FEBC Australia: charity review

This is an update of the July 2019 review of the charity FEBC Australia. The previous review (in black) is used as a base, with comment only if the situation has changed or extra information would be helpful.

COVID-19

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]. ‘FEBC Australia’ (FEBC) is one of these accredited organisations.

FEBC is also a Member of Missions Interlink^[3], Missions Interlink being ‘the Australian network for global mission’^[4]. The review is therefore simultaneously a review in the series ‘Members of Missions Interlink.’

The specific comments that FEBC made in response to a draft of this review have been included below^[5].

Charity response:

We sent a draft of this review to FEBC. They received the email but chose not to respond.

Donors

FEBC is an organisation that seeks donations online. The charities’ 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”:

1. Check the charity’s name.
2. Ask for identification from anyone seeking a donation.
3. Be careful of online requests for donations.
4. No tax deduction doesn’t mean the charity is not a legitimate one.
5. Find out more about how the charity says it uses donations.

Here’s the results for ‘FEBC Australia’^[6], with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?^[7].

1.  A search on the ACNC Register of charities for ‘FEBC Australia’ brings up a charity in the name Far East Broadcasting Co (Australia) (link added). This is because this charity has ‘FEBC Australia’ recorded as another name by which it is known^[8].

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2.  Nothing on the Register, the website or in the Annual Report 2017/18^[9] (same link for 2018/19 report) indicates that FEBC uses street or door-to-door collectors.

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3.  The Edge browser “web address begins with ‘https’”, and there is “a closed padlock symbol next to the web address in the address bar”, so the website is secure [the ACNC article above].

But on the giving page there is no mention of the security of your information.

Ministry comment: ‘Protection of funds and security is vitally important and covered in Privacy policy yet happy to look at that and seek advice if that should be further added to website.’

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4.  The Australian Business Register (linked from FEBC’s ACNC Register record), says that the charity is not entitled to receive tax deductible gifts.

Although this is supported by the initial page from the ‘Donate’ button, it is contradicted by this invitation on the next page:

The reconciliation lies in the fact that FEBC controls other entities, and these don’t have their own website. Two of these entities (there are three) have deductible gift recipient (DGR) status: FEBC Overseas Fund and FEBC Relief.

The Paypal button above leads to a form for FEBC Relief. There is no online donation facility for the other charity that has DGR status. In fact, it is not mentioned on the website^[10].

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REMINDER: Green is this year, black the previous review.

5.  The use of your donations

Objects / Mission

Nothing on the website, nor in the Annual Report 2017-2018^[11] (same link for 2018/19 report).

Ministry comment: ‘FEBC AU mission same as whole global assoc. – to inspire people to follow Jesus Christ … This indeed happens even here in Australia as people engage their hearts in God’s mission for the world, as they pray and give… it inspires them to walk closer, following Jesus. Our Christian life is a journey and we want to inspire people to follow Jesus in all of life. Bringing wholeness of life to people in disadvantaged communities allows this as does so many of our projects.’ 

The Constitution has ‘Company Objects’ but they are objects that are not pursued directly by FEBC, but indirectly by funding the work of overseas FEBC organisations^[12].

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Strategies/Activities

From the (Group) Financial Report 2018^[13] (no change in 2019):

That is, a fundraiser for (unspecified) ‘International Programs’ (see below)^[14].

The Annual Report 2017-2018 expands on this:

In the Annual Report 2018-2019, the last sentence, ‘Provides mentoring, partnership and prayer’, has been replaced with ‘Maintains good governance and compliance with accountability.’

To see the activities that are funded overseas by the donations passed on by FEBC, read the Annual Report 2017-2018 Annual Report 2018-2019.

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Sharing the Gospel?^[15]

No, not directly – FEBC funds the sharing of the Gospel overseas.

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Locations

FEBC operates in Australia, per the ACNC Register, in every State.

FEBC lists 14 countries on the Register^[16]. In the Annual Report 2017-2018 Annual Report 2018-2019 it lists 17^[17] 19 to which it says it send funds^[18] (FEBC globally operates in ‘49+’ countries).

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Giving options (link corrected)

Other than deductible versus non-deductible, none.

Correction: It is possible to specify the country to which you would like the gift allocated.

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Donations revenue

Ministry comment: ‘Finances in place are audited, approved by ACNC, the Board, and are above reproach – maximising ministry impact.’

Reviewer response: Financial statement audits have well-known limitations.  No, finances are not approved by the ACNC – they don’t have the resources to check all submissions, let alone your internal procedures. There are many examples of Board’s approving things that later turned out to be wrong, unwise or capable of improvement.

The audited account of how donations are used is the (Group) Financial Report 2018 2019 on the ACNC Register. Although the Report is entitled ‘Far East Broadcasting Co (Australia) and Controlled Entities’, it is not clear that it contains consolidated financial statements (‘consolidated’ is not mentioned). The AIS that accompanied the Report said that the Report was not ‘consolidated with more than one entity’. No longer the case in the AIS 2019.

From the Report:

2019:

REMINDER: Green is this year, black the previous review.

So, no distinction between tax-deductible and non-tax-deductible money.

FEBC also receives revenue from the investment of past revenue, including donations, not used on spreading the Gospel. At 30 June 2018, it held $2.50 million in financial assets^[19] $2.70 million in 2019. No reason is given in the Financial Report for holding this much unspent when donations and bequests are normally around $1.6 million p.a.

The answer is in the annual reports of two of its leaders (in the Annual Report 2017-2018). FEBC says that it is a ‘faith mission’:

The Chairman counters this a little, saying that they have decided that this strategy poses an unacceptable risk:

Neither of the above two explanation are in 2018-2019 report.

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Cash spent

This is the only information about where the cash went on operating activities:

^[20]

2019:

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Resources consumed (i.e. accrual)

The accrual section of the Report is more helpful:

2019:

What’s in each of these items is not given in the Report – nor in the Annual Report 2017-2018.

The employee benefits expense is not disclosed, but the Group AIS 2018 2019 gives ‘Employee expenses’ as $372K $347K, an average of $74K $69K per full-time equivalent employee.

According to the ACNC Register, the people responsible for the reporting decision (and all other decisions), the ‘Responsible People’^[21], are

David McDonald

Kevin Keegan

Kuet Quen Ho

Larry Wayne Podmore

Peter Ronald Elliott, and

Rodney Tant^[22]

The people responsible for the Financial Report 2019 were all those above except for Keegan and Elliott.

FEBC lost three of its seven directors during the year, and didn’t replace them.

Gone from the board since the Annual Report 2017-2018 are Ken Kingwell and Vanessa Hall. Kevin Keegan, the National Director of FEBC, is an addition^[23].

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REMINDER: Green is this year, black the previous review.

Community education

There is no explanation for the substantial spending on this item. What is the distinction between this and ‘fundraising’?

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Destination of the ‘Funds to International Programs’

There is no disclosure in the Financial Report 2018 2019 of the geographical destination of your funds. The Annual Report 2017-2018 (page 18) gives the percentage of an unspecified total for each of 17 countries plus ‘Shortwave broadcasts’.

The 2018-2019 annual report has percentage ‘Disbursements by Country’ for 18 countries for a total of $1.06 million ‘funding and supporting international programs’ [page 31].

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How they ensured that the money was used for the purpose for which you gave it

There is no information on this.

Ministry comment: ‘All money is used effectively for the purposes given – and this is further reinforced by physical monitoring visits to ensure good governance in place and outcomes achieved.’

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Impact^[24]

There is no information on the impact of the Australian dollars.

Although there are many accounts of outcomes for FEBC globally on the website, no systematic study of the impact of FEBC was found.

Please contact me if you need a more in-depth review.

1. Link added by me. ↑
2. Emphasis in original. ↑
3. Under the name ‘Far East Broadcasting Co Australia’. ↑
4. https://missionsinterlink.org.au/about/ ↑
5. 1. FEBC says (link updated) that

   Number 8 of the CMA Standards Council’s ‘Nine Principles of Ministry Accountability‘ is ‘The organisation must be transparent and accountable to its stakeholders’. One of the nine ‘Standards’ that ‘fall under’ that principle is about openness and responsiveness to feedback:

   

   With Missions Interlink, both Members and Associates have to accept a set of standards, the introduction to which includes this statement:

   ↑

6. See here for my last review. ↑
7. 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? [A section in the article, Donating and Volunteering]. ↑
8. It has it registered as a business name (see www.asic.gov.au). ↑
9. The ACNC provides for an annual report to be lodged on the Register, but FEBC has chosen not to do this. ↑
10. Not only this, but the announcement of FEBC Relief Limited in 2017, read as if the existing DGR entity, FEBC Overseas Fund, didn’t exist; Note 17 in the Financial Report – a report that covers all four entities – shows that FEBC Overseas Aid (sic) Fund received $42,803 in donations in 2017-18 (zero in 2019). ↑
11. The mission referred to in this report is the mission of FEBC International. For example, ↑
12. ↑
13. Some of the dates on the ACNC Register are incorrect: FEBC did not last report on 8 February 2017, but on 11 March 2019 (as part of the Group) This was the last time it reported as an individual entity; FEBC next report is not due 31 March 2021, but by 31 March 2020 (as part of the Group) This date is no longer shown. There are similar mistakes for the other two charities in the Group. ↑
14. FEBC’s information on the ACNC Register about activities is a combination of what FEBC does and what the overseas arms of FEBC does. The Group entry has the same mistake. ↑
15. ‘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]. ↑
16. As the Group is the larger of the two entities, its listing of 13 must be incorrect. ↑
17. It appears from page 6 of the Annual Report 2017-2018 that for 16 of these, FEBC sends funds under a three-year funding agreement. ↑
18. On the Register, five are missing and two are additional (not checked). ↑
19. The disclosure of these assets does not comply with the Accounting Standards. ↑
20. Although this level of disclosure may be compliant with the letter of the applicable Accounting Standard ( AASB 107), it is not consistent with either the intent of the Standard and paragraphs 14 and 19, or what is reasonable to expect from a major Christ-led charity that is reporting a true and fair view. ↑
21. For a public company like FEBC, the members, if sufficient in number, and independent of management, can be a source of accountability on the board (and therefore management). FEBC has 47 44 members [(Group) Financial Report 2018 2019]. ↑
22. For the three without links, see page 20 of the Annual Report 2017-2018. ↑
23. He is described as the ‘Public Officer’, the company’s representative to the Australian Tax Office, and one of the other directors is the Secretary, so is Kevin really a member of the board? Although not shown as a director in the Directors’ Report [Financial Report 2019], he is still shown as a responsible person on the ACNC Register. ↑
24. Unfortunately, the ACNC appears to have removed this article: ↑