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Sent to the Editor of The Advertiser 22 June 2010
The purpose of this letter is to respond to an article published in “The Advertiser” on Wednesday June 16th 2010.
As a point of clarification, The Queen Elizabeth Hospital Research Foundation (TQEHRF) is in full support of standardised financial reporting for charitable organisations.
In developing the structure of a standard set of accounts for charities and not-for-profit organisations however, the preference of TQEHRF is for the reporting model to allow for differentiation of business structures across the sector.
There are some organisations that, in addition to willingly accepting donations from the community, operate businesses whose function is to derive income for the charitable purpose; this is the case with many charities in South Australia. Some charities for example operate pre-owned clothing stores, some operate retirement villages and invest in property development, some provide social services as part of a supplier agreement with various arms of Government, and some charities like TQEHRF operate lotteries and other gaming activities. Without this differentiation between business activities and charitable donations the standardised reporting would not present an accurate and easy to follow picture of the application of actual charitable donations, as opposed to business income, to the charitable purpose.
The strategic oversight of TQEHRF is in the hands of a Board of Directors whose membership includes highly respected and experienced practitioners from the fields of law, accounting, commerce, architecture and medicine in South Australia. Funds made available to medical research are allocated to programs or individuals after advice and review from an independent Research Advisory Committee, whose membership includes some of the most esteemed Scientists and Medical Specialists in Australia.
Income derived via donations or business activities are either allocated to medical research in that year or alternatively are reserved for pre-committed funding for medical research in the following year/s. Over the next 5 years TQEHRF has targeted the provision of over $11 million dollars to medical research, equipment and support of patient care.
Whilst there are fluctuations in the amount of annual income we generate, we aim to ensure that all pre-committed grant funding is at least met by our annual business initiatives and traditional fundraising activities. If we are successful in generating a surplus of income over pre-committed funding we then allocate those funds, according to expert advice, to current or future planned research. In 2010/2011 we have budgeted to allocate over 80% of projected gross surplus to medical research and patient care.
With changes to the state legislation pending, it is important to note that the existing law requires financial reports from Prescribed Associations such as TQEHRF are submitted annually to the South Australian Office of Business and Consumer Affairs. These documents are a matter of public record and are accessible. Not for profit organisations such as TQEHRF must also adhere to Federal and State laws pertaining to Incorporated Associations, Registered Charities, Tax Deductible Gift Recipients and Public Benevolent Institutions.
TQEHRF is independently audited on an annual basis by accounting firm Edwards Marshall & Co. In the area of business activities, as the largest non-government lottery provider in South Australia, applications to operate two major lotteries each year are comprehensively and rigorously reviewed by the Office of the Liquor and Gambling Commissioner before being approved. Our lotteries are also independently audited by Edwards Marshall & Co. In addition, Deloitte Private, a division of one of Australia’s most respected business advisors; facilitate and oversee the collection of income, ticket allocation and prize draws for our lotteries.
In regards to TQEHRF’s charitable purpose, we have been supporting vital health and medical research at The Queen Elizabeth Hospital and the Basil Hetzel Institute, for nearly 45 years. TQEHRF places the very highest value on its long standing relationship with the South Australian public, community groups and corporate entities who generously support us through monetary donations, event participation, and support of our business activities such as our major lotteries. It is through their support that the Foundation is able to provide program grants, individual research grants, PhD scholarships and equipment grants to ensure the continued excellence and successful research outcomes that aids the health and well-being of all South Australians.
We look forward to the pending legislative changes and the implementation of standardised financial reporting for this sector, it will benefit organisations like TQEHRF that do act appropriately and in accordance with all regulatory requirements, and most critically, help restore the public’s trust and confidence in the charitable sector.
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