Church Missionary Society Victoria Inc: mini-charity review

Mini-charity review of Church Missionary Society Victoria Inc (CMS-V), an organisation that seeks donations and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

For the previous review, see here.

Are they responsive to feedback?[1]

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

Is CMS-V registered?

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

What do they do?

Does CMS-V share the Gospel?[3]

  • No.

What impact are they having?

  • Nothing systematic found.

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

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

Do they pay their board members?

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

Can you get a tax deduction?

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

Is their online giving secure?

  • Security is not mentioned.

Is their reporting up-to-date?

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

Does their reporting comply with the regulator’s requirements?

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

What financial situation was shown by that Report?

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

What did the auditor say about the last financial statements?

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

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

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

  • The ‘Give’ menu item goes to the ‘Donation Forms’ page belonging to ‘CMS Australia’. From there the forms give you these options:
    • General Missionary Support’
    • ‘General Tax Deductible (sic) Gift’
    • ‘A particular worker’ (with a dropdown listing all the workers)
    • ‘Other’

Where were your (net) donations sent?

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

Who are the people controlling the organisation?

To whom are CMS-V accountable?

 

 

 

  1. I agree with Randy Alcorn [Money, Possessions, & Eternity, Tyndale, 2003] when he says that ‘Any Christian leaders who resist financial accountability make themselves suspect.’ [page 425].
  2. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions.
  3. Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14.
  4. The donations belonging to the other charity are not included either revenue or expenses (Note 4).
  5. Here’s a list:
    • Missing Notes:
      • Critical accounting estimates, judgements and assumptions
      • Contingent liabilities
      • Events after the reporting period
    • The ‘Revenue and Other Income’ Note implies that CMS-V believe that donations collected on their behalf become their monies at the point of collection, e.g. within churches? If so, is this valid?
    • The lack of a heading list for expenses confuses revenue with expenses.
    • ‘Operating’ and ‘non-operating’ is neither a helpful nor a current distinction.
    • Note 2 should show ‘Sales revenue’ and ‘Other revenue’.
    • The item ‘Bequest income ($156K) under revenue confuses bequests received with income on invested bequests.
    • Administration expense is not disclosed.
    • Missing from Note 1:
      • the type of entity (individual, not-for-profit), functional and presentation currency,
      • date the accounts were authorised for issue.
      • which Accounting Standards they complied with.
    • Missing from the ‘Property, Plant and Equipment’ Note:
      • the useful lives adopted
      • policies on the review of the depreciation factors and
      • the derecognition policy
    • Missing from the ‘Employee Benefits’ Note
      • What are these benefits?
      • There is normally a distinction between short-term and long-term benefits.
      • Defined benefit superannuation contributions?
    • Missing from the ‘Goods and Services Tax (GST)’ Note: GST on commitments and contingencies?
    • Missing policy Notes:
      • New, revised or amending Accounting Standards and Interpretations adopted
      • Current and non-current classification
      • Impairment of non-financial assets
      • Fair value measurement

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