Archived: Crossview Australia Limited: mini-charity review

Mini charity review of Crossview Australia Limited (Crossview) an organisation that seeks donations online, and is exempt from Australian income tax via its membership of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

For the previous review, see here.

Is it responsive to feedback?

• I sent them a draft of this review on 21 August 2017. They…did not respond.

Is Crossview registered?

• As a charity, yes.
  • Crossview changed its name from The New Tribes Mission (Australia) Ltd on 13 May 2011.
    • Ethnos360 is the (more recent) new name for New Tribes Mission in the US (and many other countries).
      • Crossover is not one (no longer?) one of those countries.
      • Ethnos360 is a Crossover partner, but is not mentioned on the Ethnos360 website.
• Other registrations:
  • As a public company (a company limited by guarantee).
    • Crossview has the necessary provisions in its constitution to allow it to omit ‘Limited/Ltd’ at the end of its name.
  • The name they have been trading under since inception, Crossview, has now been registered (on 31 January 2017).
  • Crossview operates, per the ACNC Register, in the ACT, NSW, and WA.
    • It doesn’t require a licence to fundraise in the ACT, but does not hold a licence in the other two.
      • The law in this area is not straightforward – is an internet invitation ‘fundraising’ for instance? – and advice varies, so check with the charity before drawing any conclusions.

What do they do?

• ‘Training’, ‘Sending + Support’, ‘Resourcing’, and ‘Advocacy’. For details, see ‘What We Do’.
• What they do is expressed elsewhere on the website as ministries.
• What they said they did in 2016 (Annual Information Statement (AIS) 2016):
  • Trained people to sensitively operate in cross-cultural and multi-cultural environments, whether here in Australia or living overseas’.

Do they share the Gospel ^[1]?

• No, not part of what they are about.
• Their ‘principal object’ in the constitution is
  • the advancement of the Christian faith by resourcing Christians and Christian Organisations (sic) to relate cross-culturally in accordance with the Statement of Faith and Core and Ministry Values.

What impact are they having?

• Nothing 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 allowed by their constitution.
• There is no line item ‘directors’ fees’ (or similar) in the expenses.

Can you get a tax deduction?

• No

Is their online giving secure?

• The first page says, ‘Make a secure transaction’ (sic), but offers no support for that statement.

Where were your (net) donations sent?

• As you can see from the ‘What do they do?’ section above, donating money is not normally a big part of Crossview’s work. However, this year, in addition to the $49K (6% of expenses) with an unspecified destination, they returned $300K to a donor:
  • At a meeting on 21 January 2015, the entity’s board of directors approved the payment of $300,000 to the family of a formal donor (sic) who had previously donated a property to the entity. The directors felt it was appropriate to return the monetary value of the original donation as the use of the original house had concluded.
    • The house is still held, or was it sold?
    • Is this donor related to Crossview in any way?
    • Why was the $300K not included as a liability last year?

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

• ‘Give to an individual or family’
  • The next page says, ‘No Results Found’
• ‘Give to a specific project or cause’
  • ‘General Fund’
  • ‘Connect Training Fund’

Is their reporting up-to-date?

• Yes (seven months after year end, two days before the (extended) deadline).

Does their reporting comply with the regulator’s requirements?

• AIS 2016: No
  • ‘Type of financial statement’ is incorrect.
  • Most of the figures under ‘Expenses’ do not agree with those in the Statement of Profit or Loss and Other Comprehensive Income.
  • No outcomes are reported.
• Financial Report 2016: No
  • Like last year
    • No depreciation is provided on the buildings in the $10.48 m property portfolio. Assets and surplus are therefore overstated.
    • Two of the ‘Changes of assets and liabilities’ in Note 11 do not match the change in the Statement of Financial Position.
    • There is no explanation of why a loss of $1.94 m was made on ‘investments’, nor how this fits with ‘Financial assets’ and ‘Property, plant and equipment’.
    • The directors say that Crossview doesn’t have to produce general purpose financial statements (the type that complies with all the Accounting Standards), because there are no users who are dependent on’ such statements. Effectively they are saying that any user, current or prospective, can request Crossview to tailor a set of financial statements to suit them. Given that this is a charity that seeks donations from the public, operates in three states, has a big real estate holding, and receives approximately $1.4 m cash each year from supporters, members, and lessees. Related parties, for instance, are therefore not disclosed.
    • $1.35 m ($1.34 m last year) was received by Crossview for missionaries. The accounting policy for this money is not disclosed, so we don’t know why the money is not included in revenue. Likewise with the $1.34 ‘Payments to missionaries’.
    • Investments properties are included in property, plant and equipment rather than separately as is required by the Accounting Standards.
  • Access Truth Ltd has the same four directors except Linda McIlwain instead of John Sharpe. This looks like Crossview controls Access Truth Ltd, but this question is not addressed in the accounts.

What financial situation was shown in that Report?

• Last year’s return as a percentage of revenue was decreased from negative 150% to positive 41%. However, if we exclude the gain on the disposal of property and the return of $300K to a donor, this year’s figure remains negative (but down to 81%). Expenses are still far more than revenue.
• $3.57 m held in cash and short-term deposits. You might reasonably ask why it is necessary to keep 12 years of revenue and still ask for donations.
• A $10.48 m property portfolio and only $33K of liabilities means that long-term financial structure is very sound.
  • But why the need to hold so much property?

What did the auditor say about the last financial statements?

• The auditor, Jason Sharp, of Macquarie Business Accountants, gave a ‘clean’ conclusion on the Financial Report. Note ‘conclusion’, not ‘opinion’, for this is a review, not an audit^[2].
  • See his fourth paragraph for what he did to reach his conclusion.
• Even if it were the more rigorous audit rather than a review, you still must be careful to take the right amount of comfort from a ‘clean opinion’. See here and here.
• Before you accept his conclusion, please read the ‘Financial Report 2016’ section above.

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

• Yes
  • The fact that they are paying missionaries who are overseas may mean that the absence of countries under ‘Operates in (Countries)’ is incorrect.

Who are the people controlling the organisation?

• The directors are no longer shown on the website.
• Here they are from the ACNC Register (under ‘Responsible Persons’).
  • Geoffrey Henderson
    • Should this be ‘Keith Henderson’ He is ‘Company director at Crossview Australia’.
  • Paul McIlwain
  • John Sharpe
  • Matthew Hillier
• Three of these directors are also three of the four directors of AccessTruth Limited. It appears that Crossview controls this other charity.

To whom is Crossview accountable?

• Not mentioned on the website, but they are a member of Missions Interlink.
  • For one opinion of the strength of that accountability, see the section Activities in this review.
• Also accountable to the ACNC.
• And, as a company, to ASIC.

1. “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. ↑ ↑
2. A review, rather than an audit is permitted by the ACNC because Crossview’s revenue is less than $1 m. (If the money for missionaries was revenue, a full audit would be required.) ↑