Modernising the Charities Act: Questions and Answers

(updated 10 December 2019)

1. What is the summary of submissions report about? 

In February 2019, the Department released a discussion document titled Modernising the Charities Act 2005. We received 363 written submissions in response to the discussion document.

The Department has now analysed all feedback from submissions, including comments on issues outside of the scope of the review. This feedback will inform our policy advice to the Minister for the Community and Voluntary Sector.

The summary of submissions report is intended to help the sector, government and public to understand key themes that came through in submissions. It does not summarise every submission but provides an overview of what submitters thought about each issue.

2. What happens next on work to modernise the Charities Act?

The next step is for government to carefully work through the issues submitters raised. This will ensure any proposals developed are well informed by what the Department heard during public consultation.

Further engagement with the sector will be essential. How this takes place is still to be determined. The Department will continue to involve the Core Reference Group and other sector representatives in the policy process. No legislative changes will be proposed without further consultation.

3. Will the modernising work consider changing the four heads of charity?

The four heads of charity – relief of poverty, advancement of religion, advancement of education or any other matter beneficial to the community - will not be considered as part work to modernise the Act.

The definition of ‘charitable purpose’ is outside the scope of this work. Consideration of issues, such mechanisms to appeal the regulator's decisions, will better enable case law around 'charitable purpose' to develop.

4. Why have tax exemptions been excluded from the scope of the review?

Charities registered under the Charities Act 2005 are entitled to tax exemptions on most income under the Income Tax Act 2007.

The Income Tax Act governs tax exemptions, not the Charities Act. Tax exemptions are not a matter that is appropriate for this work to consider.

The Government’s 2019/20 Tax Policy Work Programme has a section on charities and tax.

The Department of Internal Affairs will ensure the significance of the community and voluntary sector, and the difference that charities make every day in communities throughout New Zealand, is shared with those looking at the tax policy settings for charities.

5. Will advocacy matters be considered as part of the modernisation work?

The Department has consulted on the extent to which registered charities can advocate for their causes and points of view. Submitters provided significant views on improving certainty and clarity on the circumstances under which charities can advocate for causes.

6. Will the legal structure of social enterprises be considered as part of the modernisation work?

No. The Department of Internal Affairs (DIA) is undertaking other work on social enterprises, separate from this work.

7. Who will carry out the modernisation of the Charities Act?

DIA’s Policy Group is leading the work to ensure that the Charities Act 2005 is fit for purpose.

While the regulator “Charities Services” is based in DIA, it is not leading this work.

8. What is the Core Reference Group (CRG), and how were members selected?

CRG will work with DIA to help identify problems and suggest solutions. 

Three members of CRG were nominated by the Sector User Group (SUG) – Sue Barker, Dave Henderson and Sai Lealea (with Sai joining the group in August 2019 when Anaru Fraser resigned). SUG is a 25 member group convened by Charities Services. SUG broadly represents a range of views from the charitable sector.

The three remaining members of CRG were selected by DIA – Charmaine Brown, Donna Flavell and Everdina Fuli.

The terms of reference for this work broadly outlined the skills and experiences for DIA to consider when selecting the three above members. These skills included knowledge of smaller charities and Te Ao Māori perspective. 

9. How will we stay informed about the progress of this work?

Up to date information will be available at: www.dia.govt.nz/charitiesact

The quarterly newsletter from Charities Services will also be used to share information at key points. Subscribe at: https://www.charities.govt.nz/

Opportunities for the public to contribute will be widely publicised.

10. How are officials planning to engage with iwi and hapu, and other stakeholders?

All stakeholders should have an opportunity to participate in a way that meets their needs. It is important that stakeholders provide the best contribution they can.

DIA has developed an engagement strategy to ensure strong engagement with iwi and hapu, Pasifika, and other ethnic community stakeholders. The engagement strategy is available: Charities Review Engagement Strategy (PDF, 730KB). 

As more details of engagement are finalised they will be made available on our website.

11. When will any changes be made to the legislation?

The modernisation work might raise issues that are best addressed by changes to the Charities Act. Changes to legislation will be the final step in this work and will be progressed following public consultation.

If a Bill is introduced to amend the Charities Act, further public submissions would usually be called for by select committee during the legislative process.

12. What does modernisation of the Act mean for the charity I am involved in?

This work is about making sure the legislative settings work well for all charities.

We need charities to give feedback on how they think the current legislative system is working, and what could be done to make it better.

In the long term, we expect an easily understood and flexible Act that ensures public trust and confidence in charities, so charities can continue to make a significant difference every day throughout New Zealand.  

13. What does this review mean for the contract my charity has with government to provide services?  

Modernising the Charities Act is about making sure the legislation works well. Contracting arrangements for government services are outside the scope of the review.

14. How many submissions have been received? Will these be made available to the public?

DIA received 363 submissions during the public consultation period. These submissions are now published to the DIA website, here: Submissions.

A summary of submissions is available here: Summary of Submissions