Archived: Heart for Kids Australia Ltd: charity review

This is a charity review of Heart for Kids Australia Ltd (HFK), an organisation that is an Associate member of Missions Interlink and which has an online invitation to donate.

For the previous review, see here.

Are they responsive to feedback?

• At the bottom of the ‘About’ and ‘Leadership’ pages (and therefore far from prominent on the website), there is an invitation to ask questions, give feedback, and make a complaint:
  • If you have any questions, feedback or complaint regarding our service or this website you may contact us via the contact form.
• Accountability is not mentioned on the website. Transparency is though:

• I sent them a draft of this review. They responded by email. Some changes have been made and a comment by them has been inserted as a result.

Is HFK registered?

• Yes, as a charity.
• HFK is a public company, a company limited by guarantee.
  • It does not have the provisions in its constitution to omit ‘Ltd/Limited’ at the end of its name.
  • Therefore, because it does not have Heart for Kids registered as a business name, it should be using its full name with the public. Not as on its website and Facebook.
• There’s more to HFK than is disclosed on the ACNC Register.
  • First, another charity, Chinaheart International Incorporated (CI), shares two of the three directors of HFK, and an office. One controls the other, but which way it is doesn’t matter: CI’s web address on the ACNC Register leads to HFK’s website, and they write as if they were one organization; e.g. on that website they say

• • Second, CI itself CI itself has a wholly-owned charity, ChinaHeart International Aid Fund (CI Aid Fund).
• Here’s their explanation of the connection between the three charities:
  • Heart For Kids was born out of ChinaHeart International. When the work grew to serve children in other countries we felt a new umbrella orgainsation would serve the ministry better and give a clear direction as to who we are. The work previously done under the name of ChinaHeart and the ChinaHeart International Aid Fund is now done under the one name of Heart For Kids.
    • • Why then are they reporting separately? (HFK has yet to take advantage of the ACNC’s group reporting concessions.)
• HFK is also connected with a business, LST Group (a business name belonging to The Trustee for the David Ryan Trust).
• HFK holds a fundraising licence in its home state. The absence of a licence in the other states that have a licensing regime for registered charities is only an issue if one or more of those states regard raising money online as ‘fundraising’.

What does HFK do?

• See here.
• Or the succinct version, from the Annual Information Statement (AIS) 2017:
  • Operating centres for fostering & training, leading volunteer teams to orphanages, scholarships help ensure children do not leave school due to financial causes.

Do they share the Gospel?

• No

What impact are they having?

• No information found.

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

• This chart is under a heading ‘What reaches the children’:

• It didn’t turn out this way this year: grants made were only 76% of the expenses.

Do they pay their directors?

• This is not prohibited by the constitution.
• There is insufficient financial disclosure to check.

Can you get a tax deduction?

• Yes

Is their online giving secure?

• eWay and PayPal are used, so yes.

Where were the (net) donations sent?

• The distribution of the grants between the three countries is shown here.
• And within each country, here.
  • These two charts are not part of audited accounts, and are not for the financial year, but updated quarterly.

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

• It’s a bit confusing, but it’s all on this page.
• Which of the three charities is receiving the donation in each case is not disclosed.
  • Ministry comment: ‘We don’t receive gifts in the name of [CI].’
    • This is not what CI’s AIS 2017 says – it shows a figure for ‘Donations and bequests’.
    • CI Aid Fund also received ‘Donations and bequests’ in the 2017 year.
    • Both charities said ‘No’ to the question ‘Will the charity change or introduce any activities in the 2018 period’ in their AIS 2017, suggested that there was no intention of not continuing to receive donations and bequests.

Is their reporting up-to-date?

• Yes (seven months after their year-end, a week before the deadline, the same time as last year).

Does their reporting comply with the regulator’s requirements?

• AIS 2017 (HFK only): Not quite
  • Why ‘Don’t Know’ for the NDIS questions?
  • Why no ‘online’ under fundraising?
• Financial Report 2017 (HFK only): Yes
  • HFK is $12K under the threshold for reporting, and, despite the commitment to transparency (see above), chose not to submit a Report voluntarily.
  • However, their Associate membership of Missions Interlink requires them to “have available for [their] members and supporters a clear and appropriate financial statement which has been approved by its auditor.”  So just ask.
  • Unfortunately for transparency, even if HFK start reporting as a group, so long as each of the charities remains ‘Small’, then a report still won’t be required.

What financial situation was shown in that Report?

• NA
• But from the AIS 2017 – remembering that this is a report for only one of the three charities –
  • $238K income, almost entirely from donations.
  • The one part-time employee cost $5K.
  • ‘Grants and donations made for use outside Australia’ totaled $115K.
  • The ‘bottom line’ was a surplus of $81K.

What did the auditor say about the last financial statements?

• An audit should have been performed, but despite the commitment to transparency, there is no record of one on the website.

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

• Yes

Who are the people controlling the organisation?

• The ‘Leadership Team & Board’ is shown on the website, but it doesn’t definitely identify who is on the board^[1].
• From ‘Responsible Persons’ on the ACNC Register:
  • Poay Lee
  • David Ryan
  • Adam Tedja

To whom is HFK accountable?

• This graphic appears in the website footer:

• HFK is an Associate member of Missions Interlink, an organization that has an accountability regime.
  • For one opinion on the strength of that accountability, see the section Activities in this review.
• The other logo is the ACNC’s ‘charity tick’. HFK is accountable to the ACNC.
  • The tick means that HFK is registered as a charity, its AIS is not overdue, and the ACNC has not taken any compliance action against it.
    • But no more than this.
    • The accountability provided by the ACNC is generally at a high-level, and mostly not particularly timely.
• As a company, HFK is still accountable for some things to ASIC.

1. On the ‘leadership’ page on the website, HFK use, illegally, the Commonwealth Coat of Arms and the ACNC logo, to represent the governance of HFK. ↑