Charities Act 2005 – A Timely Review

A review of the Charities Act 2005 is being undertaken by the Department of Internal Affairs.  The review is being carried out during a major time of change where we are seeing the Trustee Act 1956 making way for the new Trusts Act 2019 which will come into effect on 30 January 2021.  The Charities Act 2005 provides for voluntary registration of charities in New Zealand as well as annual reporting.  With over 27,000 charities registered in New Zealand, the charitable industry makes a significant contribution to our society.

The purpose of the review is to ensure that the Act is effective and fit for purpose.  The review will cover:

1. Whether any additional purposes of the Act are necessary. Note that the Government considers that the existing fundamentals are meeting their purpose.  The existing fundamentals are – provisions for registration of charities, that registration is voluntary, public access to information about charities via the charities online register, and the obligation on charities to file annual returns with financial statements.
2. The role, function and structure etc. of the regulator (Charities Registration Board and the Department of Internal Affairs – Charities Services).
3. Funding of the regulator.
4. The purpose and content of the publicly accessible charities register
5. Mechanisms to challenge or appeal decisions of the regulator.
6. Offences and penalties under the Act.
7. Regulation of third party fundraisers who fundraise on behalf of a charity.
8. Matters relating to registration and deregistration.
9. Matters relating to the obligations of registered charities (including the obligations of individuals on governance boards and in senior management roles in registered charities).
10. Links to other legislation including the Incorporated Societies Act 1908, Charitable Trusts Act 1957 and the Trusts Act 2019.

Not included in the review are:

1. The definition of charitable purpose.
2. Tax exemptions.
3. Regulation of the broader not-for-profit sector.
4. Contracting arrangement for government services.

Public meetings were held by the Department of Internal Affairs throughout the country as well as a call for submissions on the review, which closed on 30 May 2019.  More than 350 written submissions were made, and a summary of the written submissions was released by the Department in late 2019.  The Department will then start preparing policy proposals for approval by Cabinet before developing draft legislation.  The policy proposals are not expected until late 2019 or early 2020.

As experts in the charities and charitable trusts space, you may rely on us to keep abreast with any developments in order to keep you well-informed. Read more about changes to Trusts law here.