Archived: Empower Australia Overseas Aid Fund Inc: charity review

This is a charity review of Empower Australia Overseas Aid Fund Inc (Empower), an organisation controlled by Empart Inc (a Missions Interlink member), and that seeks donations online. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

Are they responsive to feedback?

• There is no invitation, on the website, to submit feedback or complaints.
• ‘About Us’ begins with this though:
  • EMPOWER is a not-for-profit that subscribes to a high standard of accountability and stewardship.
• When sent a draft of this review, they…did not respond.

Is Empower registered?

• As a charity, yes.
  • Empower is controlled by Empart Inc^[1]. But there is no mention of Empart on the website, or in the Financial Report 2016.
• Empower is a Victorian incorporated association (VIC A0047253K).
• It is using the names Empower and Empower Overseas Aid Fund without them being registered.
• Empower operates, per the ACNC Register, in all states except Northern Territory.
  • It has the registration necessary to carry on business interstate (ARBN 621 279 445).
  • Under ‘About Us’, Empower records how it has responded to the existence of state-based fundraising legislation: of the six states that have a fundraising regime that is applicable to charities, Empower says that it is registered in five (Queensland, New South Wales, Victoria, Tasmania, and South Australia), but doesn’t mention the sixth (Western Australia).
    • The registrations for all bar Tasmania are confirmed. For Tasmania, Empower says ‘Approval to Solicit for Charitable Donations’. However, they are not in the Tasmania government’s ‘List of approved charities in Tasmania’.
    • You’ll find links to each regulator’s website on the left hand side here.

What do they do?

• Empower says that it ‘exists to equip, educate and empower those suffering sickness, poverty, destitution and misfortune through sustainable community transformation projects in developing countries.’ It doesn’t do this itself, but through local partners. Instead, it is about ‘Transferring funds or goods overseas’ [Annual Information Statement (AIS) 2016].
• Empower operates overseas, per the ACNC Register, in India and Nepal.
  • Only India is mentioned under ‘Projects’ in the main menu.

Does Empower share the Gospel?^[2]

• 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?

• If ‘Designated Expenses’ means the money sent to India (as the AIS 2016 implies), then it cost $91K to send $600K. That’s 13% for ‘administration’.
  • But give that they share an office with their parent entity, and have no property, plant and equipment, how much ‘administration’ is borne by that entity?

Do they pay their board members?

• There’s nothing prohibiting this in the constitution.
• There is insufficient disclosure of expenses to check for such a payment.

Can you get a tax deduction?

• Yes

Is their online giving secure?

• Stripe is used, so yes.

Where were your (net) donations sent?

• This is not disclosed. Even the country.
• From my internet research two years ago, I found the following organisations associated with Empart, and therefore organisations who could be recipients of the money:
  • Compassion for India
  • CFI Ministries
  • CFI Charitable Trust
• From the returns lodged with the Indian Government, we can see that Australian donors’ money was received by the last two of these: CFI Ministries in Chandigarh and CFI Charitable Trust in Orissa.
  • The returns submitted by these two organisations, when combined, show that approximately $472K was received in the year ended 31 March 2017. This compares to $600K recorded by Empower for ‘Grants and donations made…for use outside Australia’ in the AIS 2016 in the year ended 31 December 2016. This $128K difference may be due, apart from minor translation differences, to the three-month difference between the two years in question. Just ask them.
• Whatever the amounts, you might also ask them what procedures ensure that your donation will be used for the purpose you have designated.
• ‘Cash and Cash Holdings’ (what’s the difference?) in Australia increased dramatically (without explanation) from $80K to $387K. Even so, it seems reasonable compared to the amount of cash that is held by the two recipients of the Australian donations in India: $701K. That’s a lot of Indian purchasing power.
  • With an organisation that is required to model Jesus as Lord and Saviour to the poor and oppressed of India, it would be legitimate for you to ask Empower why they hold this much.

Is their reporting up-to-date?

• Yes (five and a half months after their year-end, one and a half months later than last year).
  • 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 14 months ago.

Does their reporting comply with the regulator’s requirements?

• AIS 2016: No
  • $58 K for ‘Employee expenses’ doesn’t match the reporting of nine employees (three of whom are full-time).
  • Why ‘No’ for ‘Financial report submitted to a state/territory regulator?’?
  • The financial statements are described incorrectly.
  • The description of activities is not about Empower, but what is done by other organisations overseas.
  • No outcomes are given.
  • Its own name is included under ‘Other names charity is known by…’.
• Financial Report 2016: No. Not a true and fair view.
  • One of the four required financial statements is missing.
  • Both the Income Statement, and the Statement of Financial Position are a long way sort of what is required.
  • Even though Empart collects donations on behalf of Empower, they share an office, and the directors are six of the eight directors of Empart, Empower doesn’t mention of the relationship.
  • The directors have, without giving their reasoning, elected to prepare special purpose rather than general purpose financial statements. This choice, a choice that means that not all the Accounting Standards have to be followed, is only correct if no user, present or prospective, is dependent on standard financial statements to make decisions. For an organisation that operates in seven out of eight states, had a turnover of $752K, and seeks donations from the public, this is stretching plausibility.
  • ‘Amounts written back equity’ is included without explanation, and, counter-intuitively, as a cash flow.
  • ‘Designated’ donations are, without explanation, recorded as a liability.

What financial situation was shown by that Report?

• The condition of the Report (see above) means that it is difficult being anywhere near definitive, so I’ll pass.

What did the auditor say about the last financial statements?

• The auditor, Ben Tardrew CPA, of Tardrew Partners, gave a ‘clean’ opinion.
  • But because of what I have identified above, he shouldn’t have done. (See here and here to learn about opinions.)
  • Ben is only qualified to do this audit because of the ACNC’s transitional provisions for reporting by incorporated associations:  the Victorian regulator doesn’t require the audit of Empower to be performed by a registered company auditor.

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

• No
  • There is a message ‘Charity to select subtype’, and
  • Empower’s legal name is not an ‘Other Name…’

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

• ‘Safe Water – Wells’
• ‘Street Children’
• ‘Safe Home’
• ‘Toilets’
• ‘Schools’
• ‘Agricultural Development’
• ‘Where Most Needed’

Who are the people controlling the organisation?

• It says, on the website, that there is a board, but the members are not shown.
• The ACNC Register, under ‘Responsible Persons’, says that its these people:
  • Jan de Bruyn (just ‘Bruyn’ as the last name)
  • Brian Holmes
  • Markus Koch
  • Paul Lambert
  • Daniel Muggeridge
  • Peter Sypkes
  • All these directors are also directors of Empart.

To whom are Empower accountable?

• As a charity, to the ACNC:

• The logo is the ACNC’s ‘charity tick’.  Apart from saying that Empower is registered with them, the ‘tick’ also means that Empower’s AIS is not overdue, and the ACNC has not taken any compliance action against it.
  • • But no more than this.
• The ACNC’s standards are part of the ongoing obligations as a registered charity.
• Empower is not, as it says, a ‘large Charity’, but a ‘Medium’ one. This means that it could have a review rather than an audit.
• Empower is also accountable to the Victorian regulator of incorporated associations.

1. Empart does not produce consolidated financial statements. It does not explain why. (Empower is not even mentioned in the accounts.) Empart has not taken advantage of the ACNC’s group reporting concessions. ↑
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. ↑