Entrust Foundation
This is a review in the series ‘Organisations accredited by the CMA Standards Council’. The CMA Standards Council is ‘a ministry of Christian Ministry Advancement’[1], with a mission “to help build faith and trust in Christian organisations, be they churches, charities, schools or otherwise, to enable them to achieve more effective outcomes’[2].
The Council recently announced that ‘Entrust Foundation’ had been accredited:
It achieved this by meeting the Council’s ‘Principles and Standards of Responsible Stewardship’, and therefore is able to be promoted as a ‘high quality organisation’.
A ‘Directory of Accredited Partners’[3], promoted to the public as an aid to their donation decision, is one of the main gains from accreditation. But for some reason Entrust has not been included in this directory. Given the effort that Entrust had to go through to get the accreditation, why has it not had this corrected?
Entrust’s comment: ‘I’m confident they will “catchup”.’
Entrust Foundation seeks online donations.
Donors
The charity regulator, the ACNC, in their article, Donating to Legitimate Charities, gives “some things to consider to help you make sure your donation is going where it is intended”:
- Check the charity’s name.
- Ask for identification from anyone seeking a donation.
- Be careful of online requests for donations.
- No tax deduction doesn’t mean the charity is not a legitimate one, and
- Find out more about how the charity says it uses donations.
Here’s the results for ‘Entrust Foundation’ with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?[4]
Question 1
A search on the ACNC Register of charities for ‘Entrust Foundation’ gives a charity in the name M E Foundation For Aid and Relief Ltd.’ (sic) (Entrust). This is because this charity has ‘Entrust Foundation’ under ‘Also known as’ on the Register.
Entrust is part of an ACNC approved reporting group, Mission Enterprises (VIC) Ltd_ACNC Group. The other members of the Group are Entrust Capital and Mission Enterprises (Victoria) Limited.
The parent company, Mission Enterprises (Victoria) Limited is not to be confused with the other two ‘Mission Enterprises’ charities:
But are they nevertheless connected? The Entrust parent still, two years later, has the website of Mission Enterprises Limited on the ACNC Register as its website.
Entrust’s comment: ‘Friends, but not legally connected. The web site was a faulty link.’
This is how Entrust describes its legal status:
This is incorrect. ‘Entrust Projects’ is not part of Entrust, but a business name held by the parent company. There is no such entity mentioned on the Entrust website.
Entrust’s comment: ‘We have been working on a new website for longer than expected. Held up but this will be addressed in the new web site.’
Other registrations
Entrust has the name Entrust Foundation registered as a business name.
Entrust holds a fundraising licence in none of the states where one is required, and there is no mention of fundraising licences on the website[5].
Entrust’s comment: ‘Correct, 95% of our funding comes from our personal connection with our donors. Donations we get via the web site are usually as a result of personal contact.’ [We are] very confident that this is the criterion for when a licence is required in all those states and territories with a licensing regime.’
Reviewer’s response: ‘Fundraising’ includes requesting donations online. The success or otherwise of that request may or may not make a difference to whether a licence is required. ‘Online’ may include the invitation to send a direct deposit.
Whatever Entrust’s decision, because donors see other charities holding one or more fundraising licences, it might be wise for Entrust to be transparent about its reasoning for not holding any licences.
Question 2
Nothing in Entrust’s public materials indicates that it uses either volunteer or professional door-to-door or street collectors.
Entrust comment: ‘We do not do any door to door or street “fundraising” but build relationships with partners.’
Question 3
Entrust’s web address has a ‘closed padlock symbol next to the website’s URL in the address bar’, so the website is secure [the first ACNC article above].
But there is no information in the online donation process about the security of your information.
Entrust’s comment: ‘CMA Standards addressed this and it will be changed in FAQ’s on our new site.’
Question 4
‘Will my donation be tax deductible?’ on the charity’s ACNC Register record shows that a tax deduction is available. The website, supported by this FAQ, says differently:
This is misleading: ‘M E Foundation for Aid and Relief’ is Entrust, not a separate entity.
Entrust’s comment: ‘Entrust is the registered trading name for M.E. Foundation of Aid and Relief. We will make this clearer in our new web site.’
Why some projects are not eligible for a tax deduction is not explained.
Entrust’s comment: ‘We now only put deductible projects on our website.’
Question 5: Where’s the money go?
Sharing the Gospel?[6]
No
Entrust’s comment: ‘We work with Christian in-country partners. Our actions in community development are the Gospel in action. DGR1 funding is only used for CD. We also fund Church focussed projects from non-deductible funds, these projects are available by request.’
Reviewer’s response: See the footnote.
Financial reporting
The audited account of how donations are used is the Financial Report on the ACNC Register. Because Entrust is a member of an ACNC reporting group, it doesn’t have to lodge such a report. For ACNC purposes, its information is consolidated with the other two charities in the group.
The financial statements of the parent, Mission Enterprises (Victoria) Limited, do not include any information about Entrust. They don’t even mention Entrust. The Entrust annual report does not include financial statements.
For this reason, we cannot check Entrust’s repeated and prominent claim that 100% of your donation goes to the project.
Entrust’s comment: ‘100% does go to the projects – we fund overheads from our capital. Our auditors have checked and signed off on this. We fund our costs through investment of the founders capital, in order to get 100% to the projects.’
So, as second best, we present below answers using the Group’s ACNC information.
The directors’ declaration about the statements
The directors signed a declaration [Directors’ Declaration, Financial Report 2021] that
For this to be true, the directors must have chosen the correct type of financial statements.
The directors chose special purpose financial statements over general purpose. These are only relevant where all the users can ring Entrust’s office and command the preparation of financial statements tailored to their needs. If they can’t do this, then the users are dependent on a regulator to specify the form and content of the financial statements. As users, you are then ‘potentially interested in the information provided in general purpose financial reports’[7].
The requirements of special purpose statements are less onerous than those of general purpose.
With a parent and two subsidiaries, revenue of $2.98 million, 17 staff, donations solicited from the public, and multiple overseas projects, the choice of special purpose statements is highly questionable. Which means the directors have made a highly questionable declaration (see below for who they were).
Entrust’s comment: ‘The advice we received was to consolidate our accounts for ACNC reporting purposes.’
Reviewer’s response: It is not consolidation that is in question, but the type of financial statements.
The auditor, Peter Shields, Saward Dawson, Chartered Accountants, agreed with the directors’ choice. This again is a highly questionable decision, both because of the argument given above, and this opinion of his professional body[8].
Additional issues
- The directors have chosen not to comply with all the recognition and measurement requirements of the Accounting Standards.
- There is no information given for the $2.30 million ‘Donations to projects’.
Who was responsible?
There is no Directors’ Report (it is not compulsory, but charities often include it as part of their accountability), but it is reasonable to assume that the people shown in the Year in Review 2020/2021, under ‘Board’ (except the two Observers), plus the Chair, Mike Woods, were those that signed the accounts:
The CEO, Richard Beaumont, is in the review between the Chair and the Board (page 22 of the Review), but this does not automatically tell the reader that the person is on the board. Many CEOs are not.
The ACNC Register shows that Rebecca Brown has joined the board since, and that maybe Richard Beaumont was also on the board.
Entrust’s comment: ‘Richard has been on the Mission Enterprises (Vic) Ltd Board for 20 years.’ Mission Enterprises Vic) Ltd and M.E. Foundation for Aid and Relief have the same Board members.
Reviewer’s response: The ACNC Register does not match this.
Entrust has one member, its parent company. That company has only eight members, so there’s effectively no accountability there.
Entrust’s comments: ‘There is complete accountability as one board is responsible for three entities.’
Reviewer’s response: But who holds them accountable?
Where the donations went
There is no public disclosure of the destination of your donation to Entrust, but here are the major expenses for the Group (with last year in the second column):
- There is no information given for the $2.30 million ‘Donations to projects’.
Entrust’s comments: ‘The year in Review is just that. NOT an annual report.’
Reviewer’s response:
But because there are no financial statements this is all that the reader has.
It is Entrust’s decision not to include its financial statements in the annual report, whatever it is called.
The CMA Standards require an ‘annual report’, and such a report normally includes the financial statements.
Entrust’s comment: ‘Consolidtated financial statement is avail on the ACNC site’.
Reviewer’s response: It is Entrust that is the CMA Standards Council partner, not the parent company; although not an uncommon practice, Entrust has chosen not to include any information about Entrust in the consolidated statements.
- Nor are we told how the charity ensures that (a) the project funds reach the intended destination, and (b) they are used for the purposes for which they were given.
Entrust’s comment: ‘That is a management responsibility which we undertake with great care.’
- The $325K ‘Employee benefits expense’ covers three full time equivalent employees [AIS 2021].
Entrust’s comment: ‘Entrust continues to grow, we currently have over 5 FTE and several volunteers’.
Impact
Everything Entrust is doing may be being done ‘properly’ (the behaviour of its people, its use of money, and how it goes about its business), but unless the money is producing the change in people that the charity intends (i.e., an impact), the money would be better used elsewhere. And the same applies if the impact is less than is being achieved by another charity.
Entrust’s comment: ‘Every Entrust donor receives regular reports on the projects they helped fund. These reports give statistics regarding impact’.
Entrust use the term ‘impact’ but do not define it. Although there are some anecdotal reports of changes in beneficiaries on the website, nothing systematic was found.
Standard 5.6 of the CMA Standards council standards (see above) requires that regular program evaluations. There is no evidence that Entrust intends to do these.
Entrust’s comment: ‘Program evaluations are done comprehensively via applications, reporting, completion reports, zoom calls, email and personal partner visits.’
Reviewer’s response: This is not what is normally meant by ‘program evaluation’. Nor, in any reasonable view, is it consistent with the Council’s description.
Entrust’s comment: ‘CMA and our auditors are very happy with our standard of management and reporting.’
Charity response
We sent a draft of this review to the charity. Their comments are included above.
- Linked added by us. ↑
- Emphasis in original. ↑
- Having the list of accredited organisations on a site that is not secure is inconsistent with this building of ‘faith and trust’:
↑http://www.cmasc-generosity.net.au/directory.php ↑ - A section in the article, Donating and Volunteering:
- Focus on the nature of the charity’s work, its beneficiaries and the impact the charity is having in the community.
- Is it clear what the charity is trying to achieve and how its activities work towards its objectives?
- Would you like to spend your money, or time if volunteering, to support these objectives?
- Is the charity being transparent about its activities?
- Its parent company has a licence in Victoria (and only Victoria). As does Entrust Capital. ↑
- ‘When Helping Hurts by Brian Fikkert and Steve Corbett says this about sharing the Gospel: ‘A host of contextual issues determine the best manner and the appropriate time to present the gospel verbally, particularly in militant Muslim or Hindu settings. But without such a presentation, it is not possible for people to be personally transformed in all their relationships, which is what poverty alleviation is all about [Kindle Locations 1262-1264, Moody Publishers] ↑
- From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au. ↑
- Enhancing Not-for-Profit Annual and Financial Reporting, March 2013, accessed from their website March 2020. ↑