Steer Incorporated: charity review

Mini charity review of Steer Incorporated (Steer)

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

as an organisation that seeks donations. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

2018 review:

  • Steer is still a Member of Missions Interlink[1], an organisation that gives Members an income tax exemption[2].
  • Members of Missions Interlink have to accept a set of standards, the introduction to which includes this statement:

Are they responsive to feedback?[3]

  • When sent a draft of this review, they did not respond.
  • 2018 review: They did not respond to a draft of this review.

Is Steer registered?

  • As a charity, yes.
  • Other registrations:
    • As a public company, a company limited by guarantee (despite the ‘Incorporated’ in its name).
    • Not registered for fundraising in any of the seven six states that have a fundraising licence regime. This includes the five states in which Steer operates (or eight if we go by their AIS 2015).
      • The law in this area is not straightforward – is an internet invitation ‘fundraising’ for instance? – and advice varies, so check with the charity before drawing any conclusions.

What do they do?

  • You place – either give or sell – income-earning assets with them; they manage these assets and distribute the income, tax-free, to missions.

Do they share the Gospel?

  • No

What impact are they making?

  • Nothing found.

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

  • If ‘direct’ is defined as ‘Gifts to missionary organisations’, then 15% 16.4%.

Can you get a tax deduction?

  • No

Is their online giving secure?

  • NA.

Is their reporting up-to-date?

  • Yes (lodged five and a half months after their year-end).
    • 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 five months ago.

Does their reporting comply with the regulator’s requirements?

  • AIS 2015 AIS2017 : Not quite. There are no outcomes given, and a number of the figures in the Income Statement do not match those in the Financial Report.
  • Financial Report 2015: No
    • There is no audit report.
    • The directors have decided that Steer, an organisation that received $4.76 m in revenue, including $2.42 m in gifts, operates in five (maybe eight) states, and appeals publicly for donations, has no users, either present or prospective, who rely on the financial statements to make decisions. This means that they can produce special purpose financial statements, statements that do not have to comply with all the Accounting Standards.
    • Two of the programs for donors are the leasing, at a peppercorn rental, of agricultural land and rental properties.
      • There is no split between the two types of properties.
      • There is no identification of these leases as either operating or finance.
      • There is no policy note on accounting for the rental payment – is it just the peppercorn amount?
    • Another of the programs is ‘Livestock and wool’. This program results in Steer taking ownership, either for no consideration or some, presumably nominal, consideration, of livestock.
      • These livestock are not included in the accounts. Steer says that the geographical location and diversity of these assets mean that valuation is not worth the effort. However, while this may make valuation subsequent to purchase difficult, it does not preclude valuation at the time of acquisition. The value, and if not the value then the cost, would be known at that time.
        • Even if it is still decided not enter figures for the livestock holding, some indication of the type and number of animals would allow at least a rough estimate by a reader.
    • 2018 review:
      • Revenue is now $8.13 million, including gifts of $3.17 million, and yet the directors persist with the untenable position that ‘there are no users who are dependent on [its] general purpose financial reports’. So if you are reading this then you are likely one of those people who the directors say don’t exist.
      • Where in the accounts are the properties that are leased?
      • Steer still doesn’t show a true and fair view about the livestock.

What financial situation was shown by that Report?

  • Last year’s surplus of 7% of revenue was increased to 19% this year, largely due to an increase in ‘Gifts’.
    • 2018 review: From 13% last year to 54% this year. There is no explanation given for not distributing more of the revenue.
  • Due to the practice of only seeking at call loans, their working capital is negative (that is, current (short-term) liabilities slightly exceed current (shot-term) assets.)
    • 2018 review: The ratio increased, from 1.1 to 1.9.
  • There is no consequential comment on the going concern assumption.
    • 2018 review: There is no longer a need for such a comment.
  • No obvious concerns about the longer term structure.
  • 2018 review: Other than overseas or Australia, there is no information about where the donations went.

What did the auditor say about the last financial statements?

  • NA. (No audit report.)
  • 2018 review: The auditor, Jeffrey Tulk, for Saward Dawson, gave a ‘clean’ opinion.
    • But this included acceptance of the directors’ decision to produce the financial statements suitable only if users can ring Steer and get a report tailored to their needs.
    • And the acceptance of the deficient information about the livestock.

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

  • Apart from blanks under ‘Phone’ and ‘Website’, yes.
  • 2018 review:
    • There is now a phone number, and a website address is not compulsory.
    • Most of the grants were to overseas organisations, but there are no countries under ‘Where the charity operates’.
    • Most of the directors are missing from the ‘Responsible People’ section.

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

  • They have six programs:
    • You make an interest-free loan to them.
    • Your family or discretionary trusts makes a distribution to them
    • You rent your investment property to them for $1 p.a.
    • You either give or sell your livestock to them. (They pay you to raise it.)
    • You lease your farm land to Steer at a peppercorn rental. It is then share farmed.
    • ‘Bequests’

Who are the people controlling the organisation?

  • The five men shown here include three of the four directors.
    • Although Terence Crook is included in the list on the ACNC Register, he is not a responsible person.
  • 2018 review: The governing document says that Steer is controlled by the Council. The members of the Council are shown here.
    • The relationship between the ‘Directors’ and the ‘Board Investment subcommittee’ shown on the same page is not explained.
    • The ACNC Register incorrectly shows only the three ‘Directors’ as the responsible persons.

To whom are they accountable?

  • As they claim on the website, they are, apart from being accountable to the ACNC, accountable as a Member of Missions Interlink.
    • For one opinion on the strength of this accountability, see the section Activities in this review.
  • 2018 review: They are also, for some things, accountable to ASIC.

 

 

 

  1. In the name ’Steer Inc’. (For an incorporated association this wouldn’t be an issue, but Steer is a company, and therefore ‘Incorporated’ is part of its legal name.
  2. Even though they do not meet the “in Australia” test and do not have deductible gift recipient status.
  3. This section was originally at the end of the review.

 

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