Care: At least some of the information about this charity is no longer current. Use the ‘Search charity names’ box to see if there is a later review. If the latest review has a message like this, you are welcome to make your case for an updated review via email to email@example.com.
This is 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. ‘Bright Futures Child Aid and Development Fund Australia Limited’ is one such Member.
The charity regulator, 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”:
Here’s the results for ‘Bright Futures Child Aid and Development Fund (Australia)’, with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?
1. A search on the ACNC Register for ‘Bright Futures Child Aid and Development Fund Australia Limited’ gives a charity in the same name (Bright Futures).
2. There is nothing in Bright Futures’ material to suggest that they use either door-to-door or street collectors.
Bright Futures’ comment: ‘Correct.’
3. The Bright Futures website is secure.
There is no assurance of the security of your information on the ‘Donate’ page.
Bright Futures’ comment: ‘Refer privacy statement which is on the Policy page and has been added to home page. ‘
4. Bright Futures’ ABN record (via the ACNC Register) says that a tax deduction is available for a donation to an unnamed fund that it runs.
There is no mention on the Bright Futures’ website of a fund separate to the organisation itself.
Bright Futures’ comment: ‘Bright Futures Australia – Overseas Aid Fund is approved under the Overseas Aid Gift Deduction Scheme and established under clause 21 of the BF Constitution. It is not a separate entity to Bright Futures Child Aid and Development Fund Australia Limited but a separate account within the organisation for the receipt of gifts under this ATO approved scheme. (Refer correspondence from ATO attached) [not included in the review].
Reviewer’s response: The Fund is approved, the organisation not.
5. The use of your donations
For the context, see ‘Our Work’ in the main menu.
Bright Futures’ comment: ‘We do not fund evangelism as this is a prohibited use for tax deductible funds under the Overseas Aid Gift deduction scheme. However those with whom we partner, who in response to love of God as revealed in Jesus Christ are active sharers of the gospel in the context of the worlds in which they work.’
No general statement, but referenced here.
The audited account of how a charity uses donations is the Financial Report on the ACNC Register.
Bright Futures’ Financial Report 2019
Bright Futures’ comment: ‘The paraphrase of the actual note leads to an impression that we are indifferent to this issue. That is not the case. The qualification is a common one for organisations that receive donations generated from collection boxes, fetes, events, dinners, sausage sizzles, offerings etc where the funds come via third parties before they are received into the organisation hands.’
. Reviewer’s response: Here is what the auditor’s report says:
This implies a deliberate decision, not indifference.
.Hundreds of reviews show that the qualification is not ‘common’. It can be avoided.
Bright Futures’ comment: ‘If the comment relates to the beginning of Note 1 in the financial statements that states that the directors have determined that the company is non-reporting. A reporting entity is defined in AASB 1057 as: An entity in respect of which it is reasonable to expect the existence of users who rely on the entity’s general purpose financial statements for information that will be useful to them for making and evaluating decisions about the allocation of resources. Users may be reliant on a regulator to provide them financial information to assess Bright Futures as suggested but it is unlikely that those users would expect to rely on a general purpose financial report. This would create unnecessary red tape.’
Reviewer’s response: As can be seen from the definition quoted, neither “unnecessary red tape” nor whether users expect to rely on a general purpose report are part of the criterion for deciding whether or not an entity is a reporting entity.
Bright Futures’ comment: ‘Accounts are audited by a significant Audit firm (BDO) to meet the standards required by ACNC (refer note in Audit report). We assume reference here to the Accounting standard requirement that a financial report contains an income statement that also includes other comprehensive income. Bright Futures has no other Comprehensive income hence not considered material. On the statement of changes in equity it shows that there is no other comprehensive income.’
.Reviewer’s response: AASB 101 does not allow the omission of a comprehensive income section (or Statement) on the grounds of materiality.
Bright Futures’ comment: BDO is a major audit firm and its audit reports meet the standards required by the ACNC.
.In 2016 there where changes to AASB 101 which allowed preparers to “declutter” the financial statements. The changes clarified that notes only need to be included if they are material, even if black letter requirements and that only significant accounting policies are required (i.e a laundry list (summary) is no longer required).
Bright Futures also prepares special purpose financial statements in accordance with the ACNC requirements.
On this basis the financial statements will not/and do not need to include all the notes that much larger organisations include. https://www.bdo.com.au/en-au/accounting-news/accounting-news-november-2016/time-running-out-to-declutter
Reviewer’s response: ‘Decluttering’ does not overrule the requirement to comply with paragraph 112 of AASB 101, including the requirement to ‘provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them’’. (A list was provided to Bright Futures.)
Bright Futures’ comment: ‘The reporting categories align with ACFID reporting ‘Program Funding’ is funding provided to overseas partners for agreed program purposes.
Those activities are outlined in the Annual Report.
The income statement currently disaggregates expenditure by nature to a much greater extent than the Accounting Standards require. Beyond showing expense categories by nature, the Accounting standard does not require an explanation per category.
(The Annual Report identifies areas of program activity)’.
Reviewer’s response: ACFID requirements do not overrule the Accounting Standards. See the footnote.
The format is not that specified by the ACFID. If that was followed, then we would know whether the destination of the funds was here or overseas.
Information in an annual report cannot substitute for information that should be in the financial statements.
These were the people responsible for the Financial Report:
Donald Van Cooten
The same eight names are also shown as the current directors on the ACNC Register. However, a ninth is included there, the Executive Officer, Paul Madden. Probably incorrectly.
Bright Futures’ comment: ‘Paul Madden’s name appears here on the basis that he is a Responsible Person as Secretary and Public Officer and in relation to the fund established under S21 of the Constitution (refer attached and above.)’
Reviewer’s response: ACNC material clearly shows that none of these roles make a person a ‘Responsible Person’.
The directors are responsible to the members. The common disclosure of the number of members is not disclosed, so it is not possible to assess this accountability.
Bright Futures welcomes feedback:
The Bright Futures’ comments that are included above were made prior to seeing our response to those comments, but they decide to stay with them for publication.
- ◦ 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?
‘When Helping Hurts by Brian Fikkert and Steve Corbett says this about sharing the Gospel: ‘A host of contextual issues determine the best manner and the appropriate time to present the gospel verbally, particularly in militant Muslim or Hindu settings. But without such a presentation, it is not possible for people to be personally transformed in all their relationships, which is what poverty alleviation is all about’ [Kindle Locations 1262-1264, Moody Publishers]. ↑
Given this statement in the Annual Review [ACNC Register], is it likely that the board, rather than exercising an independent mind on this question (and the reporting format question), just followed what the auditor suggested:
We referred Bright Futures to the profession’s ‘Guidance Statement GS 019 Auditing Fundraising
Revenue of Not-for-Profit Entities’ (www.auasb.gov.au). ↑
Why didn’t the materiality argument apply also to the Statement of Changes in Equity? . ↑
This is contrary to paragraph 112 of Australian Accounting Standard AASB 101. This paragraph requires the Notes to ‘provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them.’ ↑
Shown in the information linked under ‘Annual Report’ on the ACNC Register. ↑