‘CMS Victoria’: charity review

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]). ‘Church Missionary Society (VIC)’ ‘is one such member.

The website linked from the Missions Interlink membership goes to a website in the name ‘CMS VIC’. Here they seek online donations.

Covid-19 – no separate message

Donors

Given what Missions Interlink does, ‘Church Missionary Society (VIC)’ 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 ‘Church Missionary Society (VIC)’, with #5 supplemented by the essentials of the ACNC’s ‘What should I consider when deciding which charity to support?’^[4]

1.  A search on the ACNC Register of charities gives no result in that name; going to just ‘Church Missionary Society’ gives a charity, in a slightly different name, Church Missionary Society Victoria Inc.^[5](CMSV).

Neither of the names it uses on the website, ‘CMS VIC’ or ‘CMS Victoria’, have been registered as a business name.

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

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

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4.  The Australian Business Register (linked from CMSV’s ACNC Register record), says that the charity is not entitled to receive tax deductible gifts. We have seen above, however, that CMSV 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-A).  No explanation is given for this.

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5.   The use of your donations

The Directors’ Report [Financial Report 2019] shows what CMSV is about^[6]:

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.

CMAV’s auditor, Jeffrey Tulk, is a partner in the firm Saward Dawson. This is what his professional body, Chartered Accountants Australia & New Zealand, has to say about the choice between the two types of reports^[7]:

With 15 full-time equivalent employees, 246 volunteers [AIS 2019], $1.53 million in donations from individual and churches throughout Victoria, and missionaries all over the world [Financial Report 2019] it is hard to see how a special purpose report is the right choice. But that is the choice that the directors of CMSV made.

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

One of the implications of their choice is that you can ring CMSV’s office and request that they prepare financial statements that answer the question or questions you have about the charity. I doubt that they will agree^[8]. And if they don’t then the accounts presented by the directors are not for you. In fact, by saying (in the Notes to the Financial Statements) that CMSV is not a ‘reporting entity’, they imply that you don’t exist^[9]:

Other issues with the Financial Report

• The most prominent thing on the cover of the Financial Report is the logo of the auditor, Saward Dawson. As the Report belongs to CMSV, and independence of the auditor from the client must be both actual and perceived, this is inappropriate.
• Investing is as much part of CMSV’s ‘operating activities’ as anything else (and certainly more than rebranding). The revenue and expenses from this activity therefore should be included with the other revenue and expenses.
  • There is no total for revenue.
• The heading on the listing of assets and liabilities (the balance sheet) is completely wrong.
• No explanation is given for holding $4.91 million ‘financial assets’ when revenue is half that.
• The committee members do not say, as they are required to do, why they think that CMSV is not a reporting entity.
• Why are buildings depreciated at the unusually high rate of 14% p.a.? (That’s a life of a little over 7 years.)
• Note 1(n) says that CMSV ‘collects donations on behalf of CMS – Australia’. The website says the opposite.
• The disclosure for $4.50 million of ‘Other financial assets’ (a description that doesn’t match the description in the balance sheet) is limited to ‘Investments managed by Perpetual’.
• There is no explanation of why gifting $1 million and lending $1 million to the ‘St Andrew’s Hall Redevelopment Project’ is consistent the mission of CMSV.

Directors

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

Kirsty Brown

Graeme Chiswell

Peter North

Jane Peters

Andrew Reid

Roslyn Schnerring

Ray Ternes

Pam Thyer

Wei-Han Kuan [Branch Council’s Report]^[10]

The current committee members are shown on the ACNC Register. This shows that Julia Jordan (this one?) has joined since. (The website is, however, long out-of-date.)

The use of your donations

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

Cash spent

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

No further information is given on these figures, so we don’t have enough information to understand where the cash went.

CMSV don’t explain how, if the donations are collected by CMS-A (see above), the donations are available for CMSV to send to CMS-A.

Resources consumed (i.e. accrual)

This, from the Statement of Profit or Loss and Other Comprehensive Income, is how the activities translated into expenses (with last year in the second column)^[11]:

After ‘Employee benefits expenses’, at 41% of expenses, ‘Contribution to CMS – Australia’ is the largest expense. Here’s the Note 4 explanation:

There is no comment on the control, if any, that CMSV has over the amount that it must send to CMS – A.

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 CMSV a draft of this review on 20 April 2020. They chose not to respond.

1. See here for the previous review. ↑
2. https://missionsinterlink.org.au/about/ ↑
3. ↑
4. 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]. ↑
5. If the ASIC register is correct, the name on both the ACNC Register and the ABN register should be Church Missionary Society – Victoria Inc. ↑
6. The usual places one goes on the ACNC Register to find out what a charity does, the charity’s record and its AIS, are no good in this case because they are about CMS-A, not CMSV. ↑
7. Enhancing Not-for-Profit Annual and Financial Reporting, March 2013, accessed from their website March 2020. ↑
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. The directors were meant to say why they thought that their charity was not a reporting entity. ↑
10. The committee members are accountable to the members. The number of members is not disclosed. ↑
11. Suggestion to CMSV: put the list in either alphabetical or size order. ↑