Archived: Kids Outreach International Limited: charity review

This is a charity review of Kids Outreach International Limited (KO), an organisation that seeks donations via the internet^[1] and is a member of Missions Interlink. (Including the answers to the questions that the charity regulator, the ACNC, suggests that you ask.)

For last year’s review, see here.

Are they responsive to feedback?

• There is no invitation to give feedback or make a compliant on the website, nor anything about accountability.
• I sent them a draft of this review. Like last year, they….did not respond.

Is KO registered?

• As a charity, yes.
• KO is a public company, a company limited by guarantee.
• Names:
  • Kids Outreach International. As it doesn’t have the necessary provisions in its constitution, it should be including ‘Limited/Ltd’ on the end of its name.
  • Love for Kids is registered (as a business name), but Love for Kids Russia is used.
  • ‘Step Up to the Mission is registered. (The website not working.)
  • Step Up Against Slavery is not registered.
• Fundraising:
  • There’s a licensing regime for charities in six states. KO, per the ACNC Register, operates in four of them: New South Wales, Queensland, Victoria, and Western Australia. (It also operates in the ACT.)
  • KO doesn’t have any fundraising licences. It doesn’t mention licensing on its website or in its Financial Report 2016. Does it believe that it is exempt?

What do they do?

• These projects.
• What they said they did in 2016 (via their Annual Information Statement (AIS) 2016):
  • 1. Facilitated teams of volunteers to live in Russian summer camps to provide cultural exchange, life skills education and broadening the horizons of the Russian children and their carers/camp counsellors. 2. Financial assistance to families who have adopted disadvantaged children. 3. Raised funds for victims of sex trafficking that are supported by an organisation in Finland. 4. Commenced negotiations for cross-cultural, spiritual and lifeskills education programs in Estonia with local partners. Pilot program to be delivered in 2017.

Does KO share the Gospel?^[2]

• It appears from a search of ‘gospel’ on the website that individuals on the trips overseas do.

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?

• If we define ‘direct’ as ‘Specified Projects’ plus ‘Outreach Project’ (both unexplained in the accounts), then it cost $91K to deliver $56K. That’s 62% for ‘administration’.

Do they pay their board members?

• The constitution prohibits this.
• There’s insufficient disclosure in the Financial Report 2016 to conclude on such payments.

Can you get a tax deduction?

• No

Is their online giving secure?

• The online giving offered, via GiveNow, does not mention security.

Is their reporting up-to-date?

• Yes (lodged six months after their year-end 10 days 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 over 14 months ago.

Does their reporting comply with the regulator’s requirements?

• AIS 2016: Not quite. No outcomes given.
• Financial Report 2016: Yes^[3]
  • Because of its size (‘Small’), KO is not required to submit a Financial Report.  It has, however, chosen to submit one anyway. But because it was a voluntary submission, the Report does not need to comply with the ACNC’s requirements.  (And it doesn’t.)
  • However, their 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.” Missions Interlink do not define ‘appropriate’, but compared what a professional accountant would produce (and a professional auditor or reviewer would require), again,
    • Two of the four required financial statements are missing.
    • The Income Statement does not comply with the Accounting Standards.
    • There is no declaration by the directors.
    • The disclosure is not consistent with the type of statements – general purpose – claimed.
      • Including no mention of related parties.

What financial situation was shown by that Report?

• The surplus as a percentage of income went backwards again, from positive 3% to negative 3%.
  • The 22% decline in revenue was more than compensated for by a reduction in ‘Employment Expenses’ of 36%.
• $33K is held in ‘Cash and cash equivalents’ but is offset by short-term payables of $20K (including the unexplained ‘Funds held on behalf of FH40’ and ‘Funds held on behalf of SUAS’).
• There are no long-term liabilities, so the long term financial structure is OK.

What did the auditor say about the last financial statements?

• The auditor, Mark Hosking, concluded from his review – not an audit – that ‘nothing has come to our attention that causes us to believe that the annual financial report…does not present fairly in all material respects the financial position…and…financial performance…This provides a lower level of comfort than a ‘clean’ opinion^[4].
  • Before you decide how much comfort to take from this opinion, please re-read the comments under ‘Financial Report 2016’, above.

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

• Not quite. ‘Phone’ and ‘Website’ are blank. (But the ACNC say that neither are compulsory.)

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

• The two that are mentioned on the website are sponsorship of somebody going to Russia and going yourself.

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

• Not disclosed.

Who are the people controlling the organisation?

• Not shown on the website, but the ACNC Register lists them under ‘Responsible Persons’:
  • John Donovan
  • Antti Haavisto
  • Ross Kelly
  • Taru Kohonen
  • Kari Lehelma
  • Roger Nicoll
  • Risto Rummukainen
    • Is it this Risto?

To whom are KO accountable?

• As a charity, to the ACNC.
• The Missions Interlink ‘Accredited Member’ logo is at the bottom here. Membership confirmed.
  • Missions Interlink is an organisation that has standards with which KO must comply, but, as a comparison of this review with the review last year shows, it appears that at least the reporting standards are either much lower than professional standards or can be treated with impunity.
• Accountable, for some things still, to ASIC.

1. On its websites (www.kidsoutreach.org and www.stepupagainstslavery.org) by inviting you to make a transfer to its bank account, or online via GiveNow.
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. ↑
3. I was wrong last year. I didn’t realise that if a charity that wasn’t required to submit a Financial Report submitted one, it did not need to comply with the ACNC’s requirements for such reports. ↑
4. To take the right amount of comfort from a ‘clean opinion’, please read here and here. ↑