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Publication of registration decisions: Declines and deregistrations
Updated March 2010
Charities Services is keen to provide helpful information for the charitable sector and for the wider public to help develop greater understanding of what is meant – in law – by "charitable purpose", and why Charities Services has declined to register some applications, or removed some charities from the Register.
Introduction
Charities Services has decided to publish its written decisions to:
- decline to register applicant organisations
- remove charities from the Register.
In doing this, it aims to contribute to greater understanding of the law that governs its decisions, and in particular, the legal meaning of "charitable purpose".
A small percentage of the applications for registration received by Charities Services are declined. As well, a small percentage of registered charities are removed from the Register after registration, for failure to comply with the Charities Act's requirements, or at their own request.
Of more than 30,000 applications received by Charities Services since the Register opened on 1 February 2007, it has:
- declined to register around 1,200 applications
- removed apprfoximately 243 organisations from the Register.
To be registered, Charities Services must be satisfied that an applicant organisation is wholly and exclusively charitable.
Registered charities are eligible for exemption from income tax and for inclusion on the public Register, so Charities Services must be certain they are qualified for registration, and remain qualified for the taxpayer and donor support that registration can confer.
What is the process that can lead to a decision to decline to register an applicant, or to its removal from the Register?
Every application received by Charities Services is individually scrutinised, using the information provided by the applicant.
Their rules are assessed against the legal "test" set out in the Charities Act – that is, they must have a charitable purpose (as defined by the Act and by courts), have officers that can be certified, and not have a purpose of making a private financial profit. As well, they must have a "public benefit", and all their activities must be in support of their charitable purpose.
Sometimes, an applicant might provide information that is incomplete or ambiguous, so we contact them for clarification. We have found that some applicants haven't replied to our request, so after a time, we have assessed their application using only the information they provided in their initial application. Many such "incomplete" applications have been declined.
As well, some applicants have asked Charities Services to withdraw their application during the assessment process – they may, for example, have wound up their organisation, or realised they do not meet the Charities Act's criteria, or decided they do not need/wish to be registered.
Some applications raise issues that are considered by Charities Services' Board. These applications are generally the first of a kind, particularly complex, or likely to lead to a decline.
In making a decision, Charities Services' Board receive advice from its registration team, who are experienced in assessing decisions. In some cases, they may also ask for specialist legal advice.
The Board or chief executive can do a range of things, including making a final decision based on the advice provided, requesting further information or returning the application to the Registration Manager to progress. When a final decision is made, the formal written decision is released to the applicant.
Removal of entities from the Register
Once registered, a charity must continue to comply with the criteria set out in the Charities Act. Charities Services may remove organisations from the Charities Register if they no longer comply with the requirements of the Charities Act.
Removal may also be in response to a request from the organisation itself.
Of the approximately 240 charities that have been removed from the Register to date:
- around 200 requested removal because they had wound up and were no longer operating
- several requested removal because they no longer wished to be registered
- around 35 were removed for failing to file an Annual Return, as required by the Charities Act.
Charities Services may also decide to remove from the Register any entities that its investigation and monitoring shows – for example – that they have been involved in serious wrongdoing, or they are no longer qualified for registration.
When are decisions published?
Applicants can, if they choose, appeal to the High Court a decision to decline to register them or to deregister them.
Charities Services will publish its decision after the appeal period has lapsed, and/or after any appeal has been decided by the Courts.
What information is available to help applicants?
Information sheets
Charities Services has published several "plain language" information sheets to help applicants understand whether their organisation is likely to be eligible for registration. They include:
Charities Services has also developed information sheets specifically for Iwi / Māori organisations, organisations whose activities are carried out overseas, sports and recreation bodies, and community and economic development agencies.
It has also published an information sheet Deregistration.
Publication of decline and deregistration decisions
Charities Services is keen for the charitable sector, and for the wider public, to develop a greater understanding of what is meant – in law – by "charitable", and why it has declined to register some applicants.
With that in mind, it has decided to publish information about the decisions Charities Services has made to decline particular applications or remove charities from the Register, and its reasons for doing so.
Please note that (as explained above), not all decisions are available for publication.
Applications that were withdrawn at the request of the applicant beforeCharities Services made its decision, or that Charities Services made on the basis of incomplete information provided by an applicant (who didn't respond to a request for more information), or that related to a failure to file Annual Returns have not been included.
