Caritas Australia: charity review

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. ‘Caritas Australia’ is one such Member.

COVID-19

Donors

The website linked from the ACFID membership list seeks donations from the public.

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”:

1. Check the charity’s name.
2. Ask for identification from anyone seeking a donation.
3. Be careful of online requests for donations.
4. No tax deduction doesn’t mean the charity is not a legitimate one, and
5. Find out more about how the charity says it uses donations.

Here’s the results for ‘Caritas Australia’, with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?^[1]

 1.  There’s a charity registered in the name ‘Caritas Australia’ (Caritas).

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2.  There is no indication on the website that Caritas seeks donations door-to-door or in public places.

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3.  The web address begins with a closed padlock symbol, so the website is secure [the ACNC article above].

Next to where you put your credit card information there are various logos (without links) that attest that the processing of your information is secure.

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4.  Caritas’s ABN record says that, as a public benevolent institution (PBI), it is entitled to receive tax-deductible gifts. It also has a fund, Caritas Australia Overseas Aid Fund, gits to which ‘may be deductible’.

There is no mention of the Fund on the website.

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5.  The use of your donations

For context, here is what Caritas does.

The audited account of how a charity uses its donations is its Financial Report on the ACNC Register.

Comments on that Report

• The auditor had to give a qualified opinion (rather than a ‘clean’ one):

• What he is effectively saying is that the directors had been unable or unwilling to implement the necessary controls over ‘voluntary collections and donations’. This means that we can’t be sure that all the proceeds from this fundraising made it into the Caritas bank account.
• What exactly is this fundraising? The closest item in the Statement of Income and Expenditure (sic) is ‘Donations and gifts’:

• If it is this $20.11 million, then the auditor, John Gavljak, a partner in the firm Pitcher Partners, has a qualification on 49% of Caritas’s revenue. That’s a significant limitation on the usefulness of the Report.
• The directors do not think it necessary to comment on the audit qualification. Why were they willing to accept it when most other charities collecting cash do not have a qualification?

If you are still happy to consider a donation to Caritas, here’s how it used the donations it received:

Cash spent

From the Statement of Cash Flows (with last year in the second column):

No further information is given on the first figure. So, we don’t have enough information to understand where the cash went.

Cash unspent

Past donations have contributed to Caritas being able to hold $45.50 million in cash, cash equivalents and long-term managed investments. That’s equivalent to 13+ months of revenue.

Resources consumed (i.e. accrual)

This, from the Statement of Income and Expenditure for the Year Ended 30 June 2019, is how the activities translated into expenses:

None of these items is explained.

The destination of the money for programs is not given.

So, again we don’t have enough information to understand what happened to the donations received^[2].

Also, there is nothing in the Financial Report 2019 on how Caritas ensures that (a) the money reaches the overseas organisation, and (b) it is used for the purposes given.

Directors

The National Council of Caritas was responsible for this Financial Report. The constitution provides that the Council will be comprised of ‘…the Bishop(s) appointed by the BCJED and up to 10 additional Members’ [paragraph 5.4.(a)]. The website says that there are only three members. Is this correct?

Vincent Long Van Nguyen

Robert Fitzgerald

John Watkins

There are even fewer shown on the ACNC Register – just one. There is little doubt that this is incorrect.

Impact

Nothing systematic found on Caritas’s impact.

Charity response

Caritas encourages feedback. I sent a draft of this review to them on 23 March 2020. At the time of publication, over four weeks later, they had not responded].

1. 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?

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2. The need is supported by paragraphs 85 and 112 of the Accounting Standard Presentation of Financial Statements [www.aasb.gov.au]. ↑