Archived: IJM Australia Ltd: charity review

A charity review of IJM Australia Ltd (IJMA), an organisation that seeks donations online. A review in response to a question to me by a potential supporter of IJMA. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(For the previous review, see here.)

Are they responsive to feedback?

• In the ‘2016 Annual Review’ they say that ‘We value your feedback and strive to address any complaints promptly. You can contact us in the following ways:…’ (page 26).
• I sent them a draft of this review. Like last year, they responded with comments. Their general comment is immediately below, the others in the section to which they relate.
  • We are more than happy to discuss the details of our work, operations, financial and impact reports.
    We’re currently preparing for our 2017 audit and appreciate your review and the opportunity to respond and provide further detail. Your insights are helpful not only as we prepare for audit but also as we work to continuously improve our operations and the information available to existing and potential supporters.

If you or your client want to hear more about our work, we also have our Australian Prayer Gathering coming up in Sydney on March 3, where we will be profiling and praying for IJM’s work globally. 

Please let me know if there is any more information we can provide.

Is IJMA registered?

• As a charity, yes.
  • IJMA is a public benevolent institution.
• Not to be confused with www.ijmaustralia.com.au, International Junior Miss.
• IJMA is a public company, a company limited by guarantee.
  • It has the provisions in its constitution to allow it to omit ‘Ltd’/‘Limited’ from the end of its name.
• Contrary to what is implied on the ACNC Register, IJMA has not registered the other name that it uses, International Justice Mission Australia.
  • Ministry comment: ‘We are currently looking at our registered names with the ABN register and ASIC and will correct any inconsistencies.’
• IJMA operates – according to the ACNC Register – throughout Australia and in India, Kenya, Philippines, and Uganda.
• It is registered to fundraise in all states that have a licensing regime.

What do they do?

• Generally: The section ‘Objectives’ in the constitution begins
  • IJM Australia is established to work from a basis of Christian belief and values for the charitable purpose of providing relief to people suffering from poverty, distress and helplessness within countries declared by the Minister for Foreign Affairs to be developing countries under section 30-85 of the Tax Act….
• More specifically: IJMA is a partner office of IJM (‘IJM Global’). IJM is
  • working to end modern-day slavery, human trafficking and other forms of violence against the poor by rescuing and restoring victims, restraining perpetrators, and transforming broken public justice systems.
• And in 2016: not what the website says – that’s about IJM globally – but what is written in the ‘2016 Annual Review’:
  • In 2016, IJM Australia partnered with three offices in the field supporting programs to rescue victims of slavery and violence, bring criminals to justice, restore survivors, and strengthen justice systems. Total funding provided by IJM Australia to overseas programs was $458,498.

In Cebu, the Philippines, IJM shifted its focus from more traditional forms of commercial sexual exploitation of children to online sexual exploitation of children (cybersex trafficking) – a growing and devastating form of modern day slavery.

With the support of IJM Australia, IJM Cebu rescued 42 victims from sex trafficking, and secured the convictions of 23 perpetrators. IJM Cebu lawyers and The Inter Agency Council Against Trafficking prosecutor also successfully advocated for the use of plea bargaining in cybersex trafficking cases through 2016, securing convictions without victims (children) needing to testify against their perpetrators.

In Kenya, IJM Australia provided support to IJM’s Police Abuse of Power system reform program which works to seek justice for those who have suffered at the hands of authorities who should protect them. Many of the planned activities were placed on hold in June 2016 following the murders of IJM Kenya investigator Willie Kimani, IJM client Josephat Mwenda and driver Joseph Muiruri, as the team focused on responding to the tragedy and the trial of the perpetrators that began shortly afterwards.

Following the success of the trial advocacy training in Uganda in 2015, IJM Australia worked again with IJM Kampala to design and implement a trial advocacy training program for 30 Ugandan Resident State Attorneys. To facilitate the training, IJM Australia recruited three senior members of the Victorian Supreme Court, NSW Bar and Victorian Bar to run four consecutive days of teaching sessions. The training was aimed at enhancing the technical capacity of the Ugandan Attorneys (including trial preparation, advocacy and case management) and supporting appropriate sentencing in property grabbing cases. The training was a great success and will be run again in August 2017.

In Australia, we continued engaging with our faithful supporters in a number of different activities:

IJM AUSTRALIAN PRAYER GATHERING…

TIME FOR JUSTICE CAMPAIGN…

SPEAKING ENGAGEMENTS & MEDIA

• In the Annual Information Statement (AIS) 2017 they said that they planned to make the following changes in 2017:
  • In 2017 IJM Australia expects to provide increased support to combat bonded labour slavery in India. In 2017 we have also expanded our national training programs to mobilise more Australians to seek justice for the poor, and have increased our advocacy efforts and working with government and other agencies to address the demand side of cybersex trafficking here in Australia.
  • Ministry comment: ‘While our 2017 ACNC reporting isn’t due yet, we can joyfully confirm that IJM Australia did achieve these goals – we substantially increased our financial support to combatting bonded labour slavery in India in 2017, and also contributed government initiatives to address trafficking and Australian legislation concerning the online sexual exploitation of children/cybersex trafficking of children.  This work will be profiled in our 2017 Annual Report which will be released soon and also included in our next ACNC AIS.’
• The register of Victorian licensed fundraising licences says that GoFundraise Pty Ltd and Everyday Hero Pty Ltd are the ‘Commercial fundraisers working with the principal fundraiser’. But there are more: Benojo and mycause.
  • Ministry comment: ‘We have referred back to our last annual return paperwork submitted and we did disclose both Benojo and MyCause as platforms we use in two separate areas of the return form to CAV. It appears that these changes weren’t updated on the CAV site.   We have contacted CAV to confirm this and the changes should be reflected soon.’
  • They do not disclose whether they use street collectors
    • Ministry comment:
• The format of the Statement of Income and Expenditure and Other Comprehensive Income, plus IJM’s ‘Objectives’ (see above), suggest that it is seeking Australian Council for International Development (acfid.asn.au) membership (and government overseas aid grants).

Does they share the Gospel?^[1]

• No.
• IJMA does not have ‘Advancing Religion’ as an ‘Entity Subtype’ on the ACNC Register.

What impact are they having?

• There is no information on the impact of IJMA, that is, the Australian organization.
  • Ministry response: ‘IJM Australia is part of the global organisation and as such where IJM Australia contributes directly to financially support the work of IJM teams, for example in the Philippines or Kenya, then we have contributed to the outcomes of that work. The programs and activities detailed in the ACNC AIS under the activities and outcomes also speak to the programs specifically led or delivered by IJM Australia, such as the training of 30 Ugandan attorneys to more effectively address crimes of property grabbing from vulnerable widows, thereby contributing to the strengthening of the local justice system to better protect the poor from violence.  See also notes above regarding the Quarterly Impact reports we are currently developing for donors.’
• The website has a presentation of some statistics showing that ‘justice system transformation’ is effective. This involves the efforts of more than the IJM organization though.
• An external evaluation of the program in the Philippines validated IJM’s theory of change.
  • To see the thinking behind what IJM does (and therefore what you fund), read The Locust Effect, by IJM founder and President Gary Haugen.
• For IJM’s impact, see GuideStar’s Charting Impact Report.

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

• If we define impact delivery as ‘Funds to international programs’, then 62% of the expenses are ‘administration’^[2].

Do they pay their board members?

• Such payments are prohibited by the constitution.
• There is insufficient disclosure of the expenses to check for a payment.
  • Ministry comment: ‘IJM Board Members are volunteers and do not receive sitting fees for their services on the Board.’

Can you get a tax deduction?

• Yes

Is their online giving secure?

• If you chose to give via credit card security is not mentioned.
  • Ministry comment: ‘Our website and online giving forms are secured with SSL technology compliant with PCI requirements and the Secure Padlock is displayed in the url bar.  Our website also provides the ability to give via PayPal which also maintains PCI compliance.’

Is their reporting up-to-date?

• Yes (but on the last day allowed, six months after their year-end; one day 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 end that is now over 13 months ago.
  • Ministry comment: ‘Our reporting year is January 1 – December 31 (not July 1 – June 30), and as such the audited financials will be uploaded to our website, ACNC and also provided to relevant state departments overseeing fundraising with our annual returns once they are complete.’

Does their reporting comply with the regulator’s requirements?

• AIS 2017: No.
  • Two names under ‘Other names…’ are not registered names.
  • ‘Other Income….’ does not match the figure in the financial statements.
  • The financial statements say that all the grants were ‘made for use outside Australia’, not some in Australia, and some outside.
  • Ministry comment: ‘Programs supported inside and outside Australia have been captured in both the audited financials and in the AIS financial report, however we will talk to the auditors to look at how we can increase the consistency across the two.’
  • No outcomes are given.
  • Ministry comment: ‘See notes under impacts above. We are also in the process of developing more detailed quarterly Impact Reports for donors which are likely to be implemented in 2018.’
• Financial Report 2017: No
  • For an organization that operates all over Australia and four countries overseas, has a professional staff of 12 and 70 volunteers, seeks donations on multiple public platforms, and receives $921K in donations, special purpose financial statements do not give the required true and fair view.
    • Ministry comment: ‘We are looking to move to General Purpose statements as we grow.’
  • In addition
    • there is no Note on related parties (an ACNC expectation).
      • Ministry comment: ‘We will raise this question with the auditors for the 2017 audit. Related party information was submitted to the ACNC in AIS reporting.’
    • the significant revenue item, ‘Seed Funding’, is not explained.
      • Ministry comment: ‘Seed Funding was provided to IJM Australia by IJM’s global headquarters to support the establishment of the Australian operations.’
      • The ‘2016 Annual Review’ identifies it as a donation to IJMA from IJM. Why then is it not classified as a donation?
    • there is a mixed classification of expenses
    • some of the Notes that should be included, even in special purpose statements, are missing.
      • Ministry comment: ‘We will raise this question with our auditors for review.’

What financial situation was shown by that Report?

• Last year’s result of 12% of revenue dropped to only 1% this year.
• Employee expenses are 31% of expenses.
  • Based on the full-time equivalent figure in the ‘2016 Annual Review’, the average remuneration is $69K.
• Funding from IJMA (‘Seed Funding’) decreased from 375K to 245K, and will be zero in 2018 [2016 Annual Review].
• No obvious concerns with the financial structure.

What did the auditor say about the financial statements?

• The auditor, Jeffrey Tulk, for Saward Dawson, gave a ‘clean’ opinion.
• Before you conclude on how much comfort you should take from this opinion, please
  • read about the meaning of ‘clean’ here and here, and
  • re-read the section ‘Financial Report 2017’. (To do the audit, Jeffrey had to be comfortable with the directors’ decision to not produce general purpose financial statements.)

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

• Not quite – ‘General community in Australia’ is not correct as ‘Who the Charity Benefits’.
  • If by ‘Other Name(s)’, the ACNC means trading and business names, then the two that IJMA have here don’t fit the bill.

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

• None
  • Ministry comment: ‘Donations given online are directed to the area of greatest need, however IJM Australia is happy to speak to donors interested in supporting particular areas of IJM’s global work, for example supporting a particular casework type, the work of a specific field office, or providing support for specific operational or other expenses.’

Where were your (net) donations sent?

• Other than ‘overseas’ and ‘Australia’, this is not disclosed in the financial statements^[3].
  • See page 14 in the 2016 Annual Review for some basic information.

Who are the people controlling the organisation?

• The website says these people.
• The ACNC Register (under ‘Responsible Persons’) says the same except it adds Eric Boon:
  • Adam Achterstraat
  • Eric Boon
  • Michelle England
  • Andrew Hilson
  • Joanna Mansfield
  • Mark Leach
  • Melissa Russell
• The directors are responsible to the members of the association. At year-end there were 15 members (down from 17 two years ago). Directors must be members, so there is limited accountability here.

To whom are IJMA accountable?

• On the webpage ‘Financials’ (and in the ‘2016 Annual Review’, under the heading ‘ACCOUNTABILITY’), IJMA say that
  • IJMA Australia adheres to the highest standards of accountability, working diligently to ensure that funds are allocated wisely in order to bring the greatest tangible relief to victims of oppression. An all-volunteer Board of Directors sets policies and procedures and monitors the budget and expenditures. In addition, an independent accounting firm conducts an annual audit to verify that IJMA Australia complies with all generally-accepted accounting principles and is a good steward of its financial resources.
    • The annual financial audit has nothing to say about being ‘a good steward’.
• As a charity, IJMA is accountable to the ACNC.
• As a company, IJMA is still accountable for some things to ASIC.

1. “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. ↑
2. The register of Victorian licensed fundraisers says that ‘Administration expenses’ is 0% – clearly a mistake. ↑
3. The register of Victorian licensed fundraisers says that IJMA is the beneficiary of its work‘ and that ‘Proceeds distributed to beneficiary’ is just 1%. ↑