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”:
- Check the charity’s name
- Ask for identification from anyone seeking a donation.
- Be careful of online requests for donations.
- No tax deduction doesn’t mean the charity is not a legitimate one.
- Find out more about how the charity says it uses donations.
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]. And PayPal is used, so your credit card information is secure.
4. There is no mention of a tax deduction on the ‘Donate’ page, which fits with the ‘Deductible gift recipient status’ shown on the Australian Business Register. LP is a ‘legitimate’ charity though.
5. The audited account of how the donations are used is the Financial Report 2017 on the ACNC Register. Within that there are two statements that give information on how the donations were used. Most donors think in terms of cash, so if that’s you, you might turn first to the Statement of Cash Flows. What you might not know though, is that you first should turn to the Notes to the accounts (Notes to the Financial Statements in this case) to check out the ‘Basis of preparation’.
Do you provide or give things to, receive things from, or have oversight of, or review, of the LP? Perhaps you intend to donate or are one of the donors who together gave $582K last year [Financial Report 2017]? Perhaps you are one of the suppliers who shared in the $371K of payments? [Financial Report 2017], or one of their 25 volunteers [AIS 2017]. If so, can you ring LP’s office and request that they prepare financial statements that answer the question or questions you have about the charity? I very much doubt it. You are therefore ‘potentially interested in the information provided in general purpose reports’.
You are therefore in the wrong place – I only have access to the published accounts of LP, and the directors, with the agreement of the auditor, have again produced the lower standard special purpose financial statements. This is because they think that you don’t exist.
Even if this type of financial statements was reasonable,
- The auditor has not produced a report that complies with his professional requirements.
- The directors have produced financial statements that fall short of what is required.
If LP is still in the running for your business, and still on No. 5 (above) –
- There is no explanation of the four ‘Program’ expense items, and the breakup of the amounts mostly doesn’t give the destination of the money.
- The measures taken, if any, to ensure that the money was used for the purpose for which it was given, are not discussed.
LP chose not to respond to a draft of this review.
Contact me if you need a more in-depth review.
- See here for last year’s review. ↑
- A section in the article, Donating and Volunteering:
- 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?
- The ACNC implies, therefore, that it is a ‘legitimate’ charity. But this is not correct – as the ACNC itself points out, registration is voluntary. ↑
- From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au: ↑ ↑
- The people shown here. After removing the Public Officer and adding Grant Robinson, this list matches the ‘Responsible Persons’ on the ACNC Register. ↑