Global Development Group: charity review

This is a review in the series ‘Australian Council for International Development (ACFID) Members’. ACFID ‘is the peak body for Australian non government organisations (NGOs) involved in international development and humanitarian action.’ It requires Members to adhere to a Code of Conduct. ‘Global Development Group’ is one such Member.

COVID-19 – no general comment, but there are a couple of posts, like this one, about specific countries.

Donors

The name in the ACFID membership list links to the website for ‘Global Development Group’. Here they seek donations from the public.

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, and
5. Find out more about how the charity says it uses donations.

Here’s the results for ‘Global Development Group’, with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?^[1]

 1.  There’s a charity registered in the name ‘Global Development Group’ (GDG).

Even though it is a public company, it is registered with ASIC without the usual ‘Ltd’ or ‘Limited’ on the end of its name.

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2.  There is nothing to suggest that GDG raises funds door-to-door or in public places.

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3.  The web address begins with a closed padlock symbol, so the website is secure [the ACNC article above].

The page where you enter your credit card information says, ‘You are now on a secure web page where all your information is secure and confidential’, but the source of this security is not given.

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4.  GDG’s ABN record (via the ACNC Register record) says that it is entitled to receive tax-deductible gifts, both as a Public Benevolent Institution, and for its fund, Global Development Group Overseas Relief Fund.

The footer on the website says that ‘Donations $2 and over are tax deductible.’

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5.  The use of your donations

As context, read here what GDG does.

The audited account of how donations are used is the Financial Report 2019.  

For this report, directors have a choice between special purpose or general purpose reports. The requirements of the former are less onerous than the latter. Preparing special purpose reports means, among other things, that charities do not need to consolidate (produce a combined picture if they control over entities), and do not need to disclose related parties and transactions with related parties.

GDG’s auditor, Jason Croston, is the Managing Director of the firm SRJ Walker Wayland. He is a Fellow of Chartered Accountants Australia & New Zealand. This is what that body has to say about the choice between the two types of reports^[2]:

With a diverse range of donors all over Australia providing $29.0 million [Financial Report 2019], 18 employees [Annual Information Statement 2019], and projects in 37 countries [Annual Report 2019], it is hard to see how a special purpose report is the right choice. But that is the choice that the directors of GDG made.

And the auditor, a Chartered Accountant, agreed with them.

One of the implications of their choice is that you can ring GDG’s office and request that they prepare financial statements that answer the question or questions you have about the charity. I doubt you’ll succeed with that^[3].

The bottom line is that the accounts presented by the directors are not for you. In fact, they say that you don’t exist:

These were the directors who were responsible for the accounts:

David J Pearson

Geoffrey W Armstrong

Allan Benson

Trevor David Robertson

Samantha Crestani^[4]

The ACNC Register has the same five people as the current directors.

The use of your donations

If you are still willing to consider donating to GDG, here is how your donations were used:

Cash spent

A single line, for $30.3 million, is all you get^[5] (from the Statement of Cash Flows, with last year in the second column):

Resources consumed (i.e. accrual)

This, from the Statement of Profit or Loss and Other Comprehensive Income, is how the activities translated into expenses (with last year’s figures in the second column):

The Accounting Standard Presentation of Financial Statements^[6] requires that

This is supported by the requirements for GDG’s Notes to the Financial Statements^[7]:

Presenting just a single line for ‘Funds to overseas projects’, 94% of the expenses, is therefore not presenting what the directors say they have presented (Directors’ Declaration, Financial Report 2019), a ‘true and fair view’.

There is nothing in the Financial Report 2019 on how GDG ensures that (a) the money reaches the overseas organisation, and (b) it is used for the purposes given.

Impact

Nothing systematic on impact found.

Charity response

GDG says that it values feedback.

I sent a draft of this review to them on 24 March 2020. The Executive Director responded in a brief email on 30 March, implying that they did not have time to take up our invitation to suggest corrections or submit comments for publication.

1. 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?

   ↑

2. Enhancing Not-for-Profit Annual and Financial Reporting, March 2013, accessed from their website March 2020. ↑

3. The accounting profession says that you are therefore ‘potentially interested in the information provided in general purpose financial reports’. [From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au]. ↑

4. The directors are accountable to the members. The company had 91 members at year end [Directors’ Report]. ↑

5. I do not believe that this minimal disclosure is consistent with the applicable Accounting Standard. ↑

6. AASB 101, www.aasb.gov.au. ↑

7. Also from AASB 101. ↑