Grant strategies to build nonprofit capacity

The Charity Sector’s Say - the Charities Act (2005) Review

We want Charities Services to work cooperatively with our trust towards the aim of being registered. 

Earlier this year we concluded national survey to provide community input to the review of the New Zealand Charities Act 2005. This is the first time since 2005 that the Charities Act has been reviewedThe Charities Act 2005 regulates more than 27,000 charities in New Zealand, and it has been in place for more than a decade.

We collected and analysed data to help gather feedback on what is working, and what is notin relation to the Charities Act 2005.  A total of 577 individual responses were received from people working in the charitable sector across New Zealand. A range of issues and themes emerged and will be presented to the Review for the improvement of charity regulation in New ZealandBelow are a few matters that stood out

Purposes of the Act 

Stakeholders in the charitable sector view the Charities Act 2005 as vital to ensure public trust, transparency and accountability in the sectorMany people are satisfied with the purposes of the Act, suggesting it is ‘helpful’‘good’, and provides ‘the right balance’. The most relevant purposes of the Act were seen as:

- Promoting public trust and confidence in the charitable sector 

- Educating and assisting charities in relation to matters of good governance and management 

- Compiling and maintaining the charities register

I view the Charities Act 2005 as vital to ensure accountability and transparency in the charity sector.

 Being registered adds validity to our organisation which is acceptable to the public.” 

Despite the benefits of being a registered charitable organisation, smaller charities were more likely to have problems with registration. Reasons for not being registered include costs, compliance and narrow criteria, unnecessary administration burden, lack of knowledge of the requirements, or other.

Knowledge, Education and Support 

Overall, respondents to the survey indicated they were only somewhat informed of the Charities Act 2005. Many felt the New Zealand general public’s knowledge and use of the register could be improved. The general public’s knowledge and confidence in the charitable sector has bearing on the way charitable groups or organisations are perceived. 

“I am not sure that many members of the general public are aware of the register and it's uses.” 

More active support is needed, particularly for small and volunteer based organisations. Responses highlighted a current gap in professionalism and knowledge around best-practices for good governance and managementMany people felt the Charities Registration Board should provide greater guidance, guidelines and assistance around the legal requirements for charities to be registered. The importance of education and training to help build the governance capacity of the sector was prominent in many of the survey responses. 

“Charity services needs to take leadership in aspects of developing education and frameworks for charities, CEO's and Trustees like the IoD does in the corporate sector.  Governance is essential but the tools / capability development isn't there at an affordable level for the sector. 

Moreoverrespondents wanted to see greater recognition and acknowledgement of the contributions of charities to New Zealand society.

Definitions of charitable purpose and advocacy 

The research indicates greater clarification or expanded definition/ clarification of charitable purpose, charitable benefit and status is needed, as is a clear definition of what constitutes advocacy. Many people felt that their charity is unable to advocate for their causes and points of view, and also be registered. Firm views were expressed throughout the survey as to being able to advocate for charitable causes as a necessary activity. Many felt current definitions of charitable purpose and advocacy in relation to registration requirements negatively impacts the core work of charitable organisations in New Zealand.

I am concerned that the Act limits the function of charities to undertake some functions e.g. advocacy, which could be seen as limiting the voice of charities wishing to advocate on behalf of their communities. I agree that charities should be able to operate businesses to raise funds to be used for charitable purposes, this also relates to the lack of any legal structures for social enterprises. 

We will keep you posted as the review progressesOur full report from the national survey is available here. 
For more information about the reviewsee the following link:   https://www.dia.govt.nz/charitiesact