Charitable sector income is on par with the value of dairy exports. A review of the Charities Act proposes change but some question whether the scope was broad enough to begin with, writes Anna Rawhiti-Connell for The Bulletin.
Delayed Charities Act review released
New Zealanders are known to be some of the most generous givers of both time and money to charities in the world. There are currently 28,544 registered charities in New Zealand. The government has now completed a review of the act that governs some of their obligations and empowers the Charities registration board. The Charities Act review is another review delayed by Covid but was released yesterday by minister for the community and voluntary sector, Priyanca Radhakrishnan. The review was announced in 2018 in the wake of two of Destiny Church’s charities being deregistered and the Charities registration board’s inability to punish uncooperative charities.
Charities with cash or asset accumulation will need to explain them
The changes proposed by the review are detailed in this report from RNZ but include requiring charities with operating expenses over $140,000 to explain any major accumulated cash, assets and other resources. As Oliver Lewis reports, there won’t be a requirement for charities to give out a set amount of their revenue but Charities Services has said it will ask questions if a charity is clearly not advancing its purpose. The review also proposes reducing the administrative burdens on small charities, making it easier for charities to seek an appeal on decisions and increasing the powers for both the Charities Registration Board and sector regulator, Charities Services, which administers the Charities Act.
Tax exempt status for megachurches out of scope
Out of scope for the review was considering the tax exemption for religious charities like Sanitarium (which is wholly owned by the Seventh Day Adventist church) and megachurches like Destiny Church. The government’s Tax Working Group received more than 300 submissions about charities in 2019, many wanting religious bodies stripped of tax-free status. A petition to strip megachurches of their tax-exempt status gained over 50,000 signatures in late 2021. Daniel Dunkley took a look at some of the complexities behind the issue at the time for Stuff.
Opportunity lost?
Business Desk has been running an excellent series on the business of giving for a couple of months now. As noted by the project’s editor Victoria Young, the money flowing around the charitable sector is not small change. New Zealand’s charitable sector income –at $21.19 billion –is comparable to the value of its dairy exports. The sector employs 145,000 people full-time. Charities lawyer and a member of the core reference group set up by Department of Internal Affairs as part of the review, Sue Barker, spoke to Oliver Lewis about what she feels are many missed opportunities and was urging the government to press pause on its review before it was released. She feels the scope is too narrow and the sector doesn’t need a piecemeal approach to legislation.
