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MAF International: mini-review for donors

Care:  At least some of the information about this charity is no longer current.  Use the ‘Search charity names’ box to see if there is a later review.  If the latest review has a message like this, you are welcome to make your case for an updated review via email to ted@businessbythebook.com.au.

Mini-review of MAF International as an organisation that seeks donations. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

Note: MAF International does not seek donations for itself. The ‘Donate’, ‘Donate to MAF’ and ‘Give’ buttons on the website lead to a list of MAF organisations around the world. Selecting MAF Australia will take you to https://www.maf.org.au/. However, given that 45% of MAF Australia’s 2014-15 revenue, $1.67 m, was sent to MAF International, read on.

Is MAF International registered?

  • Yes, as a charity.
  • And, from ABN link in the ACNC Register, also registered as a public company.
  • Licensed to fundraise only in Queensland.
  • No licence required in the other state in which they operate, NT, but what about the fact that they seek donations on the internet?

What do they do?

  • ‘Mission Aviation Fellowship is an international Christian organisation whose mission is to fly light aircraft, and to use other technologies to bring help and hope to people in some of the world’s poorest communities’ [http://www.mafint.org/].

Do they share the Gospel?

  • No, this is not part of their mission (or objects in the constitution). They define ‘witness’ (one of their six values) as ‘Christ-like behaviour’.

What impact are they making?

  • ‘Impact’ is one of their values – ‘We value ministry that transforms lives and multiplies the effectiveness of those we serve, seizing opportunities to serve the living God in a fast-changing world’ – but there’s no information on the website about that impact.

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

  • 32% of expenses.

Can you get a tax deduction?

  • Yes, you can.

Is their online giving secure?

  • NA. (It’s MAF Australia’s giving that has to be secure (see above)).

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

  • NA. (See review of MAF Australia)

Is their reporting up-to-date?

  • Yes (and although over five months after the year end, not late)[3].
    • But if you are considering a large donation, I would ask for more up-to-date financial information – the accounts were signed in May 2016 for a year ending on 31 December 2015.

Does their reporting comply with the regulator’s requirements?

  • AIS 2015: No
    • No outcomes are reported.
    • The Financial Information is in Australia dollars, yet the attached financial statements are in US dollars. Doesn’t seem right.
      • If the transactions were in Australian dollars, why the need to ‘convert’ the financial statements for the AIS?
    • The figures are rounded to the nearest thousand, not the nearest dollar.
  • Financial Report 2015: Doubtful.
    • Only if you think the directors’ decision to say that there are no users who are dependent on general purpose financial statements is reasonable.
    • Only if you think that the directors show a true and fair view even though
      • There is no disclosure of the related party transactions and balances, which in MAF International’s case are probably extensive.
      • The financial statements do not include MAF International’s two wholly owned subsidiaries, MAF Aviation Services Pty Ltd and MAF PNG Holding Ltd.
        • The first is an Australian charity holding assets of $7.91 m and liabilities of $7.76 m. Because it is a small charity, there are no further details. MAF International’s Notes disclose that the asset is a long-term loan to the other subsidiary. But there is no disclosure on the liabilities.
        • The other subsidiary, thePNG registered MAF PNG Holdings Ltd, itself has a wholly-owned PNG subsidiary. Ask the PNG Government if you need more information

What is their financial situation?

  • Revenue declined 13%, principally due to lower operating revenue (not donations). Expenses were constant, so only a small surplus. (But reserves are high.)
  • Current (short-term) assets are over three times current (short-term) liabilities.
  • They have a heavy dependence on subsidiaries:
    • 69% of non-current assets rely on subsidiaries staying healthy.
    • 33% 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?

  • This report is a ‘clean’ opinion. To take the right amount of comfort for this finding, please read here and here.
    • Note, however, that he approved of the directors’ decision to produce the type of financial statements that require less disclosure. These are only a correct choice if they are no users, present or prospective, who are dependent on the fuller statements to make their decisions about MAF International[1]. With expenses of $8.59 m, spread across 14 (ACNC) / 11 (website) countries[2], you might question this.
    • And he also approved of the decision to leave the two subsidiaries out of the accounts. With airplanes and debt involved, do you think that you get a proper picture of MAF International?

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

  • Almost. They are long overdue in selecting an ‘Entity subtype’ and there’s nothing under ‘Phone’ and ‘Website’.

Who are the people controlling the organisation?

  • MAF International is a wholly owned subsidiary of a UK MAF group company, so ultimately the control rests with them. We don’t know how much direction that company exercises.
  • Ignoring that, in Australia MAF International is controlled by the people shown here.
    • On the Register, there’s also William Harding[4].

To whom are they accountable?

Are they responsive to feedback?

When sent a draft of this review, they did not respond.

 

 

  1. They are effectively saying that any user, current or prospective, can request MAF International to tailor a set of financial statements to suit them.
  2. Only eleven are listed on the website.
  3. The website has yet to be updated for the latest financial statements (issued on 20 May 2016).
  4. and two directors have a different first name to that on the website.
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