Archived: Interserve Australia Inc: charity review

This is a charity review of Interserve Australia Inc (Interserve), an organisation that seeks donations online, and is a member of Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

This the second review of Interserve. You can see the first here.

Are they responsive to feedback?

• Interserve does not invite, on its website, either feedback or complaints.
• I sent them a draft of this review. They…did not respond.

Is IT registered?

• As a charity, yes.
• Interserve is a Victorian incorporated association (No. A0025704J).
  • It operates, per the ACNC Register, in all eight states.
    • Interserve has an office for Victoria/Tasmania in Melbourne, and another for NSW/ACT in Sydney. It also has a name and email contact for each of South Australia, Western Australia and Queensland/Northern Territory.
    • And an invitation on the internet to give.
  • It has the registration necessary to operate interstate (ARBN 108 918 823).
  • It has a fundraising licence in NSW, but not in the other five states that have a licensing regime applicable to charities. It does not mention fundraising licences on the website, nor in the Financial Report 2016.
• Interserve does not hold any business names. It therefore should not be trading under any name other than its legal name. Not Tangible Love, Interserve, CultureConnect or Interserve Australia^[1].
• Interserve operates, per the ACNC Register, in Bangladesh, Cambodia, India, Nepal, and Pakistan. But in the Director’s (sic) Report [Financial Report 2016] they say they are in ‘more than twenty countries’.
  • On the website, it’s six regions, and four ‘partners’ (missionaries).

What does Interserve do?

• Start here, and then follow the links at the bottom of the page.

Does Interserve share the Gospel?^[2]

• Via some of its missionaries, no doubt.

What impact are they having?

• Nothing systematic found.

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

• There’s a figure for ‘Administration expense’, but if we define direct as the money sent to the missionaries (‘Partners Expenses’), that figure is clearly just a subset of ‘administration’, and ‘administration’ is 61% of expenses.

Do they pay their board members?

• There’s nothing against this in the constitution.
• There’s insufficient disclosure in the Financial Report 2016 to conclude on such payments.

Can you get a tax deduction?

• No, not Interserve itself. However, you can for a donation to its fund, Interserve Overseas Aid Fund.
• This is recognised in the answer to a ‘Giving FAQ’ on the website:
  • In Australia, a tax deduction can be claimed for donations to certain types of work only. Donations supporting Interserve Partners working in community aid and development are paid into our Overseas Aid Fund and are tax-deductible. Donations supporting Partners doing non-development work (such as theological education, classroom teaching or pastoral work) are not tax-deductible. Other income received by Interserve – including unallocated donations, income from special appeals and bequests – is paid into the Overseas Aid Fund and is tax-deductible for the giver.
    • However, it isn’t possible to tell which workers do work that is eligible for a tax deduction when you give via the website.

Is Interserve’s online giving secure?

• At the bottom of the page there’s the GeoTrust logo, so yes.

Is their reporting up-to-date?

• Yes (five and a half months after their year-end, a week later 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 nearly 15 months ago.

Does their reporting comply with the regulator’s requirements?

• AIS 2016: No
  • The ‘Description of charity’s activities and outcomes’ is not particularly about 2016.
  • Several of the financial figures do not match those shown in the financial statements.
  • Money is sent to missionaries yet ‘Grants and donations made…’ is shown as zero.
  • Contrary to what is said in Section D, the financial statements do not include more than one entity.
  • No outcomes are reported.
• Financial Report 2016: No, a true and fair view is not shown.
  • For a charity with revenue of $4.63 m (primarily donations), operating all over Australia and in five (twenty+ ?) countries overseas, and with 112 staff, the directors’ decision for another year that Interserve does not have any users, past or prospective, ‘who are dependent on its annual financial statements’, is implausible. The result, special purpose financial statements again, implies that all its users can command the preparation of a report tailored to their needs. Not believable.
  • The classification of both revenue and expenses has been completely changed without any explanation.
  • Interserve has a ‘Specific purpose donations’ (expense, not revenue) of $241K. This is their explanation:
    • Specific purpose donations are designated gifts received for partners. In 2015, the designated gift fun was classified as a reserve. In 2016, the directors have established that there is a constructive obligation to their partners hence the directors have resolved to move the balance of the reserves to liability through the statement of profit or loss.
    • There is no explanation of how moving a credit balance from a reserve to a credit balance in liabilities results in an expense.
    • The disclosures required by the Accounting Standards are missing.
  • There is no explanation of the distinction between employees and ‘partners’.
  • The Statement of Cash Flows is incorrect: dividends and interest should be disclosed separately, the figure for ‘Receipts from suppliers’ is incorrect, and just three line items is inconsistent with the purpose of the statement.
  • There is an unexplained difference of $115K between what is shown as revenue for 2015 this year compared to last year’s accounts.
  • 95% of the revenue is in items that are not explained.
    • What is the relationship between the revenue ‘Team support funds’ and the expense ‘Partners expenses”?
  • Four of the six largest expenses that produce the ‘Surplus for (sic) operating activities’ need an explanation: ‘Partners Expenses’, ‘Gift fund expenses’, Culture Connect Expenses’, and ‘International expenses’.
  • There is no explanation for the borrowings that existed last year being absent from the accounts this year.
  • The amount received for the tax-deductible Fund is again not disclosed.

What financial situation was shown by that Report?

• Ignoring the ‘Specific purpose donations’ expense (see above), the surplus as a percentage of revenue increase from less than one percent to 3%.
• Current assets are 5.9 times current liabilities.
• ‘Cash and cash equivalents’ plus ‘Financial assets’ equals ten and a half months’ revenue.
• $726K is held in shares (not expected to be sold within 12 months), a relatively risky asset class. No information on this portfolio is given.
• Long term assets are 1.5 times long term liabilities.

What did the auditor say about the last financial statements?

• The auditor, Peter Shields, for Saward Dawson Chartered Accountants, issued a ‘clean’ opinion. To take the right amount of comfort for this finding, please
  • read here and here to learn about opinions, and
  • re-read the information above on Interserve’s financial reporting.

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

• Yes

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

• ‘Tangible Love’ [directed to a separate website]
• ‘Donate now’
  • ‘Interserve Worker’
  • ‘General donation – area of greatest need’
  • ‘CultureConnect’
  • ‘Care for Kids Education (COKE) Fund’
  • ‘Action in Mission (AIM) Fund’
  • ‘Other’
• ‘Give regularly’
  • The same options as above.

Where were your (net) donations sent, and what ensures that they are used for the purposes given?

• Not disclosed.

Who are the people controlling Interserve?

• Not shown on the website. But the ACNC Register (under ‘Responsible Persons’) says it’s these people:
  • Antonius Buntsma
  • Ricky Campbell-Allen
    • Is it this Ricky Campbell-Allen?
  • Wesley Cassidy
    • Is it this Wesley Cassidy?
  • Joel Erkkila
    • Is it this Joel Erkkila?
  • Greg Horth
  • Allan Mathews
    • Is it this Allan Mathews?
  • Alison Morgan
    • Is it this Alison Morgan?
  • Andrew Prince
    • Is it this Andrew Prince?
  • Ruth Thorne

To whom is Interserve accountable?

• Their answer has its own page:

• The ‘National Council’: incidental references on the website imply that this is the board of directors. But the board is Interserve, not a body to which Interserve is accountable. They describe the relationship correctly elsewhere:

• The ‘accountability’ page is the only place where they mention ‘State committees’.
• As they say on this page, they are accountable (as a charity) to the ACNC.
  • The seal they show is called the ‘charity tick’. It means that Interserve 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.
• Missions Interlink membership confirmed.
  • Missions Interlink provides very limited accountability.
• The logo, The Micah Network, indicates membership, membership that provides no accountability.

1. There is an unrelated company called Interserve Pty Ltd. The business name Culture Connect Australia is held by Culture Connect Pty Ltd, and CulturalConnect is held by an individual. ↑
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. ↑