Archived: PeaceWise Ltd: charity review

Charity review of PeaceWise Ltd (PeaceWise^[1]), an organisation that seeks donations online, and is accredited with the CMA Standards Council (a ‘Foundation Partner’). (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

Are they responsive to feedback^[2]?

• There is a PeaceWise ‘Complaints Policy’ on the website.
• I sent them a draft of this review on 2 January. They responded the next day, requesting a month’s extension. Two days before the due date, they asked for another few days. When they responded on 9 February with comments, I agreed to a few changes and gave my reasoning for not making others. Unfortunately, despite a 14 February follow up request for what they wanted published, they have not responded. Apart from the correction of errors, I have therefore only included their comments where I told them that I would.

Is PeaceWise registered?

• As a charity, yes.
• PeaceWise is a public company, a company limited by guarantee.
  • It is not permitted to omit ‘Limited/Ltd’ at the end of its name. As it does on its website and in social media.
• It has one business name, Peace Wise.
  • The Register shows PeaceWiseKids as a name they are known by. It is not registered.
    • PeaceWiseKids has its own website, but no ABN.
• PeaceWise has four trademarks, ‘Peacewise’, ‘Peacewisekids’, and the two logos you see on its website.
• The ACNC Register says that PeaceWise operates all over Australia. And it seeks donations on the internet.
  • It has fundraising licences in New South Wales, Queensland and Tasmania. There are three other states that have a licensing regime applicable to charities. PeaceWise does not explain why it thinks that it doesn’t need a licence in those states.
    • Ministry comment: ‘PeaceWise has not registered in other states because of the statutory definitions of the entity or activities covered by the state or because of various exemptions such as the thresholds for minimum donations within the particular state.’
  • Whether or not it uses street collectors is not disclosed.
    • Ministry comment: ‘PeaceWise does not use street collectors.’
• PeaceWise operates overseas, per the ACNC Register, only in New Zealand.

What do they do?

• See here.
• The ‘Annual Report from PeaceWise Chair Jeroen Bruins’, combined with the Directors’ Report (Financial Report 2016, below), gives a good insight into what PeaceWise does.

Does PeaceWise share the Gospel?^[3]

• Some of their work allows them to do this.
  • Ministry comment: ‘We ask you to correct this. We consider that the correct answer should be “Yes: its website and newsletters are full of the Gospel. Its training is based on the Gospel. Its statement of beliefs in its constitution is unashamed mainstream Christian. Whilst its activities may not be equivalent to a Gospel sermon, this organisation is, in Gospel terms, way beyond a mere good living and social concern charity. I am informed by PeaceWise that: “Our peacemaking teaching and training is based on biblical principles and very clearly focused on and following the teachings of Jesus, the Gospels and NT. We help people in conflict to reconcile with God and those they are in conflict with. This often requires repentance, confession and seeking forgiveness to the ones they are in conflict with. This can only be done on the basis of the Gospel and the saving sacrifice of Jesus. Reconciliation is the heart of the Gospel and comes clearly through in our ministry.’

What impact are they having?

• In the Directors’ Report, the directors say that
  • Performance in non-material (sic) terms relates to how many lives are impacted by the hope-giving work of the ministry, how many relationships are restored, how many people draw closer to Jesus, how many people learn to deal better with conflict in their marriages, workplaces, families and other contexts. This non-material aspect of ministry is more difficult to measure but vitally important.
• If these things were measured, the results are not reported.
  • Ministry comment: (What they wanted me to add to the above) ‘However, the Chairman’s Report describes in extensive detail many examples of the impact the ministry is having in these areas.’
• Regular program evaluations are required by the accreditation held with the CMA Standards Council (Standard 5.6). Evaluation is not mentioned on the website.
  • If evaluations are new to PeaceWise, we might not see one for three years (the CMA standard).

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

• The expenses are not classified in a way that allows the calculation of this figure.

Do they pay their board members?

• This is permitted by the constitution.
• It is not possible to tell from what PeaceWise have published whether they have taken advantage of this ability.
• If they are paying these members, they are contravening the CMA Standards Council requirements (Standard 3.7).
  • Ministry comment: (What they wanted me to say instead of the above) ‘Their last annual report discloses that their CEO is remunerated $36,000 per annum. I am informed that Board members are all volunteers and are not paid. The National Director (CEO), through a company, consults part time for the ministry and receives financial compensation for his managerial role as CEO. He is a board member, but not paid for this role. The services of the CEO are provided by a contract from Burgess Consultants Pty Ltd, a consulting firm which provides services to a large corporate for the remainder of the CEO’s time each week.’

Can you get a tax deduction?

• No

Is their online giving secure?

• Comodo is used, so yes.

Is their reporting up-to-date?

• Yes (lodged three months after their year-end, a month earlier 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 14 months ago.

Does their reporting comply with the regulator’s requirements?

• Annual Information Statement (AIS) 2016: No
  • Why is ‘National Director Fees’ ($36K) omitted from ‘Employee expenses’?
  • The ‘Description of charity’s activities and outcomes’ does not describe 2016’s activities^[4].
  • Outcomes are not mentioned.
• Financial Report 2016^[5]: No.
  • Income Statement:
    • The directors declare that one of their aims is to produce a surplus, yet there is no reason given for the second substantial deficit in a row, nor what they are doing about it.
    • There is no information about the sizeable grant that was received (31% of revenue).
    • 43% of the expenses are included in the single item ‘Other expenses’.
    • ‘National director fees’ are, without explanation, not included in ‘Employee benefits expense’.
    • There is no explanation of the item ‘Consumables used’, 23% of expenses.
  • Statement of Financial Position:
    • There is no information about their role as a trustee (‘Cash and cash equivalents’).
    • 7% of the assets are in ‘Patents and trademarks’. But there is no policy Note on intangibles, so there is no defence that the figure recorded for the four patents it holds is not an overstatement.
    • ‘Inventories’ are 12% of the assets, yet there is no description and no policy Note.
    • 76% of the liabilities ($63K), three funds and a project, are questionable as liabilities. There is no Note explaining the items.
    • The information for current liabilities in the Statement of Financial Position does not match the Notes.
  • Notes to the Financial Statements:
    • The item ‘Unearned Income ($44K) in the ‘Reconciliation of cash flow… (Note 11), does not match anything in the Statement of Financial Position.
    • Many of the Notes normally included in Note 1 are missing.
    • The is no information on related parties.
  • There is no reference to the ACNC Act in either the Directors’ Declaration, or the Independent Auditor’s Report.
  • Two required lines in the Statement of Changes in Equity are missing.
  • PeaceWise values feedback, and its display of the CMA Standards Council seal implies that ‘the organisation takes governance, accountability and stewardship seriously’, so, in addition to the suggestions flowing from the above points, plus other sections of this review, you might also ask about this decision:
    • The directors have chosen (without giving their reasons), to produce the lower disclosure special purpose financial statements. This is instead of the type of statements that is appropriate if stakeholders need regulatory intervention to ensure that they get the information they need to make decisions. With a range of people and organisations contributing revenue, a request for funds from the public, and operations all over Australia (including ‘regional ministry coordinators’ in four states), it is difficult to see how PeaceWise would be comfortable with supplying a tailored financial report to any stakeholder that asked for one.
  • Because of the above not immaterial issues, it is arguable that the financial statements are not ‘complete and accurate’, and therefore PeaceWise is not complying with Standard 6.1 of the CMA Standards Council standards (see above).
    • Ministry comment: (What they wanted me to write). ‘PeaceWise has advised me that they have asked their auditor to consider these points.’

What financial situation was shown by that Report?

• Despite an aiming ‘to finish each year with a surplus rather than a deficit’ (Directors’ Report), last year’s deficit was repeated.
  • It is, however, slightly less as a percentage of revenue (negative 13% to negative 11%).
• Employee benefits was 28% of expenses (down from 34%).
  • But as a measure of payments for labour, it does not include what was paid to the National Director.
• Current assets as a multiple of current liabilities (working capital) declined markedly from 3.6 times to 2.0 times.
• With zero non-current liabilities, $14K of long-term assets is sufficient.

What did the auditor say about the last financial statements?

• The auditor, John Stephens F.C.A., for Omniwealth Accounting & Audit, issued a ‘clean’ opinion.
• However, before you decide how much comfort to take from this opinion, I suggest you read again the ‘Financial Report 2016’ section (above).

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

• Yes

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

• ‘where it’s needed most’
• ‘kids project – peacewisekids’
• ‘help build new adult courses’

Where were your (net) donations sent?

• NA

Who are the people controlling the organisation?

• The people shown here.
• The ACNC Register (under ‘Responsible Persons’) is missing John Hollier and Deborah Bensted:
  • Geoffrey Bateman
  • Jeroen Bruins
  • Bruce Burgess (a PeaceWise executive)
  • Li Ai Gamble (a PeaceWise executive)
  • Wendy Konemann
  • Stuart Wesley
• The board is responsible to the membership. The number of members is not disclosed.
  • Ministry comment: ‘The Board is the membership – there are no other members.’

To whom are PeaceWise accountable?

• As a charity, to the ACNC.
  • Its ‘Charity Tick’ is used on the website in support of you giving to them.  And rightly so, because it would be unwise to give to a charity that is unregistered.   The ‘tick’ also means Peacewise’s AIS is not overdue, and the ACNC has not taken any compliance action against it.
    • But no more than this.
• PeaceWise has gone beyond the charity tick and achieved accreditation with the CMA Standards Council. It is therefore entitled to display their seal – see the right-hand side of each page. For this is must abide by the Council’s  Principles and Standards of Responsible Stewardship.
• PeaceWise is also accountable for some things, as a company, to ASIC.
• Ministry comment: ‘As a Christian Charity (sic) we believe we are also accountable to God.’

1. The name on the ACNC Register is incorrect. It is ‘PeaceWise Ltd’, not ‘Peacewise Ltd’ [edited 12.03.18]. ↑
2. I agree with Randy Alcorn [Money, Possessions, & Eternity, Tyndale, 2003] when he says that ‘Any Christian leaders who resist financial accountability make themselves suspect.’ [page 425]. ↑
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. Given that this is in an ‘Annual Information Statement’, it is not unreasonable to think that the ACNC expects a description of what the charity did in the year that is the subject of the Statement, not just a description of what it does generally every year. ↑
5. I use the Pinnacle Financial Statements, respected in the profession as providing a very sound basis for producing compliant financial reports. To this I add an assessment of materiality (both quantitative and qualitative), where the users being considered are donors. ↑