This is a review in the series ‘Australian Council for International Development (ACFID) Members.’ ACFID ‘is the peak body for Australian non-government organisations (NGOs) involved in international development and humanitarian action.’ It requires Members to adhere to a Code of Conduct.
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, and
- Find out more about how the charity says it uses donations.
Act for Peace is part of an ACNC reporting group, NCCA_ACNC Group. This is because Act for Peace is ‘The international humanitarian agency of the National Council of Churches in Australia’ [link added by us].
The other member of the group is NCCA Aboriginal and Torres Strait Islander Development Fund.
Act for Peace’s Marketing, Communications and Fundraising Policy allows for the possibility of the outsourcing of fundraising to third parties.
The giving pages that your information is secured by Stripe.
Act for Peace’s ABN record, via the ACNC Register, says that it is entitled to receive tax-deductible gifts.
Tax-deductibility is not mentioned until the second page of the giving process.
Question 5 The use of your donations
The account of how a charity uses donations is the Financial Report on the ACNC Register.
Because Act for Peace is a member of an ACNC Group (see above), it should not submit a Financial Report:
For some unexplained reason though, Act for Peace submits what it doesn’t have to, and the parent, NCCA, doesn’t submit what it’s meant to.
But this gives us a Financial Report 2021 for Act for Peace to look at.
The audited account of how donations are used is the Financial Report.
Included in this Report is a Directors’ Declaration. In this, they declared that the ‘financial statements and notes’
However, there are enough issues with the statements to suggest that this declaration is false:
Statement of Profit and Loss and Other Comprehensive Income
- Employee benefits expense is not shown.
- Nor is depreciation and amortisation expense.
- $2.51 million to ‘Asia’ etc (Note 11) is an insufficient explanation of this $5.69 million of donor/government money. To whom was it sent and for what reason? How do we know that they were (a) received and (b) spent on the purposes for which they were given? [AASB 101.85 and 112].
- The allocation of expenses between projects and ‘overhead’ is not explained.
- Interest revenue is not shown.
- ‘Other income’ is insufficient disclosure for something that is 12% of the total.
Statement of Financial Position
- ‘Property, Plant and Equipment’ are not divided into classes.
- Buildings are not depreciated.
- There is no Asset Revaluation Reserve.
- ‘Trade receivables’ have increased from $179K to $1.69 million, yet there is no explanation, plus no comment on the lack of a provision for doubtful debts.
- ‘Other Financial Assets’ should be ‘Financial Assets;’ these investments, $8.46 million, are not classified.
- What is ‘Institutional Income in Advance’ ($1.54 million)?
Statement of Changes in Equity
- This does not comply with the Accounting Standards.
Notes to the Financial Statements
- Note 1: No depreciation rates; depreciation on buildings not mentioned; no leases held.
- Note 15: The relationship with ‘NCCA’ is not described.
- Note 16: The difference between $3.51 million for the cost of fundraising, and the $2.02 million figure in the income statement is not explained.
In addition, the Directors’ Declaration is not compliant with the ACNC Act.
The people responsible for the Report
The directors are accountable to the members. The company was established with only one member, NCCA (see above). It is likely that no further members have been added.
The use of your donations
If you are still willing to consider donating to Act for Peace, here, from the Statement of Profit and Loss and Other Comprehensive Income, is how the activities translated into expenses (with last year’s figures in the second column):
This is the only information about the destination of the money sent overseas (from the Notes to and forming part of the accounts…):
There is nothing in the Financial Report 2021 on how Act for Peace ensures that (a) the money reaches the overseas organisation, and (b) it is used for the purposes given.
Commitment 8.3 of the ACFID Code of Conduct requires QSA to include in its annual report ‘A description of the most significant aid and development activities undertaken during the reporting period and their impact’. The ACFID gives this example:
“We drilled 20 wells which improved the lives of 1000 people in the region by providing access to clean drinking water. In turn, this lowered the incidence of water borne diseases by 50% and reduced the infant mortality rate by 75%.”
This matches the description of impact in the link in the heading above.
Act for Peace has a different interpretation of ‘impact’ in its annual report (page 4):
The same Code of Conduct Commitment requires ALWS to include ‘information about evaluations’ in its annual report.
Each of these has a section on ‘impact.’
Act for Peace says that ‘We are open, transparent and want to hear from you. We strive to fulfil our vision with passion and to the highest possible standards of excellence and integrity. But we know we don’t always get everything right first time. Your feedback helps us to improve.’
We sent a draft of this review to them. They….did not respond.
- See our previous review here. ↑
- 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?
- Act for Peace Ltd has the provisions in its constitution necessary to allow it to drop ‘Ltd’/’Limited’ from the end of its name. ↑
- The ACNC implies, therefore, that it is a ‘legitimate’ charity. But this is not correct – as the ACNC itself points out, registration is voluntary. ↑
- QSA, after strongly disagreeing with us at the last review that there was anything they could do to avoid a qualified audit opinion for a lack of controls over ‘more remote fundraising activities,’ the problem has been resolved. Maybe due to change in auditor? ↑