Hi russell - and yet - still NO response re: the Doug Howlett money go round? Also no response re: the fact that the are trying to convince the public to view only certain costs to make their return on investment look better than 18%? No other charity does this.
So in summary I interpret Rick's comments as being "if you ignore our inconvenient costs like wages, costs of events etc, it turns our charities poor performance (20%), into great performance (94.5%). Awesome - using this approach means that there is no such thing as an underperforming charity anymore - all you have to do is ignore every single cost except for those of the program :) That being said, I guess the Epilepsy Foundation using an external fundraising agency that raised $2.8 million of which only $70,000 was given to Epilepsy after telemarketing costs, is no longer a problem. To use the Kids Can example, if we ignore the costs not directly associated with delivery of Epilepsy support services we can change the picture from only 2.5% of the raised funds going to services, to - what - something around 94.5% (like Kids Can?)
re: Doug Howlett Foundation. Does anyone know what happeneded to the $2,800 paid for the website? If Doug is living overseas and Julie and Karl are no longer working for the Doug Howlett Foundation then where did this money go? Is the website underconstruction? What if any work has been done on it to date? Also if Julie and Karl are no longer working for the Foundation does that also mean they are no longer Directors of the Doug Howlett Foundation?
Hi Rick - well done. You nailed it. I was trying to get my head around Rick's 'interpretation' of income vs expenditure with not much success. Facts are (as you pointed out) you cannot separate the convenient income from the inconvenient income, nor can you separate the convenient costs e.g.: programme costs from the inconvenient costs e.g.: wages, event costs etc. Every other charity in NZ (and business for that matter) understands this and doesn't try to put a more attractive interpretation on their figures. It is all or nothing. Either you run a charity on a reasonable cost basis (taking in ALL costs llike every other charity in NZ does) or you shouldn't be running a charity at all. I've lived in a few places around NZ over the years and have never heard any other charity try to "interpret" their figures like Kids Can have. Interestingly it's a shame Kids Can isn't a public company with shareholders. Imagine how awesome the dividends would be if they only used convenient income and costs to determine the companies performance and subsequent payout? LOL!
Something else as well... When adding the in kind donations to the level of services delivered to the children, you should compare apples with apples. How can we the public ever know whether or not the $760,000 worth of inkind donations Kidscan claimed was received for the programmes includes ONLY those items that directly support the programmes without an itemised list of what is included in the $760,000? I am not suggesting Rick is lying about the amount - rather - unless we see an itemised list, this amount could include all sorts of inkind support received by Kidscan that may or may not have anything directly to do with supporting the programmes e.g.: prizes for a charity auction. Apples with apples? What exactly did Kid Can include in the amounts listed in their 2008 accounts for programme costs and what does Kidscan include (specifically) in the claimed $760,000 amount? Interestingly one of the possible consequences of the light Julie and Karl's actions have brought onto Kidscan and the charity sector as a whole, is that we may see in future charities trying to "include" as many possible costs under the heading of "programmes" to make the books look better....
Something else I noted too. Rick was at pains to repreatedy make reference to certain costs which "are not intended for programme delivery" such as grants received for administration costs, when evaluating the percentage returned to the children. The thing is this. Every other charity in NZ has the ability (and do) apply for these same administration grants (which are a good idea as is getting in kind support). BUT!!! Many other charities are able to successfully keep their total costs (including admin grants) to an acceptable level and still deliver a good percentage return for services! Nor do they take the position of 'you should not include these costs when evaluating our percentage returned to services'. I am afraid that this position is a red herring. Certain things all charities have in common, and applying for admin grants and getting in kind support is one of them (indeed it is recommended). If other charities do not 'exclude' certain costs like admin grants when evaluating percentage return to services, then neither should Kids Can. Nor do other charities say 'oh but you also have to add in kind donations of blah blah when looking at our figures.' Other charities can "stand tall' purely on the merit of their audited annual accounts (which do include grants and don't include in kind donations). Kids Can's percentage return for services should be judged in exactly the same way all other charities (that like Kids Can deliver direct services as opposed to giving away money) are judged. By the way the majority of charities in NZ fall into the category of being direct service delivery providers from the funds they raise. So, back to square one. Evaulating Kids Can using the same standards other service delivery providing charities are judged (including those which do not receive government funding of which is the majority) still leaves Kidscan in the position of returning an extremely poor performance in all 4 years of its existence.
Careful anaylsis of Ricks comments leaves me with more questions than answers. For example - what about the Howlett Foundation? Doug's comments suggest that it was Julie and Karl who ran the Foundation. That being the case how do they explain knowingly taking approx $40,000 in salaries and only raising $28,000? Then taking a further $9,000 in rent (also paid to Kids Can). Also, to whom was the $6,000 in salaries paid by Invitation Only Events paid to - Julie? Karl? What happened to the $62,00 paid by Kids Can to the DHF? What was this for and where did the money go? How many other incomes are Julie and Karl receiving? How much are they being paid at Kids Can? I note with concern the many fundraising events the charity have and are runninng (events) which are high cost, demand high staff resources and return minimal income. We the public expect charities to make wise, prudent decisions about their fundraising activities always with an eye of returning a good profit. Looking at the figures offered by Rick don't seem to stack up either. Not being a numbers person myself I look forward to reading other contributors thoughts on this. I appreciate Rick taking the time to respond but I can't help but feeling a great deal of disquiet about Julie and her husband, and what else may be going on the we don't know about. Maybe the wise thing to do is invite the Kids Can Foundation to review their Board with a view of removing certain individuals (Julie and Karl) to clear the way for someone who has stronger understanding of how to run a business and no complicated double or triples incomes from sources which are yet to be explained adequaltely. That way the Kids Can Foundation can move forward and put all this business behind them.
I think perhaps the most interesting thing about the Kidscan situation is not just the Kidscan issue of what percentage went to the children, but that this situation considered together with the Doug Howlett Foundation and the disparity of income vs expenses (of which were paid the Julye and Karl). An explanation from Kidscan in regards to the debt the Howlett Foundation holds would (hopefully) explain why this debt has come to be especially in light of Kidscan's own Financial Policy which states:
There will always be two Trustee signatories on each cheque written
Any individual or closely related payments totalling $30,000 or over will need approval from the Board before payment
Any cheques for any of the above must be signed by one or two of the other Trustees dependent on amount
A financial report for the preceding period (two months) will be provided for each executive meeting
n annual budget will be decided by the Board in December each year and any expenditure over the budgeted amount must be approved by the Board
No overdraft facilities will be entered into without the written consent of the Board
Payment of GST and PAYE by the due date will be the responsibility of the Office Manager
Financial accounts will be prepared annually by an independent Chartered Accountant
An annual audit will be completed by April each year and an interim audit completed by September
All records shall be kept for a minimum of seven years in a secure setting
Back ups will be made of all financial documentation monthly and stored in a secure location off site
Hi Rick, would it be possible to ask to whom the $6,795 in salaries was paid to, as shown in the 2008 financial statement of Invitation Only Events? Also are the Kidscan people drawing salaries from any other (undeclared) sources? I read with interest with Ho5 story. Will anyone be actually answering the question re: exaplanation over how the Howlett Foundation was run as opposed to just saying "we don't work for that charity anymore?" Are Julie and Karl still on the Board of this charity?
Sorry :( It's just that as an Auckland business owner I have a great deal of trouble understanding how any charity can (DHFC) - justify higher outgoings than incomings, especially in light of the importance of returning a reasonable percentage to the cause it exists to support. In additional Kidscan's documentation refers to a policy of no debt, yet this appears to be the case with DHFC of which they are the Directors? I'm confused and am sure that like many other publicaddress followers, wait for clarification... PS: love your website - keep up the great work :) :)