Archived: Crossway Lifecare Ltd: mini-charity review

Mini-charity review of Crossway Lifecare Ltd (CL), an organisation that is connected, by the cross directorship of John Peberdy, to Christian Management Australia, the body accrediting ‘Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’

Is it responsive to feedback?

• When sent a draft of this review, on 29 May 2017, they…did not respond.

Is it registered?

• Yes, as a charity.
  • CL is wholly-owned by Crossway Baptist Church Inc.
  • Because the Church has not taken advantage of the ACNC’s group reporting concessions, CL must report separately.
• CL is a public company, a company limited by guarantee.
  • It has the provisions in its constitution to enable it to omit ‘Ltd/Limited’ at the end of its name.
• The ACNC Register says that CL operates only in Victoria. It has a fundraising licence there. The other six states that have a licensing regime were not checked^[1].

What does CL do?

• See the menu down the left-hand side of every webpage.

Do they share the Gospel^[2]?

• As donors can get a tax deduction, this is unlikely.

What impact are they having?

• Nothing systematic found.
  • The last Annual Report on the website is for 2015.

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

• A mixed classification of expenses (contrary to the Accounting Standards) means that it is not possible to make this calculation.

Can you get a tax deduction?

• No

Is their online giving secure?

• If security is mentioned, it is after you enter your details on the first page.

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

• None

Is their reporting up-to-date?

• Yes (four months after their year-end, a week later than last year).

Does their reporting comply with the regulator’s requirements?

• Annual Information Statement 2016 (AIS 2016): No
  • ‘Activities’ are not reported.
  • ‘Outcomes’ are not reported.
  • ‘Other income’ is greatly overstated.
• Financial Report 2016: No
  • Special purpose financial statements are not appropriate. CL has 29 employees, 147 volunteers, a turnover of $2.49 m, an incomplete building that has cost $5.48 m so far, and helps hundreds of people. It is stretching credulity for the directors to conclude, as they have effectively done, that all CL’s users, both present and prospective, are able to command the preparation of financial statements tailored to their needs.

What financial situation was shown in that Report?

• Revenue increased 25%.
• The surplus as a percentage of income has increased from a relatively high 35% to 39%.
• Donations were 63% of revenue. Only 1.4 months’ worth of donations is held in cash, cash equivalents or financial assets.
• Working capital (current assets less current liabilities) has improved, but is still strongly negative.
  • There is no comment on the going concern assumption.
  • The directors concluded that ‘there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable’ [Directors’ Declaration].
• Long-term financial structure appears sound.
  • There are some substantial financial transactions, to do with a new building, between related entities (and Baptist Financial Services Australia Ltd), that are described in the Notes.

What did the auditor say about the last financial statements?

• He gave a ‘clean’ opinion^[3].
  • 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.

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

• ‘Email’, Phone’ and ‘Website’ are blank, but none are compulsory.

Who are the people controlling the organisation?

• Not shown on the website.
• Under ‘Responsible Persons’ on the website:
  • Caryn Chan
  • Mark Churchward
  • Edward Harrison
  • Francis Hoe
  • Kok Looi
  • John Peberdy
  • Scott Pilgrim
  • Margaret Spicer
  • Dale Stephenson
  • Beth Strybosch
  • Timothy Wilson
    • John Peberdy is a director of Christian Ministry Advancement Ltd, the organization that is introducing a ‘major new initiative, accrediting Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’
    • There are 14 directorships recorded for the name ‘John Peberdy’, and eight for Timothy Wilson (after eliminating four repeated entries for one charity). 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 and Timothy are not directors, you are left with their total being more than a handful, it would be legitimate for you to question whether their ability to discharge their fiduciary responsibilities is threatened.

To whom is CL accountable?

• To the ACNC as a charity, and to ASIC as a company.

1. 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. ↑
2. “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. ↑
3. To take the right amount of comfort from a ‘clean opinion’, please read here and here. ↑