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The Australian Navigators Limited: 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Care:  At least some of the information about this charity is no longer current.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 charity review of The Australian Navigators Limited (AN), an organisation that seeks donations online, and is a member[1], and subject to the accountability of, Missions Interlink. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

For the previous review, see here.

Is it responsive to feedback?

  • There is no invitation, on the website, to submit feedback or complaints.
    • Ministry comment: ‘We are in the process of adding a complaints lodgement ability to our website.’
  • Accountability is not mentioned on the website.
  • I sent them a draft of this review. Their comments are included throughout.

Is AN registered?

  • As a charity, yes.
    • As a public company (a company limited by guarantee).
      • Although such a company has members, in the case of AN membership is only open to a ‘staff member’ (someone holding a paid or unpaid staff position).
  • It does not have the necessary provisions in its constitution to permit it to omit ‘Limited/Ltd’ at the end of its name. Nor does it have a truncation or rearrangement of its name registered as a business name. So, it should be using its full names in dealings with the public. Not like on its website, Navigators and The Navigators, or on (Facebook), Navigators Australia.
  • It has, however, registered the business name Solid Rock Ministries
  • AN operates, per the ACNC Register, in Australian Capital Territory, New South Wales, Queensland, Victoria, and Western Australia.
    • How does this fit with the claim on the website that ‘Our ministries and contacts are spread throughout Australia’? It still doesn’t have a fundraising licence in Western Australia, a state that has a licensing regime. (The AIS 2017 says that it is ‘Pending’.)
      • Ministry comment: ‘We applied to WA licensing authority and they wrote back saying we don’t need one in WA as we are a religious charity.’
  • They have an internet invitation to give. Their application for a fundraising licence is in Tasmania is also ‘Pending’ (AIS 2017)[2], but there is no mention of South Australia, the other state with a licensing regime for charities.
  • AN operates overseas, per the ACNC Register, in Indonesia and United States.
    • No overseas countries are in the list of locations, but if you look for ‘Missions Overseas’ under the photos you’ll find the four couples involved.

What do they do?

  • It could be clearer, but it appears that its workers make disciples and then train those people to make disciples. See ‘Calling’ on the website.
  • It does this in ‘communities’.
    • Compare their activities to what your local evangelical church and its members are doing (or at least should be doing).
    • Here’s how Australian Defence Force Academy describes what AN does there.
  • AN is part of The Navigators Worldwide Partnership.

Do they share the Gospel[3]?

  • From the descriptions here, many of the workers do this as part of their job; one would hope that all do it as part of their life.
    • Ministry comment: ‘Indeed and that is exactly what we try to help people to do – share the gospel as part of their everyday life.’

What impact are they having?

  • They put stories on their website to illustrate the impact of their work.  I believe the systematic measurement of impact (including scientifically) provides a better guide to impact.
  • There is a section in the Directors’ Report ‘Key Performance Measures’, but it just says that ‘quantitative and qualitative benchmarks’ are used.

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

  • The expenses are not classified to allow this estimate.

Do they pay their directors?

  • It’s not prohibited in the constitution.
  • There is no ‘Directors’ fees’ in the expenses.
    • Ministry comment: ‘We don’t pay Directors.’

Can you get a tax deduction?

  • No

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

  • Where Most Needed’
  • ‘Specific Person’
    • 33 named individuals/couples
  • ‘Specific Project’
    • ‘Growing Capacity’
    • ‘ISM Melbourne Ministry’
    • ‘ISM Sydney Ministry’
    • ‘Jephcott’s Car’
    • ‘Keep the Labourers Labouring’
    • ‘Military Ministry’
    • ‘Student Ministry’
      • The second, third and fourth of these are not described on the website. The last two are two of the ‘communities’ (see above). ‘Keep the Labourers Labouring’ was a six-week campaign that finished in 2016.

Is their online giving secure?

Where were your (net) donations sent?

  • The AIS once again says that no grants or donations were made. How does this fit the collection of money for projects (above)?

Is their reporting up-to-date?

  • Yes (six and a half months after year end, the same time as last year.)
    • The next financial report is due by 31 December 2018. Before that the financial information on the Register will be up to 18 months out-of-date. You may therefore need to ask for more up-to-date information.

Does their reporting comply with the regulator’s requirements?

  • AIS 2017: No
    • A business name (Solid Rock Ministries) is missing.
    • The ‘Description of charity’s activities and outcomes’
      • is not particularly about what was done in 2017.
      • does not mention outcomes.
    • Some of the ‘Financial Information’ again doesn’t match what is in the Financial Report 2017.
    • The Financial Report 2017 has been lodged as an ‘Annual Report’.
    • The number of staff (75) does not match the number given on the website (120).
  • Financial Report 2017: No
    • Again this year, in the Statement of Profit or Loss and Other Comprehensive Income:
      • A large proportion of the expenses is unexplained. This includes 27% for ‘Ministry Expenses & Costs’. (The entire charity is a ‘ministry’, so this title discloses nothing.)
      • 97% of the revenue came from donations. There is no breakup of this figure, so a match, even at the fundamental level of the areas for which money is sought, ‘Where most needed’, people, and projects, is not possible.
        • AN seeks money for 33 individuals or couples on the website (via ‘Give’ and ‘Meet the Staff’).
          • We are not told whether the money donated to a person (or couple) goes to AN to offset the benefits AN gives the person, or is just handed on to them.
            • Ministry comment: ‘It goes to offset their superannuation guarantee costs, their ministry expenses like attending our national conference, a 15% admin fee and their salary.’
          • 47 individuals or couples are shown under ‘Meet the Staff’.
          • Why, when they appear to be doing the same work, do 14 staff not qualify for the ‘Give’ button?
            • Ministry comment: ‘They are voluntary staff.’
          • The AIS 2017 gives the number of staff as 75. How does this relate to the above figures?
            • Ministry comment: ‘Some of the couples in the meet the staff are both staff and some couples only one is.’
        • Why is the cash amount of earnings on investments shown in the accrual statement?
        • ‘Other Income’ is a revenue item in the Statement of Profit or Loss…, but is not included in the Note supporting revenue.
    • The figure for ‘Other Income’ does not match the figure in the breakup in the Notes.
    • Without explanation, the revenue and surplus figures for 2016 do not match what was disclosed last year.
    • The loss on foreign currency is disclosed as revenue.
    • Again this year, in the Statement of Financial Position:
      • 94% of the $297K liabilities are in one item, the unexplained ‘Staff Reserves’.
        • ‘Reserves’ are not a liability, but a part of equity.
        • Last year, this item was called the (also unexplained) ‘Ministry Expense Account’.
      • There is no explanation for why $137K is kept in a US bank account.
      • Inventories are valued inconsistently with the policy in Note 1. (This year it is ‘written down value’; last year it was ‘cost’.)
      • There is no explanation for why a ministry with a $2.02 m turnover would hold 100% of its $892K non-cash funds in a moderate to high risk asset class.
        • $892K is an 11% increase on last year. There is no explanation for this increase. It also increased 11% last year.
      • The type of financial assets is not disclosed. (This is even though the types are described in Note 1.)
      • Restricted funds are not disclosed.
    • The auditor signed his report before the directors signed theirs.
    • There is no explanation for the 72% increase in the item that comprises 94% of the liabilities (see above).
    • There is no explanation for the 443% increase in the amount held in the US.
    • Again this year, in the Notes to the Financial Statements:
      • There is no Note on foreign currency.
      • Five of the usual policy Notes are missing.
      • Neither commitments nor contingent liabilities are disclosed.[4]
      • Were there any transactions with related parties?
    • The use of cents in the three of the four of the statements is unhelpful.

What financial situation was shown in that Report?

  • Last year a gain on using foreign currency contributed $12K to the surplus. This year AN lost, without explanation, $44K.
  • Last year’s surplus of 6% of revenue was maintained.
  • ‘Employee Benefits Expense was declined marginally (from 64% to 63% of expenses), while the (still) unexplained ‘Ministry Expenses & Costs’ increased marginally (26% to 27%).
  • From Note 14, it appears that the National Director is paid a mere $24K.
  • ‘Other Expenses almost doubled. It is now 4% of the total.
  • Short-term structure: current assets are over two times current liabilities.
  • Long-term structure: there are no non-current liabilities but $892K of ‘Financial assets’ (see above).

What did the auditor say about the last financial statements?

  • The auditor, Glenn McEwen, of ThomasGLC, issued a ‘clean’ opinion.
  • When assessing how much comfort to take from this
    • read the ‘Financial Report 2017’ section above, and
    • read here and here.

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

  • No
    • The business name is missing.
    • ‘Who the Charity Benefits’ is blank.
    • The Financial Report has been lodged as an ‘Annual Report’.

Who are the people controlling the organisation?

  • Effectively, this is the Board of Directors.
  • Which is the same as the list on the ACNC Register (under ‘Responsible Persons’):
  • Whether the director is a ‘Member Director’ or a ‘Non-Member Director’ is not disclosed.
  • It appears that, as usual, significant powers have been delegated to the National Director, Grant Dibden (the constitution is silent on such delegation).
  • The website – but not the constitution – says that he is assisted by two other bodies:

To whom is AN accountable?

  • Not mentioned on the website, but it is a member of Missions Interlink.
    • For one view on the strength of this accountability, see the section Activities in this review.
  • As a registered charity, AN is accountable to the ACNC.
  • And still for some things, to ASIC as a company.
  • Members can hold directors accountable.
    • AN include a Directors’ Report in the Financial Report 2016, but the number of members, usually available from that report, is not included.
    • Only staff can be a member. The National Director, the supervisor of the staff, reports to the Board, which in turn reports to those staff.

 

  1. Under a slightly incorrect name.
  2. They were working on these applications at the time of the last review.
  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. 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.
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