Archived: Gateway Baptist Church: mini-charity review

Mini-charity review of Gateway Baptist Church (GBC), an organisation that seeks donations online, is an ‘Associated Organisation’ of Missions Interlink, and is accredited with the CMA Standards Council (a founding member). (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

For the previous review, see here.

Is it responsive to feedback?

• GBC has a ‘Complaints & Feedback Policy’, a requirement of its partnership with the CMA Standards Council. One of the ‘five key elements’ of this policy is ‘Principles’:
  • ‘Our complaints and feedback system is modelled on biblical principles, including humility, fairness, accessibility, responsiveness, efficiency and integration.’
• I sent them a draft of this review. Like last year, they…did not respond.

Is GBC registered?

• As a charity, yes.
  • I can’t see a a ‘not-for-profit’ clause in the constitution. If this is the case, then this is unusual, and surprising. Every registered charity should have one, and it is an explicit requirement of the CMA Standards Council.
  • The registration is in the name Gateway Baptist Church Ltd because it is permitted to trade without ‘Limited/’Ltd’ at the end of its name.
  • Not to be confused with Gateway Baptist Church (GBC-old), the charity that was the church before GBC took it over. GBC’s first object in its constitution is
    • To incorporate and continue the ministry and activities of the unincorporated church known as Gateway Baptist Church ABN 25 025 137 207 and to take over its assets and undertakings on and from the date of incorporation hereof.
      • GBC was incorporated on 11 August 2015, but did not begin trading until 1 May 2016 (Directors’ report).
  • Also, not to be confused with Gateway Baptist Church And Community Centre.
    • Especially as GBC has a fund called the Gateway Community Fund (see below).
• GBC has two other Australian wholly-owned subsidiaries:
  • the charity Bloom Asia Inc. (BAInc) (registered in 2012)
  • the charity Bloom Asia Ltd (BALtd) (registered in June 2016)
    • Because GBC still has not taken advantage of the ACNC’s group reporting concessions, these charities, and GBC-old, must report separately.
• Other registrations:
  • As a public company, a company limited by guarantee.
  • Only one of the four charities holds a business name: BAInc has Bloom Creations Australia.
  • GBC does not have a fundraising licence in the state, per the ACNC Register, in which it operates^[1].
  • BALtd: licensed to fundraise only in Queensland.
  • BAInc: no fundraising licences.
  • GBC-old: no fundraising licences.

What does it do?

• GBC: other than obviously being a church, there’s no direct statement saying what it does; its activities are shown here.
• GBC-old: replaced by GBC.
• BAInc: no website; its Annual Information Statement 2016 (AIS 2016) says the same as last year: ‘As a Christian ministry aligned with Gateway Baptist Church, raised funds and awareness of charity work in Cambodia’.
  • There are no countries listed under ‘Where the Charity Operates’ on the ACNC Register.
• BALtd: See here.

Do they share the Gospel?^[2]

• GBC: Yes
• GBC-old: NA (replaced by GBC).
• BAInc: No information available.
• BALtd: No mention of the Gospel, Jesus or Christ on the website; tax deductibility (see below) would suggest that it doesn’t share the Gospel.

What impact are they having?

• GBC:
  • Nothing systematic found. (The Directors’ Report, under ‘Key performance measures’, reports 40 baptisms.)
  • The terms of GBC’s accreditation with the CMA Standards Council require it to perform regular program evaluations. There is no mention of evaluation on the website.
• GBC-old: No information found.
• BAInc: No information found.
• BALtd: No information found.

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

• GBC: This is not disclosed, and the classification of the expenses does not permit an estimate.
• GBC-old: Because it is a ‘basic religious charity’, no financial information has to be submitted to the ACNC.
• BAInc: All expenses were classified as ‘Other expenses/payments’ in the AIS 2016 (no Financial Report 2016 required because of its size).
• BALtd: Their ‘effective date’ of registration (on the ACNC Register) is 28 June 2016. With a 31 December year-end, the ACNC does not require such a charity to report until the following year.

Do they pay their board members?

• The constitution does not prohibit such payments.
  • They are, however, prohibited under the terms of GBC’s accreditation with the CMA Standards Council [Standard 3.7].
• Whether they were made is not disclosed.

Can you get a tax deduction?

• GBC: No
• GBC-old: NA (replaced by GBC).
• BAInc: No
• BALtd: No
• Both GBC and BALtd are able to offer tax-deductibility for ‘Bloom’ because they are collecting for a project run by Global Development Group, a secular overseas aid and development organisation.
• But nowhere is there an explanation for their ability to offer tax-deductibility for an entity that doesn’t even have an ABN, Gateway Community Fund.
  • This contravenes Standard 9.1 of the CMA Standards Council Standards.

Is their online giving secure?

• GBC: Online giving is offered for five of the six choices. All five use PayPal, so yes, giving is secure.
• GBC-old: NA
• BAInc: NA – not offered.
• BALtd: PayPal is used, so yes.

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

• GBC:
  • ‘General giving – Mackenzie campus’
  • ‘General giving – Ormeau Campus’
  • ‘Gateway Beyond’
  • ‘Bloom (tax-deductible)’
  • ‘Gateway Community Fund (tax-deductible)’
  • ‘Call to Build Giving’ (not an online option)
• GBC-old: NA
• BAInc: No website
• BALtd:
  • ‘Donate (Without a Tax Receipt)’
  • ‘Donate (AUS – Recurring Gift) (tax-deductible)
  • ‘Donate (AUS – Single Gift) (tax-deductible)
  • ‘Donate (With Tax Receipt USA)’

Is their reporting up-to-date?

• GBC: Yes (four and a half months after their year-end)
• GBC-old: Yes (four and a half months after their year-end, a month earlier than last year).
• BAInc: Yes (six months after their year-end, a week later than last year).
• BALtd: Yes (none has been required yet).

Does their reporting comply with the regulator’s requirements?

• GBC:
  • AIS 2016: No.
    • No activities or outcomes are disclosed.
    • ‘Other income’ does not match the financial statement.
    • Surely for a large church ‘Grants and donations…’ is not zero?
  • Financial Report 2016: Questionable
    • GBC acknowledge that GBC-old (the ‘Unincorporated Church’) and BALtd are wholly-owned subsidiaries (Not 16), so why aren’t they consolidated, i.e., included with the GBC figures?
    • Why no mention of the other subsidiary, BLInc?
    • Working capital – current assets less current liabilities – is negative by $235K, yet the directors make no comment on this threat to the going concern assumption.
    • ‘Building fund donations’ are just as much donations as the others. Classifying them as ‘Other income’ therefore understates revenue $403 K.
    • ‘Donation of assets from unincorporated church’ is, as they state elsewhere, part of revenue. It should therefore be included in revenue.
    • Similarly with ‘Finance income’.
    • Note 8 shows the entire net assets received from GBC-old as a non-cash item. How does this fit with the fact that $1.26 m cash is shown in the Statement of cash flows as ‘Donation of cash by unincorporated Church’?
    • A mixed classification of expenses is confusing. (That’s why it is not permitted.)
    • ‘Missions support expenses’, 21% of the total, is unexplained.
    • They say that the receipt of $20 m odd net assets from another entity during the year is a not a ‘significant change’ to GBC’s ‘state of affairs’ (paragraph 5 of the Directors’ Report). I disagree.
    • Having a line item ‘Operating expenses’, for 9% of the total, in a list of operating expenses, says nothing about the nature of that expense.
    • The product that was sold, generating $300K, is not disclosed.
    • The entire charity is a ministry, so what is ‘Ministry income’?
    • How was it that ‘Interest income’ was exactly $8K?
  • Even if the above issues don’t render the Financial Report non-compliant with ACNC’s requirement for ‘a true and fair view’, GBC’s partnership with the CMA Standards Council commits it to the transparency and accountability implied in 2 Corinthians 8:20, and that makes the issues relevant.
  • Because of the above issues, it is questionable whether GBC’s 2016 financial report is compliant with the CMA Standards Council Standards.
• GBC-old:
  • AIS 2016: No.
    • Neither activities nor outcomes are disclosed.
    • It says that nothing will change in 2017, but if it doesn’t cease to exist it will be nothing like the organization it was up until May 2016.
  • Financial Report 2016: As a ‘basic religious charity’, they weren’t required to submit one. Nor include financial information in the AIS.
• BAInc:
  • AIS 2016: Not quite – no outcomes are given, and the business name is missing.
  • Financial Report 2016: NA – none required (because of their small size).
• BALtd:
  • AIS 2016: NA – because they only started in June 2016, not required yet.
  • Financial Report 2016: NA – as for the AIS.

What financial situation was shown in that Report?

• GBC:
  • Working capital is negative. There is only 80 cents of current assets for every dollar of current liabilities.
  • Long-term financial structure, because of the land and buildings inherited from GBC-old, is sound.
• GBC-old: NA
• BAInc: NA. The AIS 2016 shows a surplus of $10K on $20K turnover, and assets and equity of $22K.
• BALtd: NA

What did the auditor say about the last financial statements?

• GBC:
  • The auditor, Daniel Gill, for Pilot Partners, gave a ‘clean’ opinion.
    • Not critical to the opinion, but relevant to your confidence in it:
      • He defines the information – ‘the other information’ – that he did not audit by reference to the ‘Company’s annual report’. But there is no annual report.
      • He incorrectly says that GBC’s reporting is defined by the Corporations Act 2001. It should be the ACNC Act.
  • Before you decide how much comfort to take from this opinion
    • Read the ‘Financial Report 2016’ section, above, and
    • Read about audit opinions here and here.
• GBC-old: NA
• BAInc: NA
• BALtd: NA

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

• GBC: No
  • No countries shown under ‘Where the Charity Operates’.
• GBC-old: No
  • No countries shown under ‘Where the Charity Operates’.
  • ‘Phone’ and ‘Website’ are blank, but the ACNC says these are not compulsory.
• BAInc: No
  • An ‘Entity Subtype’ has not been selected.
  • The business name is missing.
  • ‘Email’, ‘Phone’, ‘Website’ are blank, but the ACNC says these are not compulsory.
• BALtd: Almost – the Secretary has been included as a ‘responsible person’.

Where were your (net) donations sent?

• NA

Who are the people controlling the organisation?

• GBC:
  • The ‘Board of Elders’ is still not shown on the website, but
  • These are the people declared to be ‘responsible persons’ (on the ACNC Register):
    • David Angell
    • Paul Bakes
      • Is it this Paul Bakes?
    • Anne Cock
      • Is it this Anne Cock?
    • Megan Cocker
    • Jason Elsmore
    • Matthew Gray
    • Joshua Hanna
    • Derek Peters (a GBC executive)
    • Andrew Ross
    • Trevor Shinners
      • Is it this Trevor Shinners?
  • The board is responsible to the members. There were 590 members at 31 December 2016.
• GBC-old:
  • Not shown on the GBC website.
  • The same people as for GBC are shown as ‘responsible persons’ (on the ACNC Register):
• BAInc: From the ACNC Register:
  • David Angell (see above)
  • Derek Peters (see above)
  • Glenn Valentine
    • Is it this Glenn Valentine?
• BALtd:
  • The board is shown here.
  • Leona Conwell is missing compared to those declared to be ‘responsible persons’ (on the ACNC Register):
    • Leona Conwell
    • Scott Dale
      • Is it this Scott Dale?
    • Murray Larwill (a BALtd executive)
    • Ruth Larwill
    • Peter Page
    • Michael Petersen
    • Stephen Stathis
    • Ian Watts

To whom is the charity accountable?

• GBC:
  • As a charity, to the ACNC.
  • As an organisation accredited with them, to the CMA Standards Council.
    • Although it hasn’t done so yet, it is entitled to display their seal. For this privilege it must abide by the Council’s  Principles and Standards of Responsible Stewardship.
  • To Missions Interlink via their Associate membership.
    • For one opinion on the strength of that accountability, see the section Activities in this review.
  • As a company, to ASIC.
• GBC-old: To the Queensland associations regulator.
• BAInc: To the ACNC and the Queensland associations regulator.
• BALtd: To the ACNC, and to the companies’ regulator (ASIC).

1. The law in this area is not straightforward – is an internet invitation ‘fundraising’ for instance? – and advice varies, so check with the charity before drawing any conclusions. ↑
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. ↑