Archived: SparkLit: mini charity review for donors

Mini charity review of The Society For Promoting Christian Knowledge Australia Incorporated (SparkLit) as an organisation that seeks donations online. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

(To see the situation last year, read this review.)

Are they responsive to feedback?

• When sent a draft of this review, they sent comments, then another comment in response to my reply. Where still relevant, these comments have been included below.

Is SparkLit registered?

• As a charity, yes.
• Other registrations:
  • As a South Australian incorporated association (A38977).
  • As a registrable body, in this case an association that operates interstate (ARBN 119 800 645)
  • RCF doesn’t have a licence to fundraise in the states that, according to the ACNC Register, it operates. Nor in any of the others that have a licensing regime^[1].

What do they do?

• Generally: see the website.
• In 2015, from the AIS 2015:
  • Text books and reference works were supplied to students, church leaders and libraries in Cambodia, China, Kenya, Myanmar, Philippines and Tanzania. Grants made possible the publication of books in Burmese, Chinese, Khmer, and Spanish. Training and encouragement has been provided for publishing professionals in Africa, Asia and Latin America.

Do they share the Gospel?

• No.

What impact are they having?

• Nothing found.

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

• If we define ‘direct’ as ‘Grants and donations…’ (in the AIS 2015) then it cost $167K to deliver $167K.
  • ‘Administration’ is therefore 50% of expenses.
  • ‘Employee benefits expense’, for one full-time and three part-time employees, is 38% of expenses.
  • SparkLit comment: ‘The primary benefit provided to our project partners is the training and mentoring delivered by the National Director. However, his salary and travel expenses are counted in our AIS as Employee Expenses and Other Expenses.’
    • Reviewer response: As not all the Director’s time and trouble would be on this work, an allocation would be required to revise the figure for direct costs.

Can you get a tax deduction?

• No

Is their online giving secure?

• PayPal is used, so yes.

Is their reporting up-to-date?

• Yes (right on the deadline, six months after their year-end).
  • 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 10 months ago.

Does their reporting comply with the regulator’s requirements?

• AIS 2015: No
  • No outcomes given.
  • Only ‘Government Grants’ and the total match the income figures in the Financial Report.
  • One business name missing.
• Financial Report 2015: Only if
  • you believe that it is reasonable for the directors to say that, for a charity operating in 17 countries, and two states, and with ‘Donations and bequests’ of $286K, there are no users, either current or prospective, who are dependent on its financial statements.

What financial situation was shown by that Report?

• The deficit was decreased from 4% of turnover to a surplus of 3%.
• ‘Cash and cash equivalents’ and ‘Financial assets’ total $952K. This is approximately three years’ worth of revenue. No explanation is given for holding this much.
  • SparkLit response: ‘Financial assets are held for two purposes. (1) A fund is maintained to provide interest-free loans to emerging publishers. (2) Cash prizes for the Australian Christian Literature Awards are funded by investment income. This enables the awards to be independent and free from any conflict of interest. Donations are not retained as financial assets. Money in our investment portfolio and loans fund has come from (1) bequests and (2) revenue generated by our defunct book publishing enterprise.
• No obvious concerns with the financial structure.

What did the auditor say about the last financial statements?

• He was unable to give a ‘clean’ opinion. He qualified the accounts on two grounds:
  • The directors of SparkLit had decided that it was ‘not practicable’ for them to establish any controls over donations until after they were entered in the books.
    • They do not say why SparkLit is one of a small minority of charities who are unable to do this. (What it means is that they, and the auditor, cannot be sure that all the money given to SparkLit made it into the bank account.)
    • SparkLit response: ‘Where possible, SparkLit directs donors to donate electronically. However, while representing SparkLit, the National Director occasionally receives cash donations. In 2015 he received $1840 in cash donations. Neither the directors nor the auditor are in a position to guarantee that cash received by the National Director is deposited into a SparkLit bank account. This is the reason for the first qualification.’
      • Reviewer response: An auditor never gives any guarantees; this qualification can be avoided.
  • Saward Dawson say that, because they weren’t the auditor last year, ‘we are not in a position to express an opinion on the comparatives for 31 December 2014’.
    • A different auditor is not sufficient reason under the Auditing Standards to issue a qualified opinion.

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

• Almost. One business name is missing under ‘Other Name(s)’.

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

• None – at least on the website.

Who are the people controlling the organisation?

• The names (and some faces) here on the website.
• Which is two less than is shown under ‘Responsible Persons’ on the ACNC Register.

To whom are SparkLit accountable?

• Membership of Missions Interlink claimed in the (website) footer. Confirmed. Missions Interlink has standards with which members must comply^[2].
• SparkLit is also accountable to the ACNC.

1. The law in this area is not straightforward and advice varies, so check with the charity before drawing any conclusions. ↑
2. For one opinion on the strength of this accountability, see the section Activities in this review. ↑