that LTW use third party 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 ‘SecureTrust’ logo two pages before you enter your information, but the certification is for the US organisation.

4. The Australian Business Register (linked from LTW’s ACNC Register record), says that the charity is not entitled to receive tax deductible gifts[8].

However, this is contradicted on the giving page for one of the projects:

There is no explanation for this contradiction.

5. Objectives/Mission

Neither ‘mission’ nor ‘objectives’ are mentioned on the website. In the Director’s (sic) Report[9], in the Financial Report 2018, the ‘objectives’ of LTW are given under ‘Principal Activities’:

Activities

From the Annual Information Statement (AIS) 2018:

Broadcasting the teaching of Dr Michael Youssef across Australia via various media platforms and raising support for various ministry activities.

There may be more in the Annual Report 2018, but the link from the ACNC Register is dead.

How this translated into dollars spent

The audited account of how donations are used is the Financial Report 2018 on the ACNC Register. However, there is a major issue with this Report: it does not report on all the results or position of LTW. The other charity above, Leading the Way Media Broadcasting Trust, is controlled by exactly the same people as those who control LTW, yet is not included with LTW’s results. ‘Donations and Sponsorships’, for instance, should be another $1.13 million (making the total over 100% higher).

It was not possible to even manually add the two sets of figures – the ACNC Register had a single page with the message ‘Placeholder file uploaded by administrator to fix error on form’ in place of the Financial Report 2018.

If you are still prepared to consider donating, here’s the audited figures for LTW’s spending (without the Trust) [10]:

No explanation is given for ‘Other expenses’, 38% of the total, nor ‘Project reserve expenses’, 13% of the total[11]. (There a ‘Detailed Profit or Loss Statement’, but it is unaudited, and because it uses a different classification of expenses, is of little help.)

The average full-time employee benefits was $68K [AIS 2018].

Outcomes/impact

No information found.

 

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

 

 

  1. They may be open to you volunteering, but they didn’t have any volunteers when they reported in their Annual Information Statement (AIS) 2018.
  2. I don’t believe that the Secretary is a ‘responsible person’.
  3. Here are the current ‘responsible persons’:Christopher MakinCraig GribbleElizabeth Youssef

    Graeme Blaiklock

    Michael Youssef

    Peter King

    Phillip Cave

  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. The inclusion of his name, done in 2000, is interesting given what what he says on the website:cid:image005.png@01D4E335.EEB26EB0
  6. Up until late 2000, its name was a little closer to the one that it uses now, ‘Leading the Way Australia Limited.’
  7. From the constitution, ACNC Register.
  8. LTW is, however, a ‘legitimate’ charity.
  9. Which is, like the Directors’ Declaration, unsigned. The latter is audited.
  10. It was not possible to see the expenses of the Trust – the Register had a single page with the message ‘Placeholder file uploaded by administrator to fix error on form’ in place of the Financial Report 2018.
  11. The single Note that is there provides no extra information.

 

Barnabas Fund (Australia) Ltd: charity review

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

Barnabas Fund (Australia) Ltd‘ is one such Member[2], 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

The response of this member, via the CEO, Ashley Saunders, is included immediately below and where applicable throughout the review.

‘As you know, we have entered into correspondence with you regarding your previous ‘review,’ [3]however you have not agreed to remove that publication owing to its factual and other errors . We are entering into correspondence with you regarding this ‘review’ and we trust that you both take the opportunity to amend this ‘review’ in light of our comments, and to ensuring that our comments are fully and correctly recorded in any ‘review’ you publish.’

Reviewer’s response: Despite a response to the draft review that was seventeen months after the invitation, we carefully considered what Ashley had to say. We made a few changes, but nothing he said gave us reason to accede to his request for the review to be withdrawn.

For the current review, we have updated it for the fact that Missions Interlink now uses the correct name of the charity, but that is the only change that was necessary as a result of his comments.

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 are the results for ‘Barnabas Fund (Australia) Ltd’[4], with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?[5].

  1. A search on the ACNC Register of charities gives a charity with that name (Barnabas).
  2. Does Barnabas use street collectors? There is no mention of them on the website.

The CEO’s comment:We do not mention the use of street collectors on our website because we do not use them.’

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].

On the giving page it says, ‘Donate securely’, but doesn’t give the basis for that claim.

The CEO’s comment: ‘You have already noted that the website is secure.’

Reviewer’s response: Many charities consider it wise to assure their donors, before they are asked to enter their personal information, including their credit card details, that their information is secure. They do this by stating the name of the service that provides that security, with a link to the site of that service.

4. The Australian Business Register (linked from Barnabas’ ACNC Register record), says that the charity is not entitled to receive tax deductible gifts. But it is a ‘legitimate’ charity’.

  • Although not entitled itself, Barnabas controls, via another public company, Barnabas Relief Education and Development Ltd, a fund that can accept tax deductible donations. However, as was the case in my last review, there is no mention of this fund either on the website or in the Financial Report 2018[6].

The CEO’s comment: As you note, Barnabas Relief Education and Development Ltd is a separate entity. Although I have no involvement with that company, so far as I am aware it cannot at this stage accept tax deductible donations.

Further, as you are aware, whether an organisation can or cannot accept tax deductible donations does not impact its legitimate status as a charitable organisation.’

Reviewer’ response: There was no suggestion that (1) the company can accept tax deductible donations, and (2) the company was or was not a charity. The comment is about the fund that Barnabas controls.

5. Activities

  • ‘What we do’ on the website is not about Australia, but the international organisation generally.
  • Likewise, for the second to fourth sections under ‘Activities and Beneficiaries’ in the AIS 2018.
  • The fifth section, however, describes what Barnabas did in 2018:

  • BFA operates overseas, per the ACNC Register, in United Kingdom and United States. They send money to the US, but the UK?

The CEO’s comment: ‘Consistent with the section of our 2018 AIS which you have copied (above), funds raised are primarily directed to Christian Relief International (CRI), a USA-based charity with similar objectives to Barnabas Fund (Australia) Limited. The management of the expenditure into the countries we work in is managed by our International projects team based in Pewsey, Wiltshire, UK.’

Reviewer’s response: Barnabas, the Australian charity being reviewed, therefore does not operate in the UK.

How it says it uses donations

The audited account of how donations are used is the Financial Report 2018 on the ACNC Register. Do you provide or give things to, receive things from, or have oversight of, or review, of Barnabas[7][vii]? Perhaps you intend to donate or are one of the people who gave $5.49 million (excluding bequests) [Financial Report 2018]. Do you depend on a regulator to ensure that you are provided with suitable financial statements (called general purpose financial statements)? In other words, can you ring Barnabas’ office and request that they prepare financial statements that answer the question or questions you have about the charity? Highly unlikely. Yet the directors[8], with the agreement of the auditor[9], say you can:

The CEO’s comment: ‘We regularly communicate with donors, and field questions regarding the expenditure of funds raised. The financial statements prepared and lodged with the ACNC meet the requirements of the Australian Charities and Not-for-Profits Commission Act 2012.’

Reviewer’s response: (a) Answering donors’ questions is not a substitute for publishing information about where their money goes. (b) The fact that accounts have been lodged on the ACNC Register does not automatically mean that they comply with the ACNC’s requirements.

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

The CEO’ comment: We reject your statement that “the financial statements have not been drawn up to suit you,” and your conclusion that they should not be relied upon – which we find to be an objectionable assertion which we invite you to withdraw.’

Reviewer’s response: If there are ‘users who are dependent on [Barnabas’] general purpose financial reports’ – an assertion that is supported by the evidence – then the claim is correct.

However, should you choose to do so[10], here is where the donations went:

The destination of the ‘charitable expenditure’ is not disclosed. (Note the absence of Notes explaining any of the material items.)

The CEO’s comment: ‘We communicate regularly with donors regarding the expenditure of funds raised. As mentioned above, the financial statements lodged with the ACNC meet the requirements of the relevant legislation.’

Reviewer’s response: See our first response in this section.

In the Directors’ Report [Financial Report 2018], which is not a report that is audited, we are told that the ‘majority of contributions’ are sent to a US organisation:

The CEO’s comment: ‘Our financial statements are audited annually and, as we have mentioned to you in previous correspondence, we have never received a qualified audit. We invite you to withdraw your above statement – which we believe can only be included so as to infer a degree of irregularity that is neither appropriate nor warranted.’

Reviewer’s comment: No suggestion of irregularity was either made or inferred – the Directors’ Report is never part of the financial statements required by the Accounting Standards, and is therefore not audited.

This is an organisation independent of the Barnabas group of organisations:

No explanation is given by Barnabas for directing the money to CRI rather than to the US Barnabas organisation. In fact, there is no reference to CRI on the Barnabas website, and only one incidental reference on the main Barnabas Fund website.

The CEO’s comment:The section quoted by you (above) outlines the nature of our association with CRI. You have also previously quoted from another section of our 2018 AIS that comments on the management of the expenditure into the countries we work in by our International projects team based in Pewsey, Wiltshire, UK.’

Reviewer’s response: This explains neither the use of an outside organisation rather than a Barnabas organisation, nor the lack of information on the websites.

There is no disclosure of what happens to the money after it reaches CRI. The CRI website has no information about CRI other than what I have quoted above.

The CEO’s comment: ‘As mentioned previously, we regularly communicate with donors regarding the use of the funds raised. If you would like to receive our regular communications, we would be pleased to add you to our list of recipients. Indeed, this is a significant aspect of charitable operations that you ignore in your ‘review’ – we take pleasure in engaging directly with donors through regular communications and ad hoc telephone calls or personal meetings; the purpose of financial statements lodged with the ACNC is for public accountability – and as I have indicated on a number of occasions, our financial statements lodged with the ACNC meet the required standards.’

Reviewer’s response: (a) Whether or not Barnabas communicates with donors outside the documents on the ACNC Register and its website was outside the coverage of this review (see the fifth paragraph above for that coverage). (b) The existence of accounts on the ACNC Register is not a guarantee that they comply with the ACNC’s requirements. (c) As is shown by the practice of many other charities, what happens to donors’ money can be part of ‘public accountability’.

Unlike Barnabas in the US, CRI is not a member of the Evangelical Council for Financial Accountability (ECFA).

Impact

The question of the impact of your donations is not addressed anywhere. (There is no Annual Report[11].)

The CEO’s comment:May I please point out for a final time: the documents lodged with the ACNC meet the required standards. We communicate regularly with donors regarding the use of the funds raised, and report to them on the impact of their gifts.’

Reviewer’s response: (a) Other than an audit report, no support for the claim of compliance has been offered. (b) As shown by many other charities, even those not subject to the higher standards of Christ-centered charities, the impact of donations can be part of public accountability.

 

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

 

 

  1. https://missionsinterlink.org.au/about/
  2. http://tedsherwood.com/wp-content/uploads/2018/11/word-image-21.png
  3. From the MacMillan Dictionary Blog: ‘Quotation marks can also highlight that a word is being used somehow peculiarly – a writer may wish to indicate irony, inaccuracy, or scepticism, for example; used this way, they’re called scare quotes. In the line: At the party I met a teacher, a journalist, and an ‘artist’, the scare quotes around artist act as a distancing device, probably signalling doubt about the person’s credentials as an artist. The effect is similar to the Irish phrase mar dhea.’
  4. See here for my last review.
  5. 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].
  6. The Financial Report 2018 says that
  7. [vii] From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au: http://tedsherwood.com/wp-content/uploads/2018/08/word-image-15.png  
  8. Anne WillettAshley Saunders is the CEO of BarnabasCaroline Kerslake is a board member of the UK Barnabas organisationColin Johnston was the Managing Director of Barnabas until Ashley started

    Ian Clarkson

    Kakha Tsagareli – this one?

    Rosemary Soohkdeo, another board member of the UK Barnabas organisation

  9. Cameron Bradley, of PKF Hacketts Audit.
  10. If you do decide to persist, I suggest that you read my previous review. Most the accounting and reporting issues identified there remain.
  11. Although ‘Documents’ on the ACNC Register lists an ‘Annual Report’, this document not what the ACNC, and most others, mean by an ‘annual report’. It is merely another copy of the Financial Report 2018.