Understandability and Transparency of the Financial Statements of ...

The transparency of their organisation acted as a deterrent for one religious organisation
that was constituted as a charitable trust but had chosen not to register:
It [registering as a charity] wouldn‟t provide any more advantages to the Trust
… but would place a disproportionate amount of compliance in terms of
disclosures and filing and so on, which we‟re not that geared up to do.
(Interviewee 6 BT)
In England, Morgan (Morgan, 2009a, 2009b) has been rather loud in his denouncement
of these religious organisations saying that:
It would be absurd if churches are to be allowed indefinitely to claim the tax
benefits and reputational benefits of charitable status without meeting the same
standards of accountability as other charities (Morgan, 2009b, p. 346).
It would be anachronistic for Christian churches to continue to receive the
benefits of charitable status without the normal standards of accountability
(Morgan, 2009a, p. 361).
The situation in New Zealand has changed with several religious organisations choosing
to register as charities perhaps without fully understanding the impact transparency
would have. This was particularly seen in the case of two religious organisations that
last year declined to make their financial statements available:
Mortlock declined to release a copy of City Impact's financial statements for this
story, claiming churches have a right to privacy. Destiny Church was also
asked to release its financial statements for this story but refused, saying it has
no obligation to make its figures public (Casinader, 2009, p. 56).
In the case of Destiny Church, one year later, thanks to the Charities Register, their
financial statements were submitted under eighteen separate regions, which showed
donations of nearly NZD6 million (McCracken, 2010). Interestingly, to obtain this
figure the reporter would have had to go through each of the eighteen separate regions
financial statements as no consolidation of Destiny Church took place, a common
problem amongst charities which was highlighted in Chapter Six. If Destiny Church‟s
donors applied for the donations rebate this would mean that the Government would
potentially have to pay Destiny Church‟s donors up to NZD2 million - a not
insignificant number.
This need for secrecy is not held by all religious organisations as can be shown by:
Steve Farrelly, of the Christian-based Life Impact Trust, says churches should
be more transparent about their funds. If you're an urban church with 5000
people who tithe 10 per cent, you're bringing in several million a year. How
much of that reaches the community? In some cases, churches just keep buying
assets. Yes, they can bring in large amounts of revenue, but it should be
redirected to those who need the help (Casinader, 2009, p. 57).
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