Archived: Christian Ministry Advancement Ltd: charity review

This is a charity review of Christian Ministry Advancement Ltd (CMA), an organisation that seeks donations online. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

CMA is also the organisation that is, via the CMA Standards Council, giving a seal of approval to Christian organisations who meet^[1] “a set of standards of good governance, financial oversight, and fundraising ethics.”^[2]

For the previous review, see here.

Is it responsive to feedback?

• CMA provides a forum for Christian leaders to receive feedback, but there’s no invitation to submit feedback on itself.
• Principle 8.7 of the CMA Standards Council’s ‘Nine Principles of Ministry Accountability’, compulsory for its ‘accredited partners’, says that

• • But CMA doesn’t appear to have such a mechanism itself.
• CMA has much on its website about accountability for Christian leaders and ‘Christian’ organisations, but nothing about its own accountability.
• I sent them a draft of this review. Like last year, they…did not respond.

Is it registered?

• Yes, as a charity.
• CMA holds the following business names:

• But the one that it uses most, ‘CMA’ is not registered. (And ASIC says that it is not available.)
• CMA is a member of the EA Foundation ‘family’, an affiliate.
  • The EA Foundation was originally the Evangelical Alliance; Australian Evangelical Alliance Inc is a separate charity trading as Missions Interlink (which is also one of the EA Foundation’s affiliates).
• CMA is a public company, a company limited by guarantee.
  • It appears to have the provisions in its constitution to enable it to omit ‘Ltd/Limited’ at the end of its name.
• The ACNC Register says that CMS operates throughout Australia, ‘Grants and donations’ is easily its largest source of revenue, and it seeks donations via its website. It doesn’t explain why it has no fundraising licences.

What does CMA do?

• See here.

Do they share the Gospel^{[3] [2]}

No. It’s not part of their mission.

What impact are they having?

• Nothing systematic found.

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

• The expenses are not classified to allow this calculation.

Do they pay their directors?

• This is not permitted by the constitution.
• There is insufficient disclosure to say.

Can you get a tax deduction?

• No

Is their online giving secure?

• Yes

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

• None

Where were your (net) donations sent?

• The AIS 2017 reports that CMS did not make any grants or give any donations.

Is their reporting up-to-date?

• Yes (six months after their year-end, on the last day they were due, and 10 days later than last year).

Does their reporting comply with the regulator’s requirements?

• Annual Information Statement 2017 (AIS 2017): N0
  • ‘Revenue from providing goods or services’ is incorrect.
  • Outcomes’ are not reported.
  • One business name and ‘CMA’ are still missing
• Financial Report 2017: No
  • The directors say that ‘there are no users dependent on general purpose financial statements’, implying that any of CMA’s stakeholders, both present and prospective, who require financial information to make a decision, are able to command the preparation of statements tailored to their needs. With a professional management, operations in all states, hundreds of subscribers, others who attend events who are not subscribers, a public invitation to donate, and a high-profile initiative to give a seal of approval to Christian organisations that meet a set of standards, this is implausible^[4].
  • With a significant deficit for the year, negative working capital and the value of software ($26K) now being greater than the remaining equity ($22K), one would expect a comment on threat to the going concern assumption.

What financial situation was shown in that Report?

• The surplus as a percentage of revenue declined from 4% to negative 10%.
  • The increase in revenue (5%) was not enough to compensate for the increase in ‘Employee benefits expense, 15%, and the loss made on ‘Events’.
• There are no non-current liabilities, so how did the ‘’Finance costs’ arise?
  • And where are they in the Statement of Cash Flows?
• Working capital (current assets less current liabilities) has dropped sufficiently this year that it is now negative.
• There are no long-term liabilities. Even so, equity is now only $22K.

What did the auditor say about the last financial statements?

• The auditor, Peter Shields, for Saward Dawson^[5] Chartered Accountants, issued a ‘clean’ opinion^[6].
  • To do this he had to agree with the directors that there are no users, past or prospective, who are dependent on the type of accounts that are produced when users are not able to command the preparation of statements tailored to their needs.
  • He made no comment on the directors’ silence on the going concern assumption.

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

• Not quite – two names for the organisation are missing.

Who are the people controlling the organisation?

• From the website:

• Which does not match the ‘Responsible Persons’ on the ACNC Register:
  • Jame Lewis
  • Karen Naylor
    • Is it this Karen Naylor?
  • Cheryl Osment
  • Robert Rawson
  • Stephen Slade
  • John Peberdy
    • There are 11 directorships (down from 14 last year) recorded for the name ‘John Peberdy’. And the register only covers charities, not all not-for-profits, and no for-profit organisations. Therefore, if after eliminating the charities for which John is not a director, you are left with his total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.
  • The directors are accountable to the members. But there are only five members, and as it is likely that some or all of the directors are members, there’s no accountability there.

To whom is CMA accountable?

• To the ACNC as a charity, and still for some things, to ASIC as a company.

1. Although it is not, as it says here, in pilot mode any longer. ↑
2. Here are the first nine organisations accredited. See www.tedsherwood.com for a review of all bar the last one. ↑
3. “Good living and social concern are important [to the cause of evangelism], but they are not uniquely Christian graces…I’ve met a lot of fine Hindus, Muslims and atheists. Just living the life is not going to bring someone to Christ. There is much more to it than that. We must help people, certainly, but we must also share with them why we are motivated to do so. We must stand against injustice, poverty and need, but we must at the same time point to the One who brings justice and who can meet the deepest need. Until they know our reasons, how can they come to know our Lord?” [Dan Armstrong, the Fifth Gospel: The Gospel According to You, Anzea Books, pp. 13-14. ↑
4. Remembering that this is an organisation that has a department that is setting the standards for the accountability and transparency of Christian charities,
   • The figures for ‘Trade and other payables’ and ‘Other liabilities’, without explanation, do not match the figures for those items reported last year.
   • Comprehensive income is not shown in the Statement of Changes in Equity.
   • The expenses are a mixed classification.
   • Two lines plus interest is not a helpful disclosure of ‘Cash flows from operating activities’.
   • The description ‘Plant and equipment’ is not helpful as a description of ‘Property, plant and equipment’.
   • 7% of expenses in ‘Other expenses’ is perhaps too large to be unexplained.
   • The audit fee is still undisclosed.

   ↑

5. Although far from an uncommon practice, I have always wondered about the appropriateness of featuring the logo of the auditor on the cover of a report that belongs to the charity. ↑
6. To take the right amount of comfort from a ‘clean opinion’, please read here and here. ↑