Modernising the Charities Act 2005

Summary of submissions from public consultation

The Department recently announced the release of the summary of submissions from public consultation on Modernising the Charities Act.

The summary of submissions summarises the views of 363 individuals and organisations that submitted on the discussion document between late February and 31 May 2019. All written submissions will also be published on this website.

The submissions are available here: Submissions. For further information see: Questions and Answers 

The next step is to carefully work through the complex issues raised by submitters and identified in the discussion document. The Department will provide advice on these issues to the Minister for the Community and Voluntary Sector. No legislative changes will be proposed without further consultation. 

The initial focus will be on charities' business activities; accumulation of funds, and reporting requirements for small charities.

Public consultation – late February to 31 May 2019

DIA hosted 27 community meetings about Modernising the Charities Act between 6 March and 18 April 2019 in the following locations:

  • Porirua (Pasifika charities)
  • Carterton
  • Wellington
  • Wellington (Māori charities)
  • Whangarei
  • North Shore
  • Waitakere
  • South Auckland
  • Auckland Central
  • Hamilton
  • Whakatane
  • Rotorua
  • Lower Hutt
  • Hawke’s Bay
  • Gisborne
  • New Plymouth
  • Palmerston North
  • Nelson
  • Christchurch
  • Dunedin 
  • Invercargill

Community meetings raised a number of common themes, summarised below:  

DIA also hosted an online meeting presentation. This was the same presentation that DIA staff made at community meetings. At the end of the presentation, DIA staff also answered some common questions that had been raised at community meetings.

This video is  available to watch on demand at the link below:

Earlier documents

Core Reference Group (CRG)

DIA has established the CRG to assist- work to modernise the Act. As outlined in the terms of reference, DIA will work closely with the CRG to identify issues and possible solutions within scope. The CRG comprises the following six members, who bring a variety of perspectives, skills and experiences to the review:.

  • Sue Barker (Director of Sue Barker Charities Law);
  • Charmaine Brown (Director of Creating Success and Trustee of Autism Intervention Trust);
  • Donna Flavell (Chief Executive Officer of Te Whakakitenga o Waikato Incorporated and Trustee of Waikato Raupatu Lands Trust);
  • Everdina Fuli (Research Advisor at Te Whare Wānanga o Aotearoa); 
  • Dave Henderson (former positions include Chair of Kidney Health New Zealand and External Relations Manager for Hui E! Community Aotearoa); and
  • Sai Lealea (Member of the Ministry of Social Development Pacific Steering Group, and the Wellington City Council Pacific Advisory Group)

Sue Barker and Dave Henderson of the CRG have received some funding from a consortium of philanthropic community trusts to carry out a research project, aimed at gathering empirical community-sourced evidence to feed into the modernisation of the Charities Act. This research was conducted in their independent, private capacities, separately from the work of the DIA. For further information, please email davehendersonnz@gmail.com.

Overview of the charitable sector and the Charities Act

Overview

The charitable sector contributes significantly to New Zealand society. These charities contribute in diverse areas including sports, recreation, arts, culture and heritage, emergency and social services, health, education, religion, conservation and the environment. There are more than 27,000 registered charities in New Zealand. The sector has an annual total income of more than $18 billion and it is supported by more than 230,000 volunteers and 180,000 paid part-time or full-time staff.

Charities Act 2005

In 2005, the Charities Act was enacted. The Act aims to promote public trust and confidence in the charitable sector. It provides for the registration of societies, institutions, and trustees of trusts as charitable entities. It also places certain obligations on charitable entities, such as annual reporting. Being listed on the charities register entitles an organisation to tax exemptions on most income under the Income Tax Act 2007. Registration on the charities register is voluntary. 

Link to Charities Act 2005 (Legislation NZ website)

Background to the 2018-2019 work to modernise the Charities Act

The original Charities Bill was introduced into Parliament in 2004, and led to establishment of a Charities Commission. The charities register (which provides the purposes, activities and annual returns for all registered charities) commenced in 2007.

In 2010, the former Minister for the Community and Voluntary Sector announced an intended review of the Charities Act 2005, to assess both the effectiveness of the Charities Commission since its inception in 2005 and the “charitable purpose” definition.

However, in 2011, the Government disestablished the Charities Commission, transferring its functions to the Department of Internal Affairs and an independent Charities Registration Board. This was part of the Crown Entities Reform Bill: https://www.parliament.nz/en/pb/bills-and-laws/bills-digests/document/50PLLaw19581/crown-entities-reform-bill-2012-bills-digest-no-1958#RelatedAnchor

Cabinet decided in 2012 not to continue with a review, as the new regulatory regime was still bedding in, and the definition of charitable purpose was considered to be generally working reasonably well. The following Cabinet papers and minutes related to that decision were proactively released by the Minister:

In 2018, the Minister for the Community and Voluntary Sector announced that a review of the Act would be undertaken, noting that while the fundamentals of the Act are considered sound, there are a range of substantive issues that would be considered. The February 2018 edition of the Charities Services newsletter outlined that preparatory work to begin a review of the Charities Act was well underway.

The Minister announced the terms of reference for the review in May 2018. The Minister will be the key decision maker on the review, with some decisions also requiring Cabinet approval. The Department of Internal Affairs will be the lead agency. The full terms of reference can be found above. See: Earlier documents.

Contact the team

If you can’t find the information you need on this page or if you have any further questions please email charitiesact@dia.govt.nz