Archived: YWAM Medical Ships – Australia Ltd: mini charity review for donors

Mini charity review of Ywam Medical Ships – Australia Ltd (YMS) as an organisation that seeks donations. (Including the answers to the questions that the Australian charity regulator, the ACNC, suggests that you ask.)

Is YMS registered?

• As a charity, yes.
• Other registrations:
  • As a public company, a company limited by guarantee.
  • Only operates in Queensland but no fundraising licence there. Or, with the exception of Tasmania, in any of the other five states that have a licensing regime.
    • The law in this area is not straightforward – is an internet invitation ‘fundraising’ for instance? – and advice varies, so check with the charity before drawing any conclusions.

What do they do?

• Generally, from the website.
• More specifically, from the Annual Information Statement (AIS) 2015:
  • YWAM MSA is actively developing communities by addressing the health care and training needs in Papua New Guinea (PNG) alongside the priorities and vision of the PNG National Health Plan, PNG National Department of Education and Australia and PNG’s commitment to the Millennium Development Goals. YWAM MSA is implementing programs with its Medical Ship and land-based teams in rural PNG communities in association with key stakeholders and partners….
• For the detail of what was delivered under these programs, see the very good coverage in the Annual Report.

Do they share the Gospel?

• Not according to information on the website, or in the Annual Report.
  • Which is consistent with ‘Advancing religion’ only being one of four Entity Subtypes on the ACNC Register, YMS’s objects (in the constitution), and its funding by the Australian Government.

What impact are they making?

• YMS claim, in the Annual Report [page 3], that
  • Every dollar given to YWAM Medical Ships will produce a 300% return on investment, which means more lives helped.
    • No evidence found for this statistic.
• Except for possibly the above claim, no systematic evidence of impact was found.

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

• If you define direct costs as ‘the field’, then YMS say that the figure is 12%.
• Apart from not knowing the definition of ‘field’ in YMS, the expenses are not classified so as to allow a split between direct and indirect costs.

Can you get a tax deduction?

• Yes (see the last section in the ABN record).
  • But not, according to the donation page, for ‘outreach fees’.
    • There is no explanation for this exception.

Is their online giving secure?

• Eway is used, so yes.

Is their reporting up-to-date?

• Yes (but lodged a month late, seven and a half 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 over eight months ago.

Does their reporting comply with the regulator’s requirements?

• AIS 2015: Except for the absence of outcomes, yes.
• Financial Report 2015: No
  • There is no audit report.
  • YMS has a ship that cost $9.1 m plus the cost of the subsequent fit out as a hospital, yet there is no ship in the Statement of Financial Position.
    • Note 18 in the Notes to the Financial Statements says that the ship ‘is recorded as an asset in the books of YWAM PNG Ship Ltd’, but the only explanation is that the ship was purchased by YMS ‘on behalf of YWAM PNG Ship Ltd.’
  • The only asset relating to the ship is an intangible asset called ‘Right to Use Agreement – YWAM PNG Ship Ltd’ for $3 m.
    • There is no mention of this intangible in the policy Note on intangibles, nor is the valuation basis identified.
  • There is a loan to Suncorp for $2.41 m, presumably against the ship.
    • The terms of this loan are not disclosed.
  • There is also a liability of $3.21 m for ‘funds held on Trust’, described in Note 18 as ‘the donations that were received during the period up to the date of the purchase’.
    • There is no explanation of the relationship of this liability to the either the assets in each company’s books, or the loan.
    • Only $1.10 m of financial assets are held by YMS, well short of the funds held in trust.
  • There is no explanation why, if ‘All of YWAM MSA’s staff, including senior project managers, are full-time volunteers’, YMS
    • has, according to their AIS 2015, three casual employees, and
    • incurred $2.23 m ‘Employee benefits expense’.
  • The ‘Basis of preparation’ section in Note 1 first says that ‘general purpose financial statements have been prepared’, but contradicts this three paragraphs later by saying that the Report is ‘a special purpose financial report’.
  • The ‘Related Party Transactions’ Note (number 12), does not mention the dealings (see above) with YWAM PNG Ship Ltd.
  • It appears from Note 12 that $400K was donated to YWAM Townsville. There is no explanation of this item.
  • YWAM Townsville is an incorporated association with five directors, yet YMS says, without explanation, that it is ‘controlled by a [YMS] director and his wife’ (presumably Jared and Rebekah Hoover).
  • YMS owns the business name YWAM Medical Ships PNG. Is YWAM PNG Ship Ltd a subsidiary? The accounts do not disclose the relationship.

What financial situation was shown by that Report?

• YMS recorded a deficit again – albeit reduced from $832 K to $144K.
• They have a large working capital deficit (short-term assets less short-term liabilities). This threatens the going concern assumption.
• The longer term financial structure is more sound.
• The high level of liabilities means that equity ($311K ) is only 2.2 times last year’s deficit.

What did the auditor say about the last financial statements?

• Although other documents in the Financial Report show that an audit was performed, the audit report has not been included.

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

• With one minor omission – YWAM Medical Ships PNG under ‘Other Name(s) – yes.

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

• None.

Who are the people controlling the organisation?

• The people shown when you roll down here.
  • Who are accountable to the members of the company.

To whom are YMS accountable?

• Here’s their answer, a FAQ:
  • As a Company, YWAM MSA has a Board of Directors which is accountable to its members. YWAM is also a signatory on the World Relief Code and a member of Missions Interlink, and all medical volunteers carry PNG medical registration. There are a number of external accountability bodies as well, which cover our ship and medical operations. All services and findings are reported to the PNG Department of Health
    • Membership of Missions Interlink confirmed.
      • For one opinion on the strength of this accountability, see the section Activities in this review.
    • Missing: the ACNC
    • Incorrectly claimed in the footer of the website: a signatory to the ACFID Code of Conduct.

Are they responsive to feedback?

• When sent a draft of this review, Jennifer Rentsch¹ sent this response:
  • ‘I have taken time to read through the mini review which you have undertaken on YWAM Medical Ships Australia. 

There are substantial errors in your report due to a lack of understanding of the supporting legal structures of the organisation. In that regard, we would welcome any donors to contact our office directly for any questions or information they may require.’ 

• Having confirmed that I had described the legal structure of YMS correctly (a company limited by guarantee), and not being able to find any errors in the review, I asked Jennifer for her help. She did not respond.
  • I remain willing to correct any errors.

¹ Who was added to the list of responsible persons after the review.