Archived: EA Foundation: charity review

This is a charity review of EA Foundation (EAF), an organisation that is connected, by the cross-directorship of John Peberdy and Robert Rawson, to Christian Ministry Advancement Ltd, the organization that is responsible for the CMA Standards Council’s ‘major new initiative, accrediting Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’

For the previous review, see here.

Is it responsive to feedback?

• I sent them a draft of this review. Like last year, they did not respond.

Is it registered?

• Yes, as a charity.
  • From its constitution, it is the trustee for the EA Foundation Trust Fund.
  • There is another charity purely for EAF’s role as trustee, The Trustee for Evangelical Alliance Foundation Trust Fund (the Trust Fund).
  • The existence of two charities implies that EA does things in addition to its role as trustee for the Trust Fund. However, the information that EAF supplies to the ACNC, except for three additional board members, is identical to the information it supplies for the Trust Fund.
• EAF is a public company, a company limited by guarantee.
  • It is entitled to omit ‘Limited/’Ltd’ from the end of its name.
• It operates, per the ACNC Register, in all states. But it received only $3K in ‘Gift and bequest’ (sic) ($20K last year), says in the AIS 2017 that it doesn’t intend to fundraise, and has no obvious request for donations on its website, so the lack of licences to fundraise is probably reasonable.

What does EAF do?

• From the above information, EAF’s only business is to act as the trustee for the Trust Fund. But this does not agree with what EAF says in its public documents.
• This is what they are meant to be doing:

• So, more than not just being the trustee of the Trust Fund.
• This is how they described their 2017 activities in the AIS 2017:

• ‘Grants paid’ were $60K, 9% of revenue (down from 11%).
• The introduction to the Notes to the Financial Statements says that ‘The principal activities of the Company for the year ended 30 June 2017 were advancing the Christian Religion (sic) in Australia through oversight, mentoring and assisting members of the EA Family Covenant of Cooperation and Fellowship including the operating of the EA Insurance Project…
• There is no description of the ‘oversight, mentoring….’ outside the operation of an insurance brokerage.

Do they share the Gospel?

• No

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?

• It is not clear what impact they are seeking, so no calculation can be made.

Can you get a tax deduction?

• No

Is their online giving secure?

• NA

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

• NA

Is their reporting up-to-date?

• Yes (a day late, seven months after their year-end, and the same time as last year).

Does their reporting comply with the regulator’s requirements?

• AIS 2017: No
  • The Trustee For Evangelical Alliance Foundation Trust Fund is not another name for EAF, but a charity in its own right (see ‘Is it registered’, above).
  • ‘Other comprehensive income’ and ‘Total comprehensive income’ are incorrect.
  • No outcomes are reported.
• Financial Report 2016: No, a true and fair view is not shown when
  • the introduction to the Notes to the Financial Statements says that ‘The financial report covers EA Foundation as consolidated entity (sic) consisting of EA Foundation and the entities it controlled…’, yet
    • EAF presents itself elsewhere (see above) as just being the trustee for the Trust Fund,
    • The report title, the statements, the directors and the auditor make no reference to consolidation,
    • Two of the three trusts said to have been consolidated [Note 2(a)] are not separate entities with an ABN, but only trading names of EAF.
    • Note 2(a) says that there are ‘other wholly owned subsidiaries’ but doesn’t identify them.
  • 97% of the revenue comes from ‘commission’ but nowhere in the Financial Report does it say how it was earned.
    • ‘Revenue’ under ‘Significant accounting policies’ does not mention commission.
  • 74% of the liabilities are the unexplained item ‘Held in trust’, under ‘Trade and other payables’.
  • There are many other issues.

What financial situation was shown in that Report?

• Because of the answer immediately above I make no comment.

What did the auditor say about the last financial statements?

• The auditor, Joel Hernandez, CA, of rdl.accountants, was asked to review the statements, that is, not audit them.
• Given the issues identified above, his ‘clean’ conclusion is highly questionable.

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

• The Trustee For Evangelical Alliance Foundation Trust Fund is not another name for EAF, but a charity in its own right (see ‘Is it registered?’, above).
• ‘Who the Charity Benefits’ is blank.
• ‘Phone’ and ‘Website’ are missing (but these are not compulsory).

Who are the people controlling the organisation?

• Not shown on the website. But, per the ACNC Register (under ‘Responsible Persons’), they are
  • Ronald Clough
  • Richard Dickins
  • John Peberdy
  • Robert Rawson
  • David Spargo
    • Is it this David Spargo?
  • John Yates
    • Is it this John Yates?
    • John Peberdy and Robert Rawson are directors of Christian Ministry Advancement Ltd, the organization that has introduced a ‘major new initiative, accrediting Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’
    • There are 11 directorships recorded for the name ‘John Peberdy’. And the register only covers charities, not all not-for-profits, and no for-profit organisations. Therefore, if after eliminating the charities for which EAF’s John Peberdy is not a director, you are left with the total being more than a handful, it would be legitimate for you to question whether his ability to discharge his fiduciary responsibilities is threatened.

To whom is EAF accountable?

• As a charity, to the ACNC.
• And, as a company, still for some things, to ASIC.