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EA Foundation: mini-charity review

Care:  At least some of the information about this charity is no longer current.  Use the ‘Search charity names’ box to see if there is a later review.  If the latest review has a message like this, you are welcome to make your case for an updated review via email to ted@businessbythebook.com.au.

Mini-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.’

Is it responsive to feedback?

  • They were sent a draft of the review on 26 May 2017. They…did not respond.

Is it registered?

  • Yes, as a charity.
    • From its constitution, it is the trustee for the EA Trust Fund. If this is the Evangelical Alliance Foundation Trust Fund, then isn’t EAF effectively registered as a charity twice, once as EAF and again as The Trustee for Evangelical Alliance Foundation 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 $20K in ‘Gift and bequest’ (sic) ($28K last year), and has no obvious request for donations on its website, so the lack of licences to fundraise is probably reasonable.

What does EAF do?

  • It says ‘About the EA Foundation’ here, but from this it is far from clear exactly what EA does.
  • 94% of the revenue comes from ‘commission’ but nowhere in the financial report is it explained how this commission is earned.
    • ‘Revenue’ under ‘Significant accounting policies’ does not mention commission.
    • This is how they described their 2016 ‘activities and outcomes’:
      • The EA Foundation continued to build its income generating activities and distributed funds to organisations undertaking activities consistent with the Foundation’s purposes.
        • ‘Grants paid’ were $70K, 11% of revenue.
    • Note 1 to the financial statements says differently: it says that EAF’s ‘principal activities’ was the ‘oversight, mentoring, and assisting members (sic) of the EA Family Covenant of Cooperation and Fellowship’.

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 (on the last day that it was due, seven months after their year-end).

Does their reporting comply with the regulator’s requirements?

  • Annual Information Statement 2016 (AIS 2016): 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).
    • The description of activities is not particularly about 2016.
    • No outcomes are reported.
  • Financial Report 2016: Questionable
    • The directors have adopted the lower standard special purpose financial statements. They have been able to do this because they have effectively said that any of the EAF’s users, either present or prospective, can request EAF to tailor a financial report to their needs. With a professional staff separate to the members, operations in all states, and multiple international and local affiliations, this is questionable.
    • EAF has produced consolidated financial statements, yet the three entities they have ‘consolidated’ are not separate entities but trading names of EAF.
    • Despite overseeing the organisations in the EA ‘Family(see above), there is no related parties’ disclosure.
    • There is no information on the three ‘subsidiaries’.
    • The largest item of revenue, by far (73%), ‘NL commission received’, is unexplained.
    • The reserve used for the change in the value of financial assets could easily be confused with the one conventionally used for the revaluation of property.

What financial situation was shown in that Report?

  • The surplus as a percentage of revenue declined markedly from 26% to 10% 1% [corrected 24.04.18].
  • ‘Consultancy fees’ are separated from ‘Audit & professional fees’, and are an identical amount to last year ($32K).
  • The margin of current assets over current liabilities (working capital) was maintained at 20%.
    • 94% of the liabilities are the unexplained item ‘Held in trust’, under ‘Trade and other payables’.
  • Long-term capital structure appears sound.

What did the auditor say about the last financial statements?

  • He was asked to review the statements, not audit them.
  • Although he gave a ‘clean’ conclusion, the auditor, Matthew Hung of rdl.accountants,
    • agreed with the directors’ decision that there are no users (present or prospective) who are dependent on general purpose financial statements, and
    • reported on EAF rather than the consolidated entity (although, as we saw earlier, this may have been accidentally correct).

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

  • ‘Phone’ and ‘Website’ are missing – but these are not compulsory.

Who are the people controlling the organisation?

  • Not shown on the website.
  • Per the ACNC Register:
    • Ronald Clough
    • Richard Dickins
    • John Peberdy
    • Robert Rawson
    • David Spargo
      • Is it this David Spargo?
    • John Yates
      • John Peberdy and Robert Rawson are directors 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 the register only covers charities, not all not-for-profits, and no for-profit organisations. Therefore, if after eliminating the charities for which John 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?

  • To the ACNC.
  • And, as a company, to ASIC.
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