Archived: Baptist Union of Victoria: mini-charity review

Mini-review of Baptist Union of Victoria (BUV) as an organisation that seeks donations online for their Grow-Give-Go campaign. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

BUV is also an organisation that is connected, by the cross-directorship of Jame Lewis, to Christian Ministry Advancement Ltd, the organization that is responsible for the CMA Standards Council’s ‘major new initiative, accrediting Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’

Is it responsive to feedback?

• When sent a draft of this review, on 15 June 2017, they…did not respond.

Is BUV registered?

• As a charity, yes.
• BUV controls, by its power to appoint the majority of their directors [Financial Report 2016, page 11], the following [page 18] registered charities:
  • Baptcare Ltd
  • Whitley College – The Baptist College of Victoria
  • Carey Baptist Grammar School Ltd
  • Strathcona Baptist Girls Grammar School Limited.
  • Kilvington Grammar School Limited.
  • Baptist Camping Victoria Incorporated.
  • Despite this control, BUV have chosen not to consolidate the accounts of these charities, saying that this ‘would not be of practical value to users of these special purpose financial statements.’ It is therefore arguable that BUV’s statements do not comply with the ACNC legislation, in that they do not ‘give a true and fair view of the financial position and performance of the registered entity’ [Sec 60-10 (3)(a) of the ACNC regulations].
• BUV has recorded in the Australian Business Register that it is an ‘Other Incorporated Entity’. But you’ll not find it where you normally find incorporated entities, the register kept by ASIC. It is instead a special case, a body with its own Act of Parliament, the Baptist Union Incorporation Act 1930[1].
• BUV operates (per the ACNC Register) in Victoria only. It asks for donations on the internet. It has no fundraising licences^[2].

What do they do?

• See here.

Do they share the Gospel?

• No. (Not their mission.)

What impact are they having?

• Despite promoting a book with the subtitle The Six Practices of High-Impact Nonprofits, there is no indication that BUV are even assessing their impact.

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

• From the classification of expenses used by BUV there is no clear way to even estimate this percentage.

Can you get a tax deduction?

• Only if you give to its Fund, the Refugee Airfare Loan Scheme.

Is their online giving secure?

• Grow-Give-Go: If it is, it’s not mentioned until after you have entered your information on the first page.
• Refugee Airfare Loan Scheme: donations are invited but no facility provided.

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

• None

Is their reporting up-to-date?

• Yes (five months after their year-end).

Does their reporting comply with the regulator’s requirements?

• AIS 2016: No
  • No outcomes are reported.
    • And ‘Empowered the leaders of Victorian Baptist Churches for mission.’ is not very helpful as a description of 2016’s activities.
  • Two business names are missing.
  • No explanation is given for the omission of ‘Other comprehensive income’.
• Financial Report 2016: No
  • The directors give no explanation for their decision that ‘the Union is not a reporting entity’, that is, they have no users dependent on general purpose financial statements to make their decisions about BUV.
  • The decision allows them to produce the lower standard special purpose financial statements. This is only the correct decision if any of BUV’s users, either present or prospective, can request BUV to tailor a financial report to their needs. With a paid staff of 36, ‘constituents’ collectively paying $1.00 m for membership, and control of six significant charities, this is not plausible.
  • The Councillors’ Report (in the Financial Report 2016) says that ‘Insurance reserves totalling $539,321 were written back and taken up as revenue in 2016’. To do so is contrary to basic accounting, there is no ‘insurance reserve’ shown in the accounts, and there is no such movement in reserves.
  • The division of equity between ‘Unrestricted Fund’ and ‘Reserves’ implies that the amounts in the latter are restricted. However, well over half of the total are ‘restricted’ only by ‘internal rules and charters’, that is, are free to be used by BUV at their discretion.
  • The ‘Related Parties’ Note does not mention either Global Interaction (page two of the Financial Report) or Now and Not Yet Inc (also page two).
  • ‘Other’ under Revenue is 16% of the total. A bit large to be unexplained.
  • $431 K was paid in interest yet there are no loans.
  • Why is the increase in trust funds included as a financial activity in the Statement of Cash Flows?
  • The classification of the $38.95 m of investments does not follow that required in the Accounting Standards.

What financial situation was shown in that Report?

• Remembering that the Report, due to the omission of controlled agencies, falls far short of showing the true position of BUV…
  • A negative return on revenue (-5%) was reversed (3%).
  • ‘Remuneration’ – presumably ‘employee benefits expense’ – declined from 56% of expenses to 49%.
  • Working capital (current assets less current liabilities) remained slightly positive at 120%.
  • Long-term liabilities are minimal compared to long-term assets.

What did the auditor say about the last financial statements?

• He gave a ‘clean’ opinion.
  • But he agrees with the directors’ decisions not to consolidate and to produce that the lower standard special purpose financial statements are appropriate (see ‘Does their reporting..’, above).

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

• Almost. It is missing information under ‘Other Name(s)’.
• ‘Phone’ and ‘Website’ are blank, but neither are compulsory.

Who are the people controlling the organisation?

• There is an organisation chart on the website, and a page on governance, but neither include the members of the board (Council).
• Per the ACNC Register (‘Responsible persons’), it is currently these people who control BUV:
  • Jo-anne Bradshaw
  • Mark Browning
  • Daniel Bullock
  • Allan Demond
  • Fiona Hall
  • Darryl Kilker
  • Michael Turnbull
  • Debbie Uy
  • Jame Lewis
    • Jame is a director of Christian Management Advancement Ltd, an organisation that believes that
      • Christian organisations should be the standard-setters in terms of impeccable corporate behaviour.
        • The mission of their committee, the CMA Standards Council, is to ‘help build faith and trust in Christian organisations’, including by allowing organisations who are compliant with a set of standards, formed by the Council, to display the Council’s seal of approval.
  • There are eight directorships recorded for the name ‘Allan Demond’. And the register only covers charities, not all not-for-profits, and no for-profit organisations. Therefore, if after eliminating the charities for which Allan is not a director, you are left with the total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.

To whom is BUV accountable?

• To the ACNC.

1. A Financial Report normally identifies the organisation’s enabling legislation; the directors do not mention it in the 2016 Report. ↑
2. 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. ↑