Church of Christ Fellowship Clayton Inc: charity review

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

The website linked from the Missions Interlink membership goes to a website in the name ‘Clayton Church of Christ’. Here they offer Tithe.ly online giving.

Covid-19

Donors

Given what Missions Interlink does, ‘Clayton Church of Christ Fellowship’ 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 ‘Clayton Church of Christ Fellowship’, with #5 supplemented by the essentials of the ACNC’s ‘What should I consider when deciding which charity to support?’^[3]

1.  A search on the ACNC Register of charities gives this result: Church of Christ Fellowship Clayton Inc. (ClaytonCoC), which has all the words but with the addition of ‘Inc’ to show that it is an incorporated association.

The name that it is using, ‘Clayton Church of Christ’ is not registered. Until they do that, they should be using the name that is on the Register, Church of Christ Fellowship Clayton Inc. Note the ‘Inc’ on the end; the church’s enabling legislation^[4] requires that to be on public documents and official documents.

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2.  There is nothing to suggest that ClaytonCoC fundraise door-to-door or in the street.

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3.  The web address doesn’t begin with a closed padlock symbol, so the website is not secure [the ACNC article above]. With Tithe.ly I could add a credit card without any mention of security.

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4.  The Australian Business Register (linked from ClaytonCoC’s ACNC Register record), says that the charity is not entitled to receive tax deductible gifts. This is confirmed on the website. We have seen above, however, that the church is a ‘legitimate charity’.

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5.  The use of your donations

As context, here, from the ACNC Register, is what they do:

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

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.

ClaytonCoC’s auditor, Matthew Hung, CA, is a Director in the firm rdl.accountants. This is what his professional body, Chartered Accountants Australia & New Zealand, has to say about the choice between the two types of reports^[5]:

With 13.3 full-time equivalent employees, 150 volunteers [AIS 2919], at least $1.69 million in donations [Financial Report] it is hard to see how a special purpose report is the right choice. But that is the choice that the directors of ClaytonCoC made.

And the auditor, a Chartered Accountant, agreed with them.

One of the implications of their choice is that you can ring ClaytonCoC’s office and request that they prepare financial statements that answer the question or questions you have about the charity. I strongly doubt that they will agree^[6]. And if they don’t then the accounts presented by the directors are not for you. In fact, they say (in the Notes to and Forming Part of the Financial Report) that you don’t exist:

The use of your donations

If you are still prepared to consider a donation to ClaytonCoC, here is how the donations were used:

Cash spent

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

It’s one line more than most charities have, but still not enough disclosure to be very helpful.

Resources consumed (i.e. accrual)

This, from the Statement of Comprehensive Income, is how the activities translated into expenses:

‘Mission related expenses’ are 12% of expenses, ‘Employee Benefits Expense’ 53%.

Other issues with ClaytonCoC’s information

1. The Report is preceded by a copy of the 2019 AGM agenda and the Minutes of the 2018 (not 2019) AGM (a mistake?)^[7].
2. The ‘Registration status history’ on the ACNC Register says that the church is ‘no longer operating’ from 22 November 2019^[8].
3. There is confusing information about the existence and type of one or more building funds.
   • The introduction to the Notes To and Forming Part of the Financial Report says that ClaytonCoC controls another legal entity, a ‘Building Fund’, an entity that can give a tax deduction:

• • This Fund is not identified in the Financial Report, and the only reference to a ‘Building Fund’ on the website is on a page that says no tax deduction is available.
  • Later in the Notes the Fund is identified as a ‘School Building Fund’:

• • A search on the charities’ Register uncovered a charity that’s fits the description, The Trustee for the Church of Christ Fellowship Clayton School Building Fund. ClaytonCoC revoked this registration as planned, on 22 November 2019. (This shows the likely reason for the mistake in #2 above.)

4.  The governing document shows that, as usual for this kind of entity, it would be illegal to transfer the balance of the funds as proposed, that is, to the church [paragraph 17].

Committee members

Here are the committee members who approved the Financial Report 2019:

Tim Wong

Henry Kong

Terence Mak

Colin Kwong

Chee Seng Fah [Report by the Church Board, Financial Report 2019]^[9]

Both the website and the ACNC Register show that the same people are still on the board.

Impact

Nothing systematic found.

Charity response

Both Members and Associates have to accept a set of standards, the introduction to which includes this statement:

We sent ClaytonCoC a draft of this review. They…did not respond.

1. https://missionsinterlink.org.au/about/ ↑
2. ↑
3. 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]. ↑

4. ASSOCIATIONS INCORPORATION REFORM ACT 2012 – SECT 23

   Name must appear on business documents etc.

   (1)     An incorporated association must ensure that its name appears in legible characters—

   (a)     on its common seal (if any); and

   (b)     in all its notices, advertisements and other official publications; and

   (c)     in all its business documents. ↑

5. Enhancing Not-for-Profit Annual and Financial Reporting, March 2013, accessed from their website March 2020. ↑
6. 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]. ↑
7. The entire document has also been lodged on the Register as an ‘Annual Report as well as the Financial Report. ↑
8. ↑
9. The directors are accountable to the members. There were at least 93 members at the time of the 2018 AGM [Financial Report 2019]. ↑