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YWAM Newcastle

This is a review of YWAM Newcastle.  Seeking money (both from students and donors) as it does, it would have been a candidate for a review anyway, but now it’s in the news, first as part of the YWAM movement, and now itself.  It is also the owner of this mess.

Donors

The charities’ regulator, 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 organisation’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.
  5. Find out more about how the charity says it uses donations.

Here’s the results for ‘YWAM Newcastle’, with #5 supplemented by the essentials of the ACNC’s What should I consider when deciding which charity to support?[1]

Question 1

A search of the Register of charities for ‘YWAM Newcastle’ gives a registered charity in the name YWAM Ships Newcastle LimitedExpand ‘YWAM’ in the search and you get the registered charity,  Youth With A Mission Newcastle Incorporated (YWAMN)[2].

Question 2

There is nothing to suggest that YWAMN to use door-to-door or street fundraisers.

Question 3

The web address begins with a closed padlock symbol, so the website is secure.  The ‘Donate’ page says that ‘This is a secure SSL encrypted payment[3].

Question 4

YWAMN is not itself a deductible gift recipient[4][iv] but an unnamed fund that it operates is.  However, the fund is not mentioned on the ‘Donate’ page[5].

Question 5  How donations are used

The context

Values:  see ‘Community Values’ in the YWAM Newcastle Staff Handbook[6]

‘Ministries’: ‘Youth Street’, ‘YWAM Ships Newcastle’, and ‘Rahab Ministries.’[7]

Sharing the Gospel[8]?

Yes

How activities translated into dollars spent

The audited account of how donations are used is the Financial Report 2020 on the ACNC Register.

Included in that Report is a signed declaration by the Committee of YWAMN that the accounts

But the Committee (see below for who they were) have made a false declaration (and the auditor has given an inappropriate opinion):

  • It is impossible to assess the accounts because the Committee, in the Notes to the Financial Statements, give contradictory information about what reporting framework they chose, first saying in Note 2 that the financial statements were ‘special purpose financial statements’, then three paragraphs later saying that they were ‘general purpose financial statements.[9]
    • If they are meant to be special purpose statements, then the size and complexity of YWAMN means that this was an inappropriate choice[10].
    • The Committee also contradict themselves in the declarations they include in the Financial Report: ‘Reduced Disclosure Requirements’ in one versus ‘This special purpose financial report’ in another (Statement by Members of the Committee).
    • It is both incorrect and confusing to include two declarations.
  • The Committee doesn’t mention of the fact that YWAMN control two other charities, YWAM Ships Newcastle Limited[11] and YWAM Tahlee Limited[12].
  • Without explanation, the Committee shows both a $300K loan to ‘YWAM Ships Newcastle’ and a loan from ‘YWM Ships Newcastle’.
  • The ‘related parties’ disclosure (Note 15) says that

But YWAM Ships Newcastle, a ‘related party’, records that $533K of loans by YWMN are interest-free, imply that no repayments are required, and say that YWAM will lend more.[13]  Yet there is no mention of these non-commercial terms by YWAMN.  (In fact, there is no information at all about these loans.)

  • They show transactions and balances with related parties without identifying those parties.
  • There is a material mistake in the additions in the Statement of Cash Flows.
  • No details are given for the $3.31 million of borrowings:

  • Additions to the building are not accounted for correctly.
  • Contrary to both its own accounting policy (Note (e)), and the Accounting Standards, buildings are not depreciated.[14]
  • YWAMN says, in the Notes, that it uses ‘the revaluation model’ for valuing land and buildings, then immediately contradicts that, talking about ‘acquisition costs’.[15]
  • It’s classification of ‘borrowing costs’ is both incorrect and inconsistent with its own accounting policy (Note 2).[16]
  • The Committee gives insufficient explanation of the expenses[17]:

The auditor

Despite the above, the auditor gives a ‘clean’ opinion.

  • He includes a paragraph applicable to a qualified opinion – but nothing to do with any of the above things –[18][xviii] – yet doesn’t qualify his opinion.
    • This paragraph shows that the Committee have been additionally irresponsible in not implementing internal controls for ‘donations and tithes’.

People responsible

From the Committee’s Report [Financial Report 2020], these were the people responsible for the accounts:

David Stephenson

Sarah McCutcheon

Julianne afPetersens

All three are staff members of YWMN.  This lack of accountability is typical for YWAMs, documented by us in reviews, and recently by Ministry Watch.

And the auditor was Neil Watson, FCA, KLM Accountants.

Since signing the accounts, David’s wife, Carolyn (Carrie) Stephenson, has joined the Committee.

Question 5:  How their money is used

As can be seen from the above, the YWAMN Committee don’t give you a report on which you can rely.

This failure correlates with trouble in another, more important, area of their operations.

Impact

Nothing on impact was found.

YWAMN’s response

Their Staff Handbook says that they ‘encourage openness and transparency’:

We sent them a draft of this review. They…did not respond said, via email, “Thankyou for your correspondence. The Directors have undertaken a review of the financial statements you mentioned, with our auditor. We take your comments under consideration.” [Edited 4 April 2021].

 

 

 

  1. 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? [A section in the article, Donating and Volunteering].
  2. A charity that had its registration revoked in 2015:
  3. Better practice is to also include at least the logo of the provider of the security.
  4. ‘Will my donation be tax deductible?’ YWAMN’s Register entry.
  5. On the ‘Donate’ page, you can only specify a person as a recipient, but on another page – not linked, a ‘Building Account’ (presumably the fund) is one of the options:
  6. To find this you will have to do a Google (or similar) site search:  site:ywamnewcastle.com staff handbook.
  7. From ‘Ministries’ in the main menu.
  8. ‘When Helping Hurts by Brian Fikkert and Steve Corbett says this about sharing the Gospel: ‘A host of contextual issues determine the best manner and the appropriate time to present the gospel verbally, particularly in militant Muslim or Hindu settings. But without such a presentation, it is not possible for people to be personally transformed in all their relationships, which is what poverty alleviation is all about [Kindle Locations 1262-1264, Moody Publishers].
  9.  The evidence for that conclusion is their control two other charities (see above), a turnover of $1.31 million, ownership of multiple properties, and this information in the YWAM Newcastle Staff Handbook:
  10. https://ywamnewcastle.com/ministries/

  11. https://ywamnewcastle.com/locations/
  12.  From that charity’s Financial Report 2020 (ACNC Register):
  13.  Note 10:
  14. [xv] Note 1(e):
  15. Statement of Profit or Loss and Other Comprehensive Income.  There is information about the composition of ‘Other’ in a Note, but it is not linked from the Statement of Profit or Loss…, and leaves $544k unexplained [Notes to the Financial Statements].
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