Review of the Charities Act 2005

Current progress

The Department of Internal Affairs has worked with key stakeholders to develop a high level engagement strategy. The strategy recognises the importance of community engagement and outlines the approach DIA will take to engagement in 2019.  Specific details about consultation and community meetings will be announced early in 2019.

Public consultation will occur from late February 2019. See the press release on the Department of Internal Affairs website: 

The Minister for the Community and Voluntary Sector announced a review of the Charities Act 2005 on 24 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 purpose of the review is to ensure that the Charities Act is effective and fit for purpose. The comprehensive legislative review will focus on substantive issues arising under the Act, while recognising and building on the Act’s strengths. 

Review documents

Core Reference Group (CRG)

The Department of Internal Affairs has established the CRG to assist during the review. As outlined in the terms of reference, the Department of Internal Affairs 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);
  • Anaru Fraser (General Manager of Hui E! Community Aotearoa);
  • Everdina Fuli (Research Advisor at Te Whare Wānanga o Aotearoa); and
  • Dave Henderson (former positions include Chair of Kidney Health New Zealand and External Relations Manager for Hui E! Community Aotearoa).

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 review of the Charities Act. This research is being conducted in their independent, private capacities, separately from the Government review. For further information, please email davehendersonnz@gmail.com.

Indicative timeline

The following indicative timeline supersedes the original indicative timeline contained in the terms of reference for the review (below):

Phase

Indicative timing

Key activities

One – Establishment

Completed May 2018

Develop and approve terms of reference

Publicly announce review

Two – Pre-consultation

Completed

 

Complete by Feb 2019

Establish Core Reference Group

Identify issues and possible solutions, develop discussion document

Three – Consultation

Late Feb – Apr 2019

Launch discussion document

Public consultation

Four - Policy

May – late 2019

Review public submissions

Develop policy proposals for Cabinet approval

Five - legislation

Late 2019 onwards

Develop draft legislation

Passage through the House of a Bill to amend the Act

Frequently Asked Questions

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 review

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 will be reviewed. The February 2018 edition of the Charities Services newsletter outlined that preparatory work to begin a review of the Charities Act was well underway.

Contact the team

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