Archived: MAF International: charity review

A charity review of MAF International (MAFI), an organization that is a member of Missions Interlink^[1]. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

For the previous review, see here^[2].

Are they responsive to feedback?

• I sent them a draft of this review on 14 February. Last review they did not respond, but this time somebody replied within two days, requesting that I defer publication for one month because someone they wanted to talk to was away, and that last time I reviewed them it was in August. But when I replied that the current review was due any time after June 2017, that I could give them until the end of the month, and suggesting that surely there was somebody else within the MAF family from whom they could get help, I heard nothing more.

Is MAF International registered?

• Yes, as a charity.
• It controls, either directly or indirectly, three other companies:

• Note 2 also says that ‘The results and balances of these entities have not been consolidated in these financial statements’. MAFI gives no explanation for this departure from what is expected.
• MAFI is a public company, a company limited by guarantee.
  • It is permitted to omit ‘Ltd’ / ‘Limited’ from the end of its name.
• It holds no business names.
• It has a fundraising licence in Queensland. The other state in which – per the ACNC Register – it operates, Northern Territory, doesn’t have a licensing regime.
• MAFI operates – per the ACNC Register – in thirteen overseas countries. Its disclosure elsewhere (e.g. the Directors’ Report) says that it operates in just Timor Leste and Papua New Guinea.

What do they do?

• It is a ‘support office’ for its UK holding company.

Does GI share the Gospel?^[3]

• No, this is not one of their objects (in the constitution).

What impact are they having?

• ‘Operational flight statistics’ are published in the Directors’ Report as MAFI’s ‘Key Performance Measures’, but no public information on the impact of MAFI, separately to the impact of the worldwide MAF operation, was found.

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

• N.B. The financial figures in the AIS 2016 are in Australian dollars, but the Directors’ Report tells us that the accounts are in US dollars:

^[4]

• If we define the impact as being delivered by what MAFI call the ‘Direct Cost of Operations’, $6.02 m, the cost of ‘administration’ is unchanged at 32% of expenses.
  • The Note on this cost shows that there is invariably a narrower definition of ‘direct’ possible:

Do they pay their board members?

• This is prohibited by their constitution.
• There is insufficient disclosure of the expenses to check.

Can you get a tax deduction?

• Their ABN record says you can, but it’s not offered on the internet, and the accounts show only $135K in donations that may be directly from the public.

Is their online giving secure?

• NA.

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

• NA.

Where were your (net) donations sent?

• An insignificant $27K of grants were made (to unspecified recipients).

Is their reporting up-to-date?

• Yes (five months after the year end, the same time as last year).
  • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts are now nearly 14 months old.

Does their reporting comply with the regulator’s requirements?

• AIS 2016: No
  • MAFI says that it ‘conducted activities’ in 13 countries. The information on flights in the Directors’ Report shows only three countries.
  • The figures are rounded to the nearest thousand, not the nearest dollar.
  • No outcomes are reported.
• Financial Report 2016: No
  • Special purpose financial statements do not show a true and fair view for a charity that has expenses of $11.84 m, 110 employees, and is supported by donations from people in 10 countries^[5].
  • The transactions and balances of the subsidiaries are not included in the accounts.
  • There is no related parties’ disclosure.
  • The expected cost of major inspections of aircraft is not a liability, and therefore, contrary to what is said in Note 15, should have no effect on profit and loss.

What is their financial situation?

• A significant rise in unrestricted donations, without a corresponding increase in services, resulted in the surplus as a percentage of revenue increasing from 2% to a very high 32%.
• Both short-term (working capital) and long-term financial structure are, based on the figures, sound.
• But they have a heavy dependence on the (unconsolidated) subsidiaries:
  • 45% of the current assets are in the receivable ‘Owing by subsidiaries’.
    • There is no disclosure about the collectability of receivables.
  • 71% of non-current assets rely on subsidiaries staying healthy.
  • 39% of non-current assets are amounts owing by subsidiaries not expected to be collected in the next 12 months. And on which no interest is earned.

What did the auditor say about the last financial statements?

• The auditor, Greg Mitchell for BDO Audit (NTH QLD) Pty Ltd, issued a ‘clean’ opinion.
• Before you decide how much comfort to take from this opinion,
  • read here and here.
  • read again the ‘Financial Report 2016’ section above.

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

• No
  • MAFI doesn’t operate in 13 countries.
  • They are long overdue in selecting an ‘Entity subtype’. The ACNC has told me that this is their fault.
  • ‘Phone’ and ‘Website’ are blank (but neither are compulsory).

Who are the people controlling the organisation?

• Locally, they are the three people shown on the ACNC Register (under ‘Responsible Persons’):
  • Stephen Charlesworth
  • William Harding
  • William Nicol
• Being a wholly owned subsidiary, MAFI is subject to the direction of that company. We don’t know how much direction that company exercises^[6].

To whom are they accountable?

• As a charity, to the ACNC.
• As a company, to ASIC.
• They are a Member of Missions Interlink.
  • For the comfort you can take from that, see the section Activities in this review.

1. MAFI in the Missions Interlink membership list links not to a website belonging to MAFI, but to MAFI’s holding company, Mission Aviation Fellowship International. This is a UK charity that also trades under the name MAF International. ↑
2. In this review, I confused the Australian company MAF International that is the subject of the review, with its UK holding company, also a charity that trades under the name MAF International. ↑
3. “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. ↑
4. This information would have been better placed in the Notes to the Financial Statements. ↑
5. They are effectively saying that any user, current or prospective, can request MAF International to tailor a set of financial statements to suit them. ↑
6. Stephen Charlesworth describes his position as Regional Director of the holding company. ↑