NZ Review Charities Act to Ensure It’s Fit For Purpose

New Zealand is launching a comprehensive review of its national Charities Act to ensure the act is “effective and fit for purpose” more than a decade after it was first implemented.

Minister for the Community and Voluntary Sector Peeni Henare, who announced the review, said a lot had changed in the sector since the act had been implemented in 2005 and it was important to ensure it was “working well”.

“The Charities Act 2005 regulates more than 27,000 charities in New Zealand, and as it has been in place for more than a decade it is now time to see if it’s fit for purpose,” Henare said.

“A lot has changed in the charities sector, and it is important to make sure that the act is still working well for all those who operate within it.

“This is a great opportunity to take a look at the legislation that guides charities.”

Since the first charity was registered under the act in New Zealand there has been significant changes in the charitable sector’s wider operating environment.

The past decade has also seen the disestablishment of the Charities Commission and establishment of the independent Charities Registration Board; the introduction of financial reporting standards for registered charities; and a new tax that applies to deregistered charities.

Stakeholders in the sector have been seeking a review of the act for a number of years.

The New Zealand government announced plans in 2010 to review the Charities Act 2005 but these were later cancelled in 2012 when the functions of the Charities Commission were rolled into the Department of Internal Affairs.

In “A Message from the Minister” in the DIA Charities Services newsletter in February, Henare advised of new plans to review the act.

He said reviewing this legislation was his “top priority”.

“I hope to make good progress on the review during this parliamentary term,” he said.

According to the terms of reference, which were approved by Cabinet last month, the review will focus on substantive issues arising under the act, while recognising and building on the act’s strengths.

“The extent to which charities can advocate for their causes, and ways to appeal the regulator’s decisions, all need looking at,” Henare said.

Matters relating to additional purposes of the act, regulatory framework, registration and deregistration, the obligations of registered charities and links to other legislation all fall within the scope of the review.

In contrast, operational issues, the definition of charitable purpose, tax exemptions that result from registration under the act; regulation of the broader not-for-profit sector; and contracting arrangements for government services will not be covered.

Formal consultation will begin later in the year, with stakeholders and members of the public encouraged to provide feedback on what is working, and what is not.

“The broad scope of the review will enable robust discussions on many key issues that are of interest to the sector and the public,” Henare said.

“I urge everyone with an interest in the work of charities to get involved and have their say.”

The Department of Internal Affairs is leading the review process, working closely alongside a Core Reference Group of representatives from the charity sector.

The review is expected take between two to three years.