Archived: Far East Broadcasting Co (Australia): mini-charity review

Mini-charity review of Far East Broadcasting Co (Australia) (FEBC) as an organisation that is a member of Missions Interlink, and 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.)

FEBC is also of interest because it shares a director, ‘The Trust Lady’, Vanessa Hall, with the CMA Standards C0uncil, Christian Management Australia’s ‘major new initiative, accrediting Christian organisations against a set of standards of good governance, financial oversight, and fundraising ethics.’

Are they responsive to feedback?

• When sent a draft of this review, on 24 March 2017, they responded quickly. However, they did not want to either suggest corrections or submit comments for publication.

Is FEBC registered?

• As a charity, yes.
  • There’s another company with ‘FEBC’ in its name, FEBC Custodian Limited. Note 17 in the Financial Report (see below) says that this company ‘was established solely to act as trustee for the FEBC Overseas Aid Fund’ (The Fund).
  • FEBC has produced financial statements that include The Fund, but not FEBC Custodian Limited.
    • Despite reporting as a group, FEBC still hasn’t taken advantage of the ACNC’s group reporting concessions.
• Other registrations:
  • As a public company, a company limited by guarantee.
    • It is permitted to omit ‘Ltd/Limited’ from its name.
• FEBC is a fundraising vehicle that operates, the ACNC Register says, in all eight states. It also has an internet invitation to donate. Seven states have a fundraising licensing regime. It is exempt in NSW, and has a licence in four of the others. In South Australia, it has a licence in the name of The Fund. It has no licence in the eighth, Western Australia, but doesn’t appear to fit one of the exemptions.

What do they do?

• ‘About Us’ on the website is not about FEBC, but the international FEBC organisation generally. For what they did in Australia in 2016, see the first part of the ‘Description of charity’s activities and outcomes’ in the AIS 2016:
  • In the last financial year, FEBC Australia had (sic) worked hard to effectively communicate needs, relay stories, share prayer points and write up project submissions to raise financial support for overseas projects… (The remainder of their description is about the worldwide FEBC ministry rather than Australian activities.)
• From pages 9 and 17 of the Annual Report, it appears that the countries listed under ‘Operates in (Countries)’ on the ACNC Register, are the countries to which FEBC sends your donation (after expenses), not where it ‘operates’ as conventionally defined.
• The Fund: From the AIS 2016:
  • Funds were raised through FEBC Overseas Fund to support the projects in Cambodia and Mongolia, to empower the poor and marginalised to address issues related to health, food, security, income generation, employment, basic education, gender issues, social justice and civil society. Emergency Communication for disaster relief and support. Child protection Indonesia

Do they share the Gospel?

• No.
  • But they raise money for others that do.

What impact are they having?

• Some anecdotal reports in the Annual Report, but nothing systematic either there or on the website.

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

• The cost of raising and sending the money is 27% of group expenses (up from 23% last year).
• The Fund: They had no expenses outside the money sent overseas.

Can you get a tax deduction?

• No.
  • This is contradicted by the ‘Projects’ page: two projects there are prefaced ‘Tax-deductible project’.
    • The ‘small print’ for each of these projects says that the money goes to a secular organisation, Global Development Group.
  • The Annual Report says that they are investigating
    • Registering FEBC Australia as a public benevolent institution (PBI) to provide another way for tax deductibility for projects and an effective way to relieve poverty and distress to people groups in need across the globe [page 4].
    • How this fits with their mission – Our goal is to communicate the Good News among the nations by media to inspire people to follow Jesus Christ – is not explained.
• The Fund: Yes

Is their online giving secure?

• They have the ‘Norton secured’ seal, so yes.

Is their reporting up-to-date?

• Yes (lodged a little over four months after their year-end – a month earlier 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 that finished six months ago.
• The Fund: The same

Does their reporting comply with the regulator’s requirements?

• AIS 2016: No
  • The ‘Financial Information’ is for the group, whereas it should be for FEBC on its own.
  • Much of what is under ‘activities’ is about the FEBC organisation overseas.
  • No outcomes are reported.
  • ‘Other income’ does not match the same item in the financial statements.
  • There is no evidence that FEBC operated overseas.
  • The Fund: Almost – no outcomes are reported.
• Financial Report 2015: No
  • There are more than 4000 recipients of the monthly newsletter, all over Australia, and this and other efforts generates more than $1.47 m in donations. The directors, via their decision, once again, to produce the type of financial statements that do not have to comply fully with the Accounting Standards (special purpose statements), are effectively saying that any of FEBC’s stakeholders, including the newsletter recipients, can command the preparation of a financial report tailored to their needs. This is implausible.
  • Despite the statement, on page 18 of the Annual Report, that the international programs are shown by program or country, there is no breakup of the $1.15 m sent overseas.
  • There is no explanation for the inclusion of a second income statement, Income Statement for ACFID purposes, especially when FEBC is not a member of the ACFID (Australian Council for International Development).
  • Income Statement
    • ‘Other expenses…’ comprise 81% of the expenses but there is no explanatory Note.
    • The part of your donations that was sent overseas for beneficiaries is not shown.
    • There is no Other Comprehensive Income section.
  • Income Statement for ACFID purposes
    • There is no explanation of the terms used.
    • There is no Other Comprehensive Income section.
    • A note says that ‘Direct and indirect costs have been allocated using an activity based absorption costing approach.’, but no explanation of this approach is given.
    • The Annual Report (page 13) says that their ‘activity based absorption costing approach’ includes ‘Showing details of FEBC Australia’s international programs either by program or by country’. These details are not in the Financial Report.
  • Balance Sheet
    • How was FEBC able to operate an office without any ‘Furniture, Fittings and Office Equipment’?
    • Is the ‘Field Staff Retirement & Resettlement’ figure actually a liability, that is, a present obligation to the field staff? If not, it should be a reserve.
    • If it is a liability, why is it not included in ‘Employee Benefits Provisionss’ (sic)?
    • The treatment of ‘Financial Assets’ is not compliant with the Accounting Standards.
    • ‘Land and Buildings’ consist of two properties in Caringbah.
      • How was the combined cost only $93K?
      • Should one be classified as investment property?
  • Notes to the Financial Statements
    • There is no explanation again this year of the choice of a ‘special purpose financial report’ as opposed to the type that the stakeholders need to make their decisions.
  • The Fund: No report required (and none lodged).

What financial situation was shown by that Report?

• The surplus as a percentage of income was improved marginally.
• Working capital is strongly positive.
• Longer term financial structure appears sound.
• The Fund: NA

What did the auditor say about the last financial statements?

• He gave a ‘clean’ opinion^[1]. However,
  • in accepting the engagement, he implicitly agreed with the directors’ decision to produce special purpose rather than general purpose financial statements (see above),
  • he has not identified the financial reporting framework used, including the type of financial statements (see above),
  • he includes compliance with the Charitable Fundraising Act in his opinion when FEBC is exempt from that Act.
• The Fund: NA

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

• Not quite – ‘Phone’ is blank.
  • Did FEBC operate in all 14 countries listed under ‘Operates in (Countries)?
• The Fund: No
  • The name of the charity does not match the name for the ABN.
    • And if it did then the information would be about FEBC Custodian Limited.
  • ‘Phone’ is blank.

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

• Quite a few, presented a little confusingly.
• Under the ‘Donate’ button in the main menu, other than being able to write in the name of a tax-deductible project, there is only one.
• But to ‘donate’ is not the only way to give. Under ‘Get involved’/ ‘Ways to Give’ in the main menu, there are, in addition to the donate button again, these three options:
  • ‘Give a radio’
  • ‘Give to a project’
    • 10 projects (on of which is a radio, which is also a gift (see below), and a separate option (see above).
  • ‘Give a gift’
    • This leads to the ‘Use Your Gifts’ store, where there are 20 gifts.
    • These are also available under ‘Get involved’/’Gift catalogue’.

Who are the people controlling the organisation?

• Not shown on the website.
• But from the ACNC Register under ‘Responsible Persons’:
  • Peter Ronald Elliott
  • Kuet Qeun Ho
  • Kevin Keegan
  • Kenneth Kingwell
  • Rodney Tant
  • Vanessa Rae Hall
    • Although not shown on this profile, Vanessa is the Chair of the ‘Standards Panel’ (or is it the ‘CMA Standards Council’?), a committee of Christian Management Advancement Ltd, an organisation that believes that
      • Christian organisations should be the standard-setters in terms of impeccable corporate behaviour.
        • The Panel’s mission is to ‘help build faith and trust in Christian organisations’, including by allowing organisations who are compliant with a set of standards, formed by the Council, to display the Council’s seal of approval.
• The Fund: The same, but without Kingwell.

To whom are FEBC accountable?

• They’ve got the FIA ‘Organisational member’ seal, the logo of ‘FEBC International’, the logo of Global Development Group, the ACNC ‘charity tick’, and the Missions Interlink logo towards the bottom here.
  • The ‘FIA’ is Fundraising Institute Australia. Members must comply with its fundraising standards. FIA membership confirmed.
  • FEBC International is ‘an interdenominational radio network ministry, which brings the love of God to the world by broadcasting the gospel of Jesus Christ.’^[2] Organisationally it is also a company in Singapore that provides services to the national organisations, including FEBC. There doesn’t appear to be any accountability involved.
  • Global Development Group is a charity, an “Australian-founded non-government overseas humanitarian development organisation”. FEBC is not accountable to it.
  • FEBC is accountable to the ACNC. (The ‘charity tick’ just says that FEBC is a registered charity.)
  • Missions Interlink has an accountability regime^[3].

1. To take the right amount of comfort from a ‘clean opinion’, please read here and here. ↑
2. FEBC Annual Report 2015-16, page 2. ↑
3. For one opinion on the strength of this accountability, see the section Activities in this review. ↑