This is a review^[1] in the series ‘Members of Missions Interlink’, Missions Interlink being ‘the Australian network for global mission’^[2] (and a means for a Member to get income tax exemption when it might not otherwise be available^[3]). ‘CMS NSW & ACT’ is one such member^[4].

One the website linked from the Missions Interlink they seek online donations.

Donors

Given what Missions Interlink does, ‘CMS NSW & ACT’ is probably a charity.

The charities’ 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”:

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.
5. Find out more about how the charity says it uses donations.

Here’s the results for ‘CMS NSW & ACT’ #5 supplemented by the essentials of the ACNC’s ‘What should I consider when deciding which charity to support?^[5]’

Question 1

A search on the ACNC Register of charities gives a registered charity, Church Missionary Society NSW & ACT Limited (CMS N&A). This is because CMS N&A has ‘CMS NSW & ACT’ recorded under ‘Also known as’:

Other registrations

These three names should be registered business names. The first two are, but not the third.

It says, in the AIS 2020, that it intends to fundraise, and it has an online invitation to give, but CMS N&A is not registered to fundraise in NSW. Nor in Tasmania or Queensland – other states not checked.

Question 2

There is nothing to suggest that CNS N&A fundraise door-to-door or in the street.

Question 3

The web address begins with a closed padlock symbol, so the website is secure [the ACNC article above]. But there is still nothing about security on the giving page.

Question 4

The Australian Business Register (linked from CMS N&A’s ACNC Register record), says that the charity is not entitled to receive tax deductible gifts. We have seen above, however, that CMS N&A is a ‘legitimate charity’.

This Register information does not match the information on the giving page:

This is because, as you can see from the bottom of this page, you are giving to another charity, Church Missionary Society – Australia Ltd (CMS Australia).  CMS N&A don’t give the reason for this.

Question 5  How are donations used

Context

From the CMS N&A ACNC Register entry:

Sharing the Gospel^[6]

No – see above. (The missionaries are employed/contracted by CMS Australia.)

Financial Reporting

The audited account of how a charity uses donations is the Financial Report on the ACNC Register^[7]. Because CMS N&A controls another charity, Church Missionary Society Trust, the Report is for the consolidated entity.

Directors have a choice between two kinds of reports, special purpose or general purpose. The requirements of the former are less onerous than the latter.

Special purpose statements are only applicable if there no users of the financial statements, either current or prospective, who rely on the other kind. And they rely on the other kind if they can’t ring the CMS N&A office and command them to prepare financial statements tailored to their needs^[8].

The directors of CMS N&A have said they there are no such users:

With accountability to a membership of 695 individuals, professional management, a subsidiary, 132 employees, 300 volunteers, 126 missionaries, government grants, and $9.0 million in donations from 6520 individual donors and 362 church donors, that is a ludicrous decision.

This decision was made with the full knowledge and approval of CMS N&A’s auditor, Peter Vilimaa, is a partner in the firm Manser Tierney & Johnston. And this approval was given despite what his professional body, Chartered Accountants Australia & New Zealand, thought about what was right:^{[9] [6]}:

There is no way that it is reasonable to see a charity of the size, reach, and complexity of CMS N&A as an exception to the rule that there are users who rely on a charity’s financial statements.

Of as much concern as the directors’ ability to make the right decision here, is what it says for how much confidence stakeholders can have in their general decision making.

Other issues with the Financial Report

• A decision to give $1 million to an associate charity was incorrectly recorded as a provision.
• Contrary to their own accounting policy (Note 1), and without explanation, the independently assessed value of the properties was reduced by 10%.
• Profit on disposal of property’ is still incorrectly classified as ‘Other comprehensive income’.
• Buildings are still not depreciated. And still with no explanation.
• The effect of the material change to the revenue recognition policy (Note 3) is not shown.
• Why is CMS Australia not identified as a related party?
• The ‘Mascot’ property was transferred from the books of the subsidiary to CMS N&A without a transaction and without explanation.

The directors’ false declaration

The above decisions mean that the statements do not comply with the Accounting Standards, which, in turn, means that they neither comply with the Act governing charities nor do they show ‘a true and fair view’. Consequently, this declaration the directors made in the Financial Report is false:

Who made this declaration?

Here, from the Directors’ Report [Financial Report 2020] are the directors who approved the Financial Report 2020:

• Alastair Christie
• Christine McComb
• David Clarke
• Gregory Olliffe
• Ian McFarlane
• Kathryn Thompson
• Paul Sampson
• Robert McPaul
• Stephanie Menear
• John Lovell

The CMS N&A website says that Kester Lee and Ravindra Pieris have replaced Christine McComb and Robert McPaul. The ACNC Register matches that.

The directors are responsible to the members. There were 695 of them at 30 June 2020 [Directors’ Report].

The use of your donations

If you are still prepared to consider a donation to CMS N&A, here is how the last lot were used:

Cash spent

From the Statement of Cash Flows (with the group figures in the second pair of columns, and last year in the second column in each case):

This may be legal, but it is of little help in seeing where the cash went.

CMS N&A still don’t explain how, if online donations are collected by CMS Australia (see above), CMS N&A has those donations available to send to CMS Australia.

Resources consumed (i.e., accrual)

This, from the Statement of Profit or Loss and Comprehensive Income, is how the activities translated into expenses (with CMS N&A in the first two columns, the consolidated figures in the last two):

This is the explanation of the major expense, the $5.41 million sent to ‘CMS-A Ltd’ (CMS Australia):

There is still no comment on the control (if any) that CMS N&A have over the ‘contribution commitment’, the amount that must be sent to CMS Australia.

The ‘Employment expenses’ represent an average salary of $41K pa.

Impact

Nothing systematic found.

It is never legitimate to judge a charity solely by its administration costs as a percentage of its total costs. However, in the absence of information on impact…

If we assume that ‘Mission Support’ is the direct cost of creating an impact, then ‘administration’, the remaining costs, is 43% of the total^[10].

Charity response

• CMS N&A still does not seek feedback generally.
• CMS N&A only invites complaints about its ‘safe ministry and professional standards’.
• Accountability is not mentioned on the website.
• However, as a Member of Missions Interlink, it has accepted a set of standards, the introduction to which includes this statement:

We would therefore expect a response to a draft of this review^[11]. However, like last year, they did not respond.

1. See here for the previous review. ↑
2. https://missionsinterlink.org.au/about/ ↑
3. ↑
4. ↑
5. 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? [A section in the article, Donating and Volunteering]. ↑
6. ‘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]. ↑
7. CMS N& A was 1½ months late in lodging its AIS 2020 – and this was after the ACNC allowed an extra month on top of the already generous six months after year end that they normally allow. ↑
8. The accounting profession says that you are therefore ‘potentially interested in the information provided in general purpose financial reports’. [From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au] ↑
9. Enhancing Not-for-Profit Annual and Financial Reporting, March 2013, accessed from their website March 2020. ↑
10. The directors say, in the Directors’ Report [Financial Report 2020], that 52% of the revenue was sent to CMS Australia for ‘missionary support’, leaving 48% as ‘administration’. ↑
11. I agree with Randy Alcorn when he says that ‘Any Christian leaders who resist financial accountability make themselves suspect.’ [Money, Possessions, & Eternity, Tyndale, 2003, 425]. ↑