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Archived: Open Doors Australia Inc, charity review

Care:  At least some of the information about this charity is no longer current.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.

This is a review, for donors, of the Australian charity Open Door Australia Inc (ODA). It is structured according to the charity’s entry on the ACNC[i] Register, and its purpose is to supply some information extra to what is there, information that may be helpful in your giving decision.

It is up to you to decide whether any or all of the information presented here is what you need in order to make that decision, and whether you should seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent, on 28 July 2015, my observations to the charity and invited them to suggest corrections, and submit comments for publication. The email was sent to the Charity Address for Service[ii].  I have not received a response.

Organisation of this review

  • The first part of this review is organised according to the headings in the register entry. This is how to use this section of the review:
      1. For each heading in the register entry, first read the information under that heading.
      2. Then check if that heading is included below. (Headings for which there is no comment are not included.)
  • There is then a more detailed comment on the Financial Report.
  • Lastly, there is a section Membership of accountability organisations claimed.

Sources

  • ACNC Register (including links)
  • Google search on the charity’s names (see Legal Name, below).
  • ODA website, and social media at the bottom here. Not on LinkedIn.
  • State government fundraising licence registers.
  • www.glassdoor.com
  • GreatNonprofits (for the US and international organisations)
  • Guidestar (for the US and international organisations)
  • Charity Navigator (for the US and international organisations)
  • ECFA (for the US organisation)

REGISTRATION DETAILS

Entity Subtype (‘charitable purposes’)

  • A primary sub-type consistent with sharing the Gospel.
  • And consistent with the purpose clause in the governing document:

ODA is organised and shall continue to be operated exclusively for Christian purposes. Compelled by the love of Jesus Christ and His commandment to go into all the world and preach the Gospel to every creature, the aims, intents and purposes of ODA are to meet the needs of the Suffering and threatened Chruch worldwide as requested and to edify and encourage the Church in the free world to become involved with the Suffering Cjhurch and by doing so “awaken and strengthen what remains” (Rev.3:2). These aims, intents and purposes shall remain foremost as the goals of ODA.

CHARITY DETAILS

Legal Name

Charity ABN

  • Tax deductibility: You cannot claim a tax deduction for a donation to ODA.

Charity Street Address

  • The postal address, from the website: PO Box 6237 Frenchs Forest, NSW 2086
  • There’s also a Queensland office: Queensland Baptists 53 Prospect Road Gaythorne QLD 4051

Phone

  • Blank. From the website: (02) 9451 2999

Website

ANNUAL REPORTING

  • AIS 2014:
    • This is the Annual Information Statement (AIS 2014).
    • It includes basic financial information. If you think that’s all you need then you should note that
  • The AIS 2014 says that Transitional statements were submitted in the Financial Report, when actually they were special purpose statements.
  • The classification of expenses is not the same as that used in the Financial Report.
  • Financial Report 2014:
  • This report can also be opened from within the AIS 2014, above.
  • The Financial Report wasn’t completed until nearly five months after the year end. It was then another month before it was lodged on the Register. (This was only half a month before the final day for lodgement.)
  • The coverage of finances in this review is left until the section Latest financial report – detail, below.

ABOUT THE CHARITY

  • Statement of Faith
    • None found on the website.
    • This probably reflects their lack of denominational affiliation:

Does Open Doors belong to any particular denomination?

No, Open Doors is a totally interdenominational organisation and is therefore not restricted in who we help. If people are Christian and they are persecuted, we help them. We define Christian as anyone who professes the name of Jesus.

  • However, there is a statement of faith in their governing document, the Apostolic Creed (more commonly Apostle’s Creed), with ‘the holy catholic church’ changed to ‘the holy Christian church’. This is a creed used in the Roman Catholic, Anglican, and many Protestant churches, but not officially recognized in the Eastern Orthodox churches.

Who the Charity Benefits

  • Vision
    • None for Australia specifically
    • For the worldwide organisation, here.
  • Mission
    • None for Australia specifically
    • For the worldwide organisation, here.
  • Activities
    • In the AIS 2014 ODA repeats the Mission, above.
    • The website’s explanation of what ODA does is for the worldwide organisation, not specifically Australia.
    • In the Impact Report (above), there is a description of what ODA does:

In Australia, our aim is to educate and mobilise Christians in Australia to pray, learn and take action on behalf of persecuted Christians around the world

  • Outcomes
    • Unfortunately in the AIS 2014, in response to the request to describe activities and outcomes, there are only activities (see above).
    • In the first half of the Impact Report (see above), we learn of the result of donor dollars in Australia:
      • …Our events, speaker tours and presence at conferences enabled us to engage with many new supporters, and strengthen our presence and partnerships with churches and Christian networks around Australia.
      • In 2014 we witnessed an unprecedented response from the Australian church following a steep rise in violence in Syria, Iraq and Nigeria by Islamic extremists against Christians in those countries. We saw thousands of new supporters join us in the ministry throughout this period, many as a response to our Prayer for Iraq Day.
    • In the second half, there is a summary of OD’s actions globally: ‘3,164,375 Bibles and other literature distributed’ etc.
    • Neither Open Doors USA or Open Doors International have submitted an impact report to Guidestar. (One of the questions answered in this is ‘How do you know that you are making progress?’
  • Impacts
    • None found.

Size of Charity

  • With revenue of $5.0 m, ODA far exceeds the qualification for the top size of charity ($1 m).

Financial Year End

  • This means that the next financial report is due by 30 June 2016. Before that the financial information on the Register will be up to 18 months out-of-date.

WHERE THE CHARITY OPERATES

  • Operating State(s)[iii]
    • There is no evidence of offices other than the ones in NSW and Queensland (see above), so presumably the listing here reflects the fact that ODA fundraises all over Australia.
    • ODA doesn’t hold fundraising licences in any of the seven states that have a licensing regime. It is, from 1 September 2015, exempt in NSW.
    • As an association ODA is a registrable Australian body. As it is carrying on business interstate (at a minimum in Queensland), the law[iv] requires it to have an Australian Registered Body Number (ARBN). ODA doesn’t have an ARBN.

CHARITY’S DOCUMENT

  • There is no Annual Report/Review available on the ACNC Register.
  • The website has a separate section ‘Impact Report’. This appears, both from the content and the URL, to be ODA’s annual report/review. For 2014 the usual full report has been replaced by a one page Summary.

RESPONSIBLE PERSONS

No. of Australian directorships

Mark BENNETT                                            6[v]

Robert GUY                                                    1

Darryn KENEALLY                                      6

Ken PRIDMORE                                            1

Robert REEVE                                               9

Ken SINCLAIR                                              1

  • The ‘Australian Director’ is ex-officio a member of the Board [the governing document]. The Register entry is therefore missing Mike Gore (here and here.).
  • The governing document requires the following Office-Bearers: Chairman, Deputy-Chairman, Secretary, and Treasurer. The ACNC record does not reflect this.

 

(End of review of the ACNC Register information)

 

Latest financial report – detail

  • There is no report by the committee, a usual inclusion.

Where the directors put their name behind the accounts – the Statement by Members of the Board (page 1 of the Financial Report)

  • Their decision that ODA is not a ‘reporting entity’ is a critical one for what goes in the financial statements, but they give no reasoning.

An independent opinion on the financial statements: Independent Auditor’s Report (page 2 of the Financial Report)

  • The auditor has assessed the directors’ decision that ODA is not a ‘reporting entity’, and agreed with it; that is, that ODA doesn’t have any users (either existing or prospective) who are dependent on a general purpose report (that is, a report prepared for those who are not in a position to required ODA to produce a report tailored to their needs.)
  • It is not clear why the auditor took the unusual step of highlighting the foreign current translation policy.
  • The Report does not include the statement about compliance with the Open Doors International Audit Manual required by the governing document.
  • This is a ‘clean’ opinion. Read here and here to draw the right conclusions from this.

What’s left at the end of the year – the Balance Sheet (page 4 of the Financial Report)

  • Cash and cash equivalent (sic) $459K (including Note 2)
    • There is no explanation why this amount of cash is needed.
    • A term deposit doesn’t fit with the stated policy for ‘cash and cash equivalent’ – or at least not without explanation
  • Receivable from ODI Affiliate $3K
    • The directors’ selection of special purpose rather than general purpose financial statements means that, unless they think that it is needed in order to show a true and fair view, disclosure about related parties (and there dealings with ODA) is not required.
      • The Board appoints and removes the Australian Director ‘in consultation with the CEO of Open Doors International [the governing document].
      • Directors’ fees cannot be paid (the governing document).
  • Plant and equipment $67K (including Note 4)
    • Due to the movements in the assets not being shown, we cannot see the reason for the 30% reduction.
  • Trade and other payables $116K (including Note 5)
    • Super contributions are normally payable to the employee’s super fund, not to the employee.
    • Presumably the remainder of this $56K is also not due to the employee.
  • Provisions $118K (including Note 6)
    • No non-current employee benefits?
  • Fund Balance Reconciliation
    • This is, without explanation, a non-standard inclusion in a balance sheet.
    • There is no explanation of the ‘expendible’ versus non-expendable distinction.
    • There is no explanation of the restricted versus unrestricted distinction.

What was earned, what was consumed during the year – the Income Statement and Changes in Fund Balance (page 6 of the Financial Report)

  • The required ‘Other comprehensive income’ section is absent. (The Statement appears to be using a format that is considerably out-of-date.)
  • Contributions and bequests $5.0 m
    • It is not possible to see how much was given in each of the four donation options.
  •  Books and tapes, net of cost $73K
    • Presumably ‘net of cost’ means that this is the gross profit from sales. If so this understates revenue.
    • It also means that the required disclosure of cost of sales is missing.
  • Expenses $4.9 m
    • The classification mixes the nature of the expenses with their function.
  • Support – other regions $2.7 m
    • Presumably ‘other regions’ means overseas.
    • This is 54% of expenses, yet there is no Note.
    • There is no explanation of to whom this money was sent or how ODA ensured that is spent for the purposes it was given.
  • Literature distribution $135K
  • Training $124K
    • Presumably, since ‘Administration’ is shown separately, these items only includes direct costs.
  • Awareness & Motivation of the Free Church $658K
  • Social Economic Support $116K
  • Research & Advocacy $112K
  • Fund raising (sic) $685K
    • There is no Note (or Notes) to explain the composition of these items.
  • Administration $405K
    • In June 2015 ODA had 14 full-time, eight part-time, and two casual employees.)
    • ‘Employee expenses’, from the AIS 2014, were $1.3K.  Why then is ‘Administration’ only $405K?
  •  Net loss on foreign currency transaction $7K
    • There is no Note to explain the composition of this item.
  • Missing information:
    • Employee benefits expense
    • Depreciation and amortisation expense

How the wealth of the charity has changed – Statement of Changes in Equity – page of the Financial Report

  • This statement is missing.

Essential information to go with the figures: the Notes to Financial Statements (page 8 of the Financial Report)

Note 1. Statement of Accounting Policies

  • a) Basis of Preparation
    • The directors say the company is ‘not a reporting entity’, but they give no reason for this important decision.
    • They are in effect saying that anybody who is interested in this company has the power to contact the company and request a report tailored to their particular needs.
    • The result of the decision is that the accounts don’t comply with the Australian Accounting Standards, and can disclose considerably less than that required for a general purpose report, a report designed for those people who are dependent on the charity’s report for the information they need.
      • The directors do not say which Accounting Standards they did comply with.
    • You can compare the directors’ decision to this advice from the ACNC: If people use and rely on your charity’s financial statements to help them make decisions (for example, about how to spend money) then your charity is most likely a reporting entity.
    • Although not clear from this, the directors should also consider prospective users.
    • The directors appeared to have, contrary to the Accounting Standards, accounted for some items using accrual accounting, and others using cash accounting.
  • h)   Foreign currency translations
    • No reason is given for the inclusion of this Note.
  •  Missing Notes (in addition to the ones mentioned above)
    • New and revised Standards
    • Accounting Standards issue but not yet effective
    • Employee benefits
    • Current and non-current classification
    • Impairment testing
    • Significant management judgements
    • Trade and Other Receivables
    • Impairment of non-financial assets
    • Remuneration of auditors
    • Events after the reporting date
    • Reconciliation of surplus
    • Fair value measurement
    • Commitments
    • Contingent liabilities
  • Incomplete Notes (in addition to the ones already mentioned)
    • Property, plant and equipment

Membership of accountability organisations claimed

  • None claimed.
  • This FAQ says that they rely principally on their auditor:

How is Open Doors Australia held accountable financially?

Open Doors is a registered ministry under the Department of Fair Trading. Our annual budget is approved by a Board of Trustees as well as the leadership of Open Doors International (our Parent Body). Our accounts are also audited annually by an independant firm and our audit reports and financial statements are published and available on request.

  • However, this does not mention the ACNC, a body that exerts at least some accountability on charities.
  • More significantly though, for a Christian organisation, it does not mention Missions Interlink.
    • Although they say that their membership list is not publicly available I stumbled across this one on the internet. It shows ODA as a member as at 3 August 2015.
  • Open Doors USA is a Charter Member of the ECFA, and the Canadian organisation is a CCC Certified Charity.

(End of review)

 

 

 

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] Which is also the prime contact address on the website.

[iii] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.’

[iv] Part 5B.2 of the Corporations Act 2001

[v] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held.

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