World Hope International Ltd: charity review

This is a review in the series ‘Members of Missions Interlink. Missions Interlink is ‘the Australian network for global mission’^[1]. ‘World Hope International Ltd’ is one such member, an Associate.

Charity response

Both Members and Associates have to accept a set of standards, the introduction to which includes this statement:

‘World Hope International Ltd’ ‘recognises the importance and value of listening and responding to concerns and complaints.’ I sent them a draft of this review. I got an automated response from Ruth Tomas saying that she would respond next week, but no response was received.

Donors

‘World Hope International Ltd’ is an organisation that seeks donations from the public.

The ACNC, in their article, Donating to Legitimate Charities, gives “some things to consider to help you make sure your donation is going where it is intended”:

1. Check the charity’s name.
2. Ask for identification from anyone seeking a donation.
3. Be careful of online requests for donations.
4. No tax deduction doesn’t mean the charity is not a legitimate one, and
5. Find out more about how the charity says it uses donations

Here’s the results for ‘‘World Hope International Ltd’’^[2], with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?^[3]

1.  There is a registered^[4] charity in that name (WHI).

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2.  There is nothing to indicate that WHI uses third-party fundraising agencies.

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3.  The web address begins with a closed padlock symbol, so the website is secure [the ACNC article above^[5]]. But there is no mention of the security of your information on the giving pages.

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4.  WHI’s ABN record says that it is entitled to receive tax-deductible gifts. The donation process doesn’t mention tax deductibility, but if you search you will find the claim in the footer.

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5.  The use of your donations

As context, read here what WHI do.

The audited account of how donations are used is WHI’s Financial Report 2019 on the ACNC Register.  Do you provide or give things to, receive things from, or have oversight of, or review, of WHI? Perhaps you intend to donate or are one of the donors responsible for the ‘Donations and bequests’ figure of $222K [Annual Information Statement (AIS) 2019]? Or one of the 14 staff? [AIS 2019]. If so, can you ring WHI’s office and request that they prepare financial statements that answer the question or questions you have about the charity? I think not. You are therefore ‘potentially interested in the information provided in general purpose reports’^[6].

You are therefore in the wrong place – I only have access to the published accounts of WHI, and the directors, with the agreement of the auditor^[7], have again said that you don’t exist:

This entitles them to avoid disclosure, among other things, of subsidiaries and related party transactions (an ACNC expectation).

Even ignoring this issue, there are deficiencies in the accounts:

• The auditor, Jason O’Connor, has issued a ‘clean’ audit opinion even though the directors admit to not having any internal controls over the company’s revenue (‘income’) prior to the bookkeeper entering information in the ‘accounting records’.
• It is likely that, by the inclusion of ‘Committed Project Expenditure’ in Current Liabilities, liabilities are overstated by $75K (1152%), and expenses by a similar amount.
• There are only five Notes in the Notes to the Financial Statements, well short of the number required to explain the accounts.
• There is no explanation for the distinction made between ‘Operating income’ and, by implication, non-operating income.
• ‘Operating income’ – 39% of ‘Income’ – is divided into four items:
  • Who pays WHI an ‘Administration Fee’, and what for?
  • What is ‘General’?
  • Why would WHI USA be paying WHI?
  • Who are the ‘Partners’ who are paying WHI, and what are they paying for? (The figure was zero last year.)
• ‘Grants’ have been reclassified from last year without explanation.
• There is a Note on ‘Cash and cash equivalents’ yet there is no such item in the accounts.
• They incorrectly say that the surplus and comprehensive income are ‘attributable to the members’.
• The inclusion of cents in the figures – an unusual practice – detracts from the understandability of the accounts.
• The headings in the Statement of Comprehensive Income are incorrect.
• Three of the times in the Statement of Financial Position are misnamed.
• Total expenses have not changed greatly over last year yet
  • ‘Advertising and promotions’ has increased from $4K to $18K without explanation.
  • ‘Occupancy costs’ has gone from zero to exactly $10K without explanation.

Use the accounts with this knowledge.

Cash spent

This is the only information about where the cash went on operating activities (with the figures for last year in the second column):

Not helpful.

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Resources consumed (i.e. accrual)

This is how the activities translated into expenses greater than $15K:

‘Project payments’ $145K

‘Employee entitlements’^[8] $77K

‘Advertising and promotions’ $18K

There is no information on the destination of the ‘Project payments’^[9]. Not helpful.

There is nothing in the Financial Report 2019 on how WHI ensures that (a) the money reaches the overseas organisation, and (b) it is used for the purposes given.

Assuming that there have been no changes to the board from 19 August 2019, the day the accounts were signed, these are the people responsible for the 2019 accounts.^[10]

Annette Dobson

Dallas Thomas

Michael Woodrow

Rex Rigby

Timothy Weatherall

1. And a means for a Member to get income tax exemption when it might not otherwise be available. ↑
2. See here for the previous review. ↑
3. A section in the article, Donating and Volunteering:
   • Focus on the nature of the charity’s work, its beneficiaries and the impact the charity is having in the community.
   • Is it clear what the charity is trying to achieve and how its activities work towards its objectives?
   • Would you like to spend your money, or time if volunteering, to support these objectives?
   • Is the charity being transparent about its activities?

   ↑

4. The ACNC implies, therefore, that it is a ‘legitimate’ charity. But this is not correct – as the ACNC itself points out, registration is voluntary. ↑
5. The ACNC’s information (in its article above) is out-of-date. ↑
6. From Objective of General Purpose Financial Reporting (SAC2), www.aasb.gov.au ↑
7. Jason O’Connor CA. ↑
8. This should be ‘Employee expenses’. ↑
9. ↑
10. The directors are accountable to the members. The number of members is not disclosed. ↑