100% of your tax deductible donations to the Primary Club reach the recipient
The Honorary Treasurer of The Primary Club of Australia has written a report explaining that 100% of your tax deductible donations to the Primary Club, as defined by the ATO, reach the recipient. Not one dollar of these funds is used in the administration, raising of funds or publicity. Very few charities can make that claim. We invite you to read this report and learn more about what the Primary Club does with your donation dollar. Click here to download the Primary Club of Australia report - “Good intentions – but where is the money trail?”
“Good intentions – but where is the money trail?”Members of the Primary Club of Australia Inc (“PCA”) will probably have seen the article in the Sydney Morning Herald (“SMH”) on Saturday 27th August, 2011. For those who have not seen the article the following link provides access to the relevant article on the SMH website. http://www.smh.com.au/national/good-intentions--but-where-is-the-money-trail-20110826-1jehm.html This is the second in a series of articles that have addressed some of the perceived shortfalls in the “not for profit” sector. The first addressed the issue of how much of the dollars raised actually reaches the actual recipient of charity. The current investigation deals further with the wider issue of transparency of information. The Committee of the PCA believes it is in the interests of our members and other stakeholders to comment further on these articles. In this memorandum we will address:
- Donations reaching the recipient of aid: and
- Transparency of information.
1. Donations reaching the recipient of aidThis was the thrust of the first series of articles concerning the percentage of “donations” that ultimately reach the recipient of aid. In particular, there has been comment about the percentage of revenues that charities spend on administrative fees, revenue raising and publicity. The PCA responded earlier to this report and our statement already appears on our website. The Committee believes that it is in the interest of our members to repeat our views that were expressed earlier. In the recent article presented in the print media, rough comparisons were made between various well known charities. It is possible some conclusions could be drawn about the effectiveness of some charitable operations from these statistics. The Committee of the PCA reviewed the original article and has made the following assessment :
- The information provided in this article was extremely basic;
- There was insufficient information to accurately determine how individual charities raised their funds; and
- To draw any conclusions comparing the effectiveness of one charity against another was fraught with unacceptable levels of margin for error to render the exercise worthless.
1.1 Types of RevenueThe PCA has three main methods of raising revenue :
- Event Revenue
1.1.1 SubscriptionsSubscriptions are levied on an annual basis to all Members. These funds are deposited to our general operating account and are used in the running of the PCA. In particular, these funds are used to pay wages and associated costs of our Administrative Secretary, without whose efforts the PCA could not operate effectively. In addition, these funds are used in the general administration of the PCA, such as:
- Keeping Members up to date through the printing and distribution of newsletters, annual reports and the like;
- Providing telephone and internet facilities for communication with Members;
- Effecting necessary insurances to cover our events.
1.1.2 DonationsThe definition of donations is governed by rules set out by the Australian Taxation Office (“ATO”). The ATO’s definition is quite limited. However, in brief, to qualify as a donation the following must be met:
- It must be in the form of cash or goods and/or services;
- The donor must receive nothing in return for providing the donation; and
- There can be no compulsion in providing the donation.
- The fines Members pay when Australian cricketers attain a “Golden Duck” or “Primary” in international matches;
- Donations made by our Golden Duck Donors (“GDD”). To qualify as a GDD an annual donation of a minimum of $1,000 is required; and
- Donations received as part of one of our events. For example, at the Marathon Cricket Event last year donations were received from a number of sources including the NSW Government, Cricket NSW, and various individuals.
1.1.3 Event RevenueThis covers such type of revenue as:
- Registration or entry fees for functions, dinners, and other events such as our golf days;
- Raffles and auction items.
1.2 ConclusionIn summary, the Committee would like to advise Members, and any other stakeholders, of the following situation:
- All donations, as defined by the ATO, are used exclusively in our charitable works. Not one donation dollar goes towards the administration or running of the PCA;
- The PCA seeks to attract sufficient members whose annual subscriptions cover all the administrative and running costs of the PCA; and
- The PCA seeks to run distinctive and successful events (staffed on a voluntary basis) for our Members and their guests, which maximize profits for the betterment of others through additional funds being made available to other charities through the Trust Account.
2. Transparency of informationThe later media articles also addressed the issue of the variations in information made available by the various charities and foundations. The PCA believes that it provides full disclosure to its members and other stakeholders as a result of the following.
2.1 Department of Fair Trading (“Fair Trading”)The PCA is registered as an Incorporated entity through the NSW Government’s Department of Fair Trading. Each year we are required to submit our annual accounts to Fair Trading as part of the annual re-registration process.
2.2 Audited AccountsEvery year our financial accounts are audited in accordance with the guidelines as set out by the Institute of Chartered Accountants (“ICA”). We disclose in our financial statements
- The revenue and costs for every event that we run each year. All members and other stakeholders can see at a glance how much profit contribution is made from each event;
- A list of donations paid during the past financial year with comparative information to the previous year; and
- A list of commitments that are unpaid at the end of that financial year