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White Ribbon Australia: going, going, gone

Charity registration voluntarily revoked, effective 2 October 2018.  ABN is held by Communicare Inc.

White Ribbon Australia is, at last count, a $6.07 million turnover Australian charity. Although you wouldn’t know from its ACNC Register entry[1], White Ribbon Australia is now a charity that has ‘gone broke’. The directors closed the doors on 3 October, saying that ‘This decision became necessary following an analysis of the organisation’s future sustainability.’[2]

This assessment of viability came just over 11 months after the directors, faced with reporting a deficit of $841K[3] and a working capital deficit of 16%, said that the doors should stay open. They said that ‘the company is a going concern’ (see below). This is the accounting definition[4] that should have guided them:

So, no intention to liquidate or stop operating, and no need to do so. Fair enough – they were in the best position to make that judgment.

But did they use the right information? They got comfortable with making a declaration that ’there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable’, by making an adjustment to the reported figures[5]:

Why adjust for 100% of the unearned income ($1.82 million) when it is only $770K that is ‘not refundable”?

If the directors followed the Accounting Standards, then their assessment of going concern did not reveal any ‘material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern[6].’

These were the directors who made the decision:

Ian Carter

Trish Egan

Nick Mazzarella (Is it this Nick Mazzarella?)

Carole Molyneux (the Chair of the Audit and Risk Committee)

Sean O’Brien

Bernard Pearce

Victor John Rosewarne

Vanessa Brown

(If it wasn’t for this news, one might wonder whether Nicholas Cowdery’s resignation three weeks before the directors signed the accounts had something to do with what was going to be in them.)

Anyway, 11 months later and the directors were no longer comfortable with calling White Ribbon Australia a going concern. The question is, when did they first become uncomfortable? Given the threat to the continued operations, they should have been monitoring the situation closely. Were they? When did things go pear shaped?

Whenever it was, they were soliciting donations on the website right up to the charity’s demise[7]. Of course you wouldn’t have known then that it was going to go broke, so you could have, if you had not been put off by their methods[8], sent money. But if you’d looked at their financial statements[9] first (or got somebody to do it for you), would you have had second thoughts? Here are the main things that would have come up in one of my reviews:

  • The negative working capital position (see above).
    • This can be OK in a charity, but when it has slipped from positive (+120%) to negative (-84%), it deserves an explanation – especially when combined with a drastic reduction in profitability.
  • The turning of a 5% surplus into a 14% deficit. Again, it can be OK, but when it leaves the equity so low, it’s not.
  • The adjustment by the directors – some would say creative adjustment – to the reported working capital (see above), allowing them to be comfortable in valuing the company’s assets as if the company would continue to trade ‘for the foreseeable future’ (see above).
  • The need to borrow for the first time (or at least from records on the ACNC Register began in 2013). A $600K ‘facility’ was granted by St George, and $280K drawn in the last month of the financial year. On its own this is not necessarily an issue, but in this situation, it deserves an explanation.
  • A 37% increase in ‘Employee expenses’[10] despite static revenue, and almost the same ‘full time equivalent’ staff.
  • Seven ‘key management personnel’ out of 43 non-casual employees and paying each of them an average of somewhere between $147K and $175K[11].
  • The resignation of nearly half the directors during the year.
  • The continued lack of disclosure for a large part of the expenses (‘Other administrative expenses’ were 27% of total expenses in 2018, 34% in 2017).
  • The inclusion of $525K of ‘Cash’ in long-term assets.
  • The decline in ‘Sales of merchandise’ from $1.20 million to $724K, and the decline in ‘Myer Stores Community Fund revenue from $559K to $129K.
  • The introduction of an intangible asset ‘Software’ ($276K). The alternative would have been to expense it. Again, not necessarily wrong, but in this situation it’s worthy of a question.
  • Taking an extra three and a half months over the previous year to lodge the accounts with the ACNC.


Please do your due diligence before giving.



  1. ASIC’s register records the company as being ‘Under external administration’, but there is nothing on the front page of the ACNC record:
  2. From this statement, posted on the website:
  3. This was a $1.41 million turnaround from the previous year and 14c of every dollar of revenue. Very serious figures.
  4. Framework for the Preparation and Presentation of Financial Statements, aasb.gov.au.
  5. In the Notes to the Financial Statements, Financial Report 2018, ACNC Register.
  6. From paragraph 25 of AASB 101 (www.aasb.gov.au):
  7. Regular donations are still (8 October) being sought. You’ll be due a refund.
  8. They seemed to be pretty good at shooting themselves in the foot.
  9. The latest financial information at that time was the Financial Report 2018 on the ACNC Register.
  10. From 51% to 58% of total expenses.
  11. The amount spent on this category of employee rose from $228K to $1.03 million.