Charities in New Zealand
Posted: 1 July 2020
Charities play an important role in our society to help the disadvantaged, support specific causes or to advance knowledge. In New Zealand we have more than 27,000 registered charities, with 230,000+ volunteers and 180,000 paid staff1. Many of these charities are structured as trusts which can be incorporated and run as a trust board by the trustees.
Others are structured as incorporated societies or companies, or as unincorporated bodies. These types of charities are run by a board with specific obligations and responsibilities.
The Charities Act 2005 (which is currently under review) regulates the Charities Register and sets out the statutory rules relating to registered charities. Those rules include a requirement for registered charities to report, on an annual basis, to Charities Services (a division of the Department of Internal Affairs).
Where a charity is a trust, the Charitable Trusts Act 1957 provides for the trust to be incorporated as a trust board so
it is similar to a limited liability company. As an incorporated board, the trust has the advantage of being a corporate entity, so that the trust itself (rather than the trustees in their own names) can buy and sell property, have bank accounts, mortgages and own a variety of assets and investments.
A trustee’s role
Whether a charity is a trust, incorporated society or company, the fundamental duties for trustees or board members remain the same. That is to understand the charitable purpose and
to comply with the trust deed or constitution (sometimes called the ‘rules’). The charitable purpose of the trust, society or company should be clearly defined in its trust deed or constitution.
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