Aotearoa New Zealand’s charity legislation is being reviewed; there are calls for feedback from people in the sector to be included - not just input from government departments.

Registered charities recently received an email from Te Tari Taiwhenua Department of Internal Affairs (DIA), informing them work has resumed on modernising the Charities Act 2005, and is expected to lead to proposals for legislation in 2022-2023.

New Community and Voluntary Sector Minister Hon Priyanca Radhakrishnan is considering next steps on the paused review of the Charities Act 2005. 

However, many people within the charities and wider not-for-profit sectors are calling on her to widen the scope of the review and to actively engage with people in the charity sector as part of the process.

The Charities Act regulates more than 27,000 charities in Aotearoa New Zealand. A quick search of the register showed 111 registered charities in Alexandra, 74 in Cromwell, 24 in Roxburgh, 22 in Ranfurly, 17 in Clyde, five in Omakau, three in Tarras, and two each registered in Naseby and Central Otago. Charities make an important contribution to our economy, way of life and well-being in Central Otago.

Nationally, charities have an annual total income of over $18 billion, and are supported by more than 230,000 volunteers and 180,000 paid staff.

The work of charities has a big impact in our region.

The Charities Act was enacted in 2005, with the goal of promoting public trust and confidence in the charitable sector. Among other things, it means charities can be registered, entitling them to certain tax exemptions, and they must provide annual reporting.

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

In 2010, the former Minister for the Community and Voluntary Sector announced a review of the Charities Act 2005, to assess both the definition of “charitable purpose” and the effectiveness of the Charities Commission. However, in 2011, the Government disestablished the Charities Commission, transferring its functions to the DIA and an independent Charities Registration Board. This was part of the Crown Entities Reform Bill.

In 2012, Cabinet announced they would not continue with the review as things generally seemed to be working well.

Then, in 2018, the Minister for the Community and Voluntary Sector announced a review of the Act would be undertaken, noting that while the fundamentals of the Act were considered sound, there were a range of substantive issues. Work on the review was then put on pause in May 2020 for six months. The Department of Internal Affairs’ Policy Team told Charities Services’ annual meeting that they are in the process of briefing the Minister on how she might move the work forward and in particular how she should engage with the sector.

However, spokespeople for the charities sector say it is important the Minister considers their views, and not just the views of a government department.

Many in the sector are calling for Labour to honour its 2017 election commitment to prioritising a first principles review of the Charities Act 2005. Commitments include consulting with the community and voluntary sector on whether the disestablishment of the Charities Commission improved things for the sector and “ensuring that community and voluntary organisations can engage in advocacy”.

Out of the 363 submissions to the 2018 review, 128 commented on its narrow scope. Nearly all said it should be widened. Most notably, the definition of charitable purpose was excluded and the promised review of disestablishing the Charities Commission was limited. Around two thirds of submitters also sought an independent review of the Act by a body like the Law Commission.

Sue Barker of law firm Sue Barker Charities Law is currently undertaking independent research into the question “What does a world-leading framework of charities law look like?”. Sue is the recipient of the New Zealand Law Foundation International Research Fellowship, Te Karahipi Rangahau ā Taiao. As part of her research, she has consulted with over 200 people, internationally and in Aotearoa New Zealand, and has drafted a bill that would amend and restate the Charities Act 2005. Her report is due in September 2021.

Sue said in a recent statement to the media there are many improvements to be made to the charities regime. 

“We need an independent agency to administer charities’ legislation and we need to strengthen the sector’s voice in its engagements with the Government. 

“We also need to get back to first principles and interpret the definition of charitable purpose as intended - so that it encompasses the amazing and varied work that charities do – and enables a thriving and sustainable charities sector.”

“During the Covid-19 lockdown, so many charities were deemed ‘essential services’. 

“It is in all of our interests to take the time needed to ensure that the law helps, rather than hinders, the good work that charities do.”

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