Far East Broadcasting Co (Australia): charity review

This is a charity review of Far East Broadcasting Co (Australia) (FEBC), an organisation that seeks donations online[1]. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

To see the situation last year, read this review.

Are they responsive to feedback?

  • I sent them a draft of this review. They…did not respond[2].

Is FEBC registered?

  • As a charity, yes.
    • FEBC reports as part of an ACNC reporting group (the Group). The other members of the group are FEBC Overseas Fund (the Fund), and FEBC Relief Limited (Relief).
      • There’s another company with ‘FEBC’ in its name, FEBC Custodian Limited. Note 17 in the Financial Report (see below) says that this company ‘was established solely to act as trustee for the FEBC Overseas Aid Fund’. It has not been included in the Group[3].
  • FEBC is a public company, a company limited by guarantee.
    • It is permitted to omit ‘Ltd/Limited’ from its name.
  • FEBC holds the business name FEBC Australia, the name it trades under.
  • FEBC is a fundraising vehicle that operates, the ACNC Register says, in all eight states. It also has an internet invitation to donate. It is exempt from registering to fundraise in New South Wales, and has a licence in Queensland and Victoria. No explanation was found for why there is no licence in South Australia or Western Australia[4].
  • The Fund:
    • A public ancillary fund[5].
    • No business names held.
    • Operates, the ACNC Register says, in all eight states. And asks for donations online. But has a fundraising licence only in South Australia[6].
  • Relief:
    • Is a public company, a company limited by guarantee;.
      • It is permitted to omit ‘Ltd/Limited’ from its name.
    • No business names held.
    • Operates, the ACNC Register says, in all eight states, and asks for donations online.
      • But has a fundraising licence only in South Australia, Victoria and Western.[7]

What does FEBC do?

  • ‘About Us’ on the website is not about FEBC, but the international FEBC organisation generally.
  • Here’s what FEBC did in 2017 (from the AIS 2017):
    • In the last financial year, FEBC Australia had (sic) worked hard to effectively communicate needs, relay stories, share prayer points and write up project submissions to raise financial support for overseas projects… (The remainder of their description is about the worldwide FEBC ministry rather than Australian activities.)
  • FEBC operates overseas. The ACNC says that it is in 14 countries, the Annual Report (page 16) 16.
    • The 16 countries are the countries that received ‘Disbursements To Projects and Field…’. Whether this money is sent direct to these countries or via FEBC International or an FEBC office overseas is not disclosed.
  • The Fund: Other than a mention in two superseded Annual Reports, there is no reference to the Fund on the website.
  • Relief: See here.

Do they share the Gospel[8]?

  • No.
    • But they raise money for others that do.
  • The Fund: Not disclosed.
  • Relief: Not disclosed – although with tax deductibility, I doubt it.

What impact are they having?

  • Some anecdotal reports in the Annual Report 2016-2017, and on the website, but nothing systematic.
  • This comment in the Annual Report implies that each radio is heard by 25.12 people:

  • And the statement implies that every listener is changed.
  • The impact is not specified though. Similarly, with the statistic on the ‘Ways to Give’ page:

  • The Fund: No information found.
  • Relief: No information found.

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

  • If we define ‘International Programs’ expense as the expenses that are direct to delivery of the impact, ‘administration’ is 28%.
  • The Fund: Not separately shown.
  • Relief: Not separately shown.

Do they pay their directors?

  • Note 17 to the accounts says that ‘No director received any remuneration’.

Can you get a tax deduction?

  • Not to FEBC, but you can if you donate to Relief.
    • How this fits with their mission – Our goal is to communicate the Good News among the nations by media to inspire people to follow Jesus Christ – is not explained.
  • The Fund: Yes (a public ancillary fund that must give to a deductible gift recipient organisation).
  • Relief: Yes

Is their online giving secure?

  • They have a https URL preceded by a green padlock, so yes.
  • The Fund: as for FEBC
  • Relief: as for FEBC

Where were your (net) donations sent?

  • There is a bar chart in the Annual Report 2016-2017 showing the percentage sent to each of 16 countries, but there is no information in the Financial Report 2017.

Is their reporting up-to-date?

  • Yes (lodged five 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 that finished nine months ago.
  • The Fund: doesn’t report separately
  • Relief: doesn’t report separately

Does their reporting comply with the regulator’s requirements?

  • Group AIS 2017: No
    • Most of what is under ‘activities’ is about the FEBC organisation overseas.
    • No outcomes are reported.
    • The list of countries is one sort of that for FEBC.
    • ‘Other income’ does not match the same item in the financial statements.
  • Group Financial Report 2017: Above the minimum, yes, but not anywhere near ‘the utmost integrity’ [footnote viii]. Like last year
    • There is no explanation for
      • the inclusion of a second income statement, Income Statement for ACFID purposes, especially when FEBC is not a member of the ACFID (Australian Council for International Development); and
      • the relationship between the two statements.
    • Statement of Income and Other Comprehensive Income
      • There is no explanation for
        • Revenue, and
        • The item that comprises 77% of expenses, ‘Other expenses…’
    • Income Statement for ACFID purposes
      • There is no explanation of the terms used.
      • A note says that ‘Direct and indirect costs have been allocated using an activity based absorption costing approach.’, but no explanation of this approach is given.
      • The Annual Report (page 13) says that their ‘activity based (sic) absorption costing approach’ includes ‘Showing details of FEBC Australia’s international programs either by program or by country’. There is no such disclosure in the Financial Report.
    • Balance Sheet
      • There is no explanation for how a Group of this size was able to operate an office without any ‘Furniture, Fittings and Office Equipment’?
      • The treatment of ‘Financial Assets’ does not appear to be compliant with the Accounting Standards.
        • There is a ‘Change in Fair Value of Financial Assets’ included in profit or loss.
      • ‘Land and Buildings’ consist of two properties in Caringbah.
        • How was the combined cost only $93K?
        • Should one be classified as investment property?
  • The Fund: doesn’t report separately
  • Relief: doesn’t report separately

What financial situation was shown by that Report?

  • The surplus as a percentage of income declined slightly, from less than one half a per cent positive to the same figure but negative.
  • Working capital (current assets less current liabilities) is strongly positive.
  • With minimal non-current liabilities, longer term financial structure appears sound.
  • The Fund: doesn’t report separately
  • Relief: doesn’t report separately

What did the auditor say about the last financial statements?

  • The auditor, Lawrence R Green FCA, of Shedden & Green Partners, issued a ‘clean’ opinion.
    • To take the right amount of comfort from a ‘clean opinion’, please read here and here.
    • His report misnames two of the reports and includes a reference to an Act that FEBC is not required to comply with.
  • The Fund: not separately audited
  • Relief: not separately audited

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

  • Group: No
    • Overseas is not mentioned under ‘Who the Group Benefits’.
    • The number of countries is one short of the number shown by FEBC.
  • FEBC: No
    • Overseas is not mentioned under ‘Who the Charity Benefits’.
    • Did FEBC operate in all 14 countries listed under ‘Operates in (Countries)?
    • ‘Phone’ and ‘Website’ are blank, but the ACNC says that they are not compulsory.
  • The Fund: ‘General community in Australia’ is not correct for ‘Who the Charity Benefits’. (‘Phone’ and ‘Website’ are blank, but the ACNC says that these are not compulsory.)
  • Relief: ‘Size of Charity’ is blank. (‘Email’ and ‘Website’ are blank, but the ACNC they are not compulsory.)

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

  • Quite a few, presented a little confusingly.
  • Under the ‘Donate’ button in the main menu, other than being able to write in the name of a tax-deductible project, there is only one.
  • But to ‘donate’ is not the only way to give. Under ‘Get involved’/ ‘Ways to Give’ in the main menu, there are these three options:
    • ‘Give a radio’
      • Why is there a box to write the name of a tax-deducible project?
    • ‘Give to a project’
      • 12 projects (one of which is a radio, which is also a gift (see below), and a separate option (see above).
    • ‘Give a gift’
      • “The page you are looking for is no longer here, or never existed in the first place (bummer).”
  • The Fund: Not distinguished from FEBC (above).
  • Relief: Not distinguished from FEBC (above).

Who are the people controlling the organisation?

  • Not shown on the website, but the ACNC Register shows them (under ‘Responsible Persons’):
  • Six board meetings were held during the year. Peter Elliott attended four, Vanessa Hall only three.
  • There are 11 directorships on the ACNC Register in the name ‘David McDonald’. And the register only covers charities, not all not-for-profits, and of course no for-profit organisations.  Therefore, if after eliminating the charities for which FEBC’s David McDonald is not a director, you are left with the total being more than a handful or so, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.
  • The board is accountable to the members. They were 47 members at year-end (unchanged from last year).
  • The Fund: Elliott, Keegan, McDonald and Tant above.
  • Relief: the same four as The Fund

To whom are FEBC accountable?

  • The following five logos and one button appear at the bottom of the About Us page on the website:

    • The ‘FIA’ is Fundraising Institute Australia. Members must comply with its fundraising standards. FIA membership confirmed.
    • FEBC International is ‘an interdenominational radio network ministry, which brings the love of God to the world by broadcasting the gospel of Jesus Christ.’[10] Organisationally it is also a company in Singapore that provides services to the national organisations, including FEBC. There doesn’t appear to be any accountability involved.
    • Global Development Group is a charity, an “Australian-founded non-government overseas humanitarian development organisation”. FEBC is not accountable to it.
    • Missions Interlink has an accountability regime.
      • For one opinion on the strength of this accountability, see the section Activities in this review.
    • The last logo is ACNC’s ‘Charity Tick’.  It is used to show that FEBC is registered.  Rightly so, because it would be unwise to give to a charity that is unregistered.
    • Beyond registration, the ‘tick’ only means that the charity’s AIS is not overdue, and that no compliance action has been take against it.
    • The ‘FEBC Policies, Terms & Conditions’, leading as it does to a policy on feedback/complaints, shows that FEBC believes that it is accountable to its stakeholders.
  • Elsewhere, FEBC displays a seal issued by the CMA Standards Council:

[11]

  • One of the FEBC board members, Vanessa Hall, is the Chair of this Council (‘CMA Standards Panel’ on her profile), the body that accredited FEBC.
  • The Fund: Not separately identified.
  • Relief: Not separately identified.

 

 

  1. Although the button is called ‘Donate’, maybe it will change to ‘Support us’:I think they mean ‘name recognition’, not ‘name acquisition’.
  2. Last year, when sent a draft of this review, they responded quickly. However, they did not want to either suggest corrections or submit comments for publication.
  3. Whether this is because it was not included in the application to the ACNC, or whether the ACNC refused the request, is not known.
  4. No search of Tasmanian licences was possible.
  5. The ABN record incorrectly records (a) the ‘Entity name’ as The Trustee for FEBC Overseas Fund’ (the trustee is FEBC Custodian Limited), (b) the ‘Entity type’ as ‘Discretionary investment trust’.
  6. No search of Tasmanian licences was possible.
  7. No search of Tasmanian licences was possible.
  8. 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.
  9. His description for FEBC is ‘Civil Rights and Social Action’.
  10. FEBC Annual Report 2016-17, page 3.
  11. This ‘passing grade’ does not, as is claimed in the Annual Report 2016-2017, show ‘clearly that FEBC carries out tremendous work across the world, bringing hope, changing lives, with utmost integrity’. There’s nothing in the accreditation about impact, nor enough to warrant claiming that level of integrity.

 

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