Archived: Deaf Ministries International: mini charity review for donors

Mini charity review of Deaf Ministries International (DMI) as an organisation that seeks donations online. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(To see the situation last year, read this review.)

Are they responsive to feedback?

• When sent a draft of this review, they…did not respond.

Is DMI registered?

• There is a Deaf Ministries International Limited registered as a charity in Australia (DMI-A).
• The ‘about us’ page on the above website says that DMI has incorporations in the US and Norway. The ‘sponsorship’ page says that ‘DMI is registered as a Charitable Non-Profit Organization’ in Australia and the US’. No Norway.
  • It also operates in the other countries listed here.
• The website is headed Deaf Ministries International, and Australia (with a charity of the same name) has a page on it.
  • There it says that that DMI has a board – ‘Rod Chapman sits on the Australian Board as Chairman and on the International Board as Director of International Pastoral Care’ – but there is no further information about this entity on the website.
  • The other board members may be outside Australia, but ‘Australia is host to the International Office of DMI (Australia’s webpage).
  • The website, supported by the AGM report, gives the impression that the two offices are run as one.
• DMI-A is a public company, a company limited by guarantee.
  • As it has the necessary provisions in its constitution, DMI-A is entitled to omit ‘Limited/Ltd’ when it uses its company name.  (As it does on its website and its Facebook page.)
• Other DMI-A registrations:
  • For the year covered by the latest Annual Information Statement (see below), DMI-A was an incorporated association. It changed in February 2016.
  • DMI-A operates – per the ACNC Register – in all Australian states. It doesn’t have a licence to fundraise in any of the seven that have a licensing regime^[1].
• DMI-A controls another two Australian charities:
  • Deaf Action Limited
    • The sole member – at least at the time of registration – is DMI-A.
      • This is a much stronger relationship than ‘a partnering arrangement’.
    • Only registered in February this year, so no Annual Reporting yet.
    • Previously was Deaf Action Inc., a Victorian incorporated association.
    • Is the trustee of Deaf Action Fund.
    • Has a separate website.
      • There is no mention here that Deaf Action Limited is controlled by DMI-A.
  • The Trustee for Deaf Action Fund
    • A public ancillary fund (endorsed as a DGR) since 2007.
    • The last Financial Report shows a turnover of $221K.
  • Although DMI-A controls the Fund, they issue a joint newsletter, and hold just one AGM covering both charities
    • DMI-A has not taken advantage of the ACNC’s group reporting provisions.
    • DMI-A has not lodged consolidated financial statements with the ACNC, and
    • Neither Financial Report mentions the relationship.

What does DMI-A do?

• They run support groups and raise money (see What choices… below).
• The second part of their description in the AIS 2015 is about some other part of DMI, not DMI-A:
  • Deaf Ministries International raises funds in Australia to support Christian ministry to the deaf in developing countries throughout Africa and Asia. DMI also runs primary and secondary schools for deaf children, and provides training and employment opportunities for deaf adults in those communities.

Do they share the Gospel?

• No

What impact are they having?

• Nothing found on the website.

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

• If we define ‘direct’ as ‘Project expense’, $283K to deliver $624K.
  • ‘Employee benefits expense’ were 22% of total expenses.

Can you get a tax deduction?

• No
  • This is contradicted by the second section on the home page of the website.
    • The explanation lies in the fact that DMI-A collects these donations on behalf of another charity.

Is their online giving secure?

• PayPal is used, so yes.

Is their reporting up-to-date?

• Yes (lodged five and a half months after their year-end).
  • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are for a year end that is now over 10 months ago.

Does their reporting comply with the regulator’s requirements?

• AIS 2015: Not quite. No outcomes given.
• Financial Report 2015: Only if you agree that
  • it is reasonable for the directors to say that DMI-A is not a reporting entity because there are no users dependent on conventional financial statements.
    • Do they realise that they are saying that anybody who has an interest in DMI-A can request a financial report tailored to their specific needs?
  • it is reasonable for the directors to say that the accounts show a true and fair view while leaving out the two subsidiaries.

What financial situation was shown by that Report?

• Remembering that, with the exclusion of their subsidiary, Deaf Action, the Report shows only half the picture:
  • They turned a 2% surplus as a percentage of income to a deficit of 5%.
  • Short-term liabilities exceed short-term assets by 32%.
  • There is negative equity of $19K.
  • The directors raised the question (Note 1(o)) of whether the assumption that DMI-A was a going concern was still valid. They said that it was because they could defer spending on projects to pay the bills.

What did the auditor say about the last financial statements?

• He concluded from his review – not an audit – that ‘except for the effects on the financial report of the matters referred to in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the annual financial report…does not satisfy the requirements of the [ACNC] Act 2012 and the Associations Incorporation Reform Act 2012…
  • Even if this were a ‘clean’ conclusion rather than a qualified conclusion, it would, as a review rather than an audit, provide a lower level of comfort^[2].
• This is the reason for the qualification:
  • Deaf Ministries International Inc. receives income from cash donations. It was found that there are not appropriate controls over income received prior to entry into the accounting records.
    • Hopefully the auditor means just cash donations, not all donations, let alone all income.
    • Why is it not practicable for the company to control this cash? Most other companies can. (Or at least enough to avoid a qualified audit report.) Directors please read this.
• The auditor has omitted to mention the going concern issue. He should have at least included an Emphasis of Matter paragraph.

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

• Yes

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

• The choices are confused by the fact that they occur in four different places on the website, and cover not only DMI-A but also DMI and the Fund:
  • Under the ‘Donate’ menu item:
    • ‘General Donation’
    • ‘Sponsorships’
    • ‘Helping a deaf worker attend the 2017 DMI Conference’
  • Under the ‘Sponsorships menu item:
    • ‘Sponsor a Child Now’
    • ‘Sponsor a School Now’, and
    • ‘Please see Australian Tax Deductible Projects’
      • This is the Fund acting as an agent for World Relief Overseas Aid Fund,
      • 1323 Wakiso Secondary School (& others) – Uganda
      • 1324 Ligao Schools – Philippines
      • 1326 Davao – Philippines
      • 1327 Immanuel School for the Deaf – Kenya
      • 1333 Visayas – Philippines
      • 1334 Muir (Immanuel) School for the Deaf – Myanmar
        • These projects are not described on the website.
  • Under the ‘Projects’ tab, three ‘projects’ that appear to be something different to the tax-deductible projects above:
    • • ‘Sponsor a Pig’
      • ‘Sponsor a Sewing Machine’ (Kenya)
      • ‘Sponsor a Sewing Machine’ (Burundi)
  • On the home page, a ‘Bible School and Church Fund’

Who are the people controlling the organisation?

• The office staff (combined DMI, DMI-A, and the Fund) are shown on the website, but the DMI-A directors are not identified. The ACNC Register lists them under ‘Responsible Persons’. (The same directors as for the subsidiaries.)
  • The 21 May 2016 AGM report, a joint report of DMI-A and the Fund, shows two other members: Geoff Brooke and Lynne Graham.

To whom are DMI-A accountable?

• Not claimed on the website, but they are members of Missions Interlink, an organisation that has a set of standards with which DMI-A must comply.
• DMI-A is also accountable to the ACNC.

1. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions. ↑
2. To take the right amount of comfort from a ‘clean opinion’, please read here and here. ↑