Update newsletter: August 2009
A birds-eye view of the charitable sector – from the Charities Register
PROJECTED FOR THE SECTOR:
- $17 billion taxexempt income
- $2.4 billion donations
- $1.5 billion government grants
- 130,000 full-time employees
For the first time, the Charities Register has brought together up-to-date information about individual charities, from which we can aggregate information about the charitable sector and its work.
Graphs showing the areas where charities operate, their activities, and their beneficiaries, are available on the Commission's website.
Although the Commission has not yet received a full "cycle" of Annual Returns, information collated from those who have had their Return fall due is starting to provide valuable information about the sector.
We use information from Form 4 – the Annual Returns form – and collate it. In particular, valuable information about the sector can be aggregated from the form, which can be completed online or on paper.
What have the Annual Returns revealed so far?
As at 21 August, there were 23,159 charities registered, and 6,244 had filed Annual Returns for the 2008 financial year. From those Annual Returns:
- $4.6 billion was reported as tax-exempt income. (PROJECTED FOR THE SECTOR: $17 billion)
- $648 million was received in donations. (PROJECTED FOR THE SECTOR: $2.4 billion)
- 446,000 volunteer hours were worked, on average, each week. (PROJECTED FOR THE SECTOR: 1.7 million hours per week)
- 1.4 million paid hours were worked, on average, each week. (PROJECTED FOR THE SECTOR: 5.2 million hours per week = 130,000 full-time employees)
- $1.5 billion in government grants were managed by the sector. (PROJECTED FOR THE SECTOR: $5.6 billion)
Information is also available (and can be estimated) about charities' income:
| Income (all sources) | Number of charities | % | Projected number of charities |
|---|
| > $20,000 | 1,752 | 28 | 6,482 |
| > $20,000 <= $100,000 | 2,042 | 33 | 7,555 |
| > $100,000 <= $1,000,000 | 1,900 | 30 | 7,030 |
| > $1,000,000 <= $20,000,000 | 521 | 8 | 1,928 |
| > $20,000,000 | 29 | 1 | 107 |
Similarly, information is now available about charities' total expenditure (on their charitable purposes and activities):
| Expenditure | Number of charities | Projected number of charities |
|---|
| < $20,000 | 2,060 | 7,622 |
| $20,000 - $1m | 3,682 | 13,623 |
| $1m - $20m | 474 | 1,754 |
| > $20m | 28 | 104 |
Updated aggregate information will be published by the Commission from time to time, as it becomes available.
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You're invited – annual meeting and forum
The Commission is holding its 2009 annual meeting and forum between 1.30pm – 4.30pm on Monday 30 November, in Wellington – please mark your diary!
The theme for this year's meeting and forum is "The qualities of an effective charity", and our speakers will be discussing an aspect of this topic.
The Hon Tariana Turia, Minister for the Community and Voluntary Sector, is expected to attend the meeting, which will be hosted by the Commission's Board and chief executive.
The annual meeting and forum is an opportunity for charities to ask questions, make submissions, and influence the Commission, and to hear about its performance and progress.
We'll send a personal invitation to all registered charities closer to the date, and will give you more details then about the venue and speakers we are arranging.
You are most welcome to attend, and we hope to see you there!
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Forums for charities
The Commission recently hosted two forums for charities operating in the Auckland area, and was pleased to receive positive feedback from those who attended. Charities used the opportunity to meet with the Commission's Board and staff, to ask questions about its work and future plans, and to network with others in the sector.
The forums followed a pilot held in Hamilton last year, from which the Commission received encouragement from the sector to hold more of these meetings.
Feedback from the forums is being incorporated into the Commission's planning for its governance and management education programme, and in future, the forums themselves may be a means for delivering educational content.
Another forum will be held in the South Island next year.
The regional forums are intended to complement the Commission's annual meeting and forum, held in Wellington each year.
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Questions about donations, fundraising costs, and charitable purposes
The Commission has received a number of enquiries from members of the public about how their money will be used when they donate to charities, and seeking assurance that it will be used to further the charity's "cause", rather than being spent on administration. Questions have also been received about what is reasonable for a charity to spend on fundraising.
The Commission has responded to enquiries and referred people to individual charities' Annual Returns on the Register (if available). Where appropriate, we have suggested that donors contact charities directly if they need more specific information about the use of their donation.
We have published some "FAQs" on this website, that charities may wish to use when responding to questions from members of the public about the use of donations and the cost of fundraising.
An information sheet – Tips for donors, supporters and those considering volunteering for a charity – is also available.
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The Commission has updated its information sheet Charitable purpose and sports and recreation organisations.
It sets out the current legal position on the charitable status of sport and recreation organisations.
Sports and recreation organisations can qualify for registration as charitable entities under the Charities Act if their purposes are exclusively charitable. While the courts have not recognised the promotion of sport for its own sake as charitable, the law has recognised that sport can be the means by which charitable purposes are carried out.
NOTE: The Department of Internal Affairs has also published updated information on its website for societies that are licensed gambling operators and grant applicants. The Gambling Act 2003 says that societies must conduct gambling to raise funds for "authorised purposes", the definition of which includes "charitable purposes".
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Governance and management education framework confirmed
The Commission's Board has approved a framework setting out how the Commission will approach the delivery of governance and management education to the sector, and an action plan, to be operational by November 2009.
The framework is based on the principles of:
- Long term improvement
- Using existing resources (from other agencies) and limiting duplication
- Focussing on "community building community"
- Identifying and building best practice through learning within the sector
- Developing and communicating relevant, useful information to the sector.
The Commission plans to work at a regional level through the engagement and support of government and non-government agencies who already work with charities in the regions; and directly with larger charities.
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National advisor – Capability – welcome to Peter Dixon
The Commission has employed a National advisor – Capability, Peter Dixon, who will engage with regional organisations to focus on helping charities to develop their governance and management strengths.
Peter has an entrepreneurial background in business development, and while in Canada and the US developed a business model to engage and communicate with young people. He coaches a number of small businesses on capacity building.
Peter is very passionate about the work of charities, and has been involved in the sector through his family from a young age. We are very pleased to have him on board!
Email peter.dixon@charities.govt.nz, tel 04 978 7558
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New Board member welcomed – Tania Kingi
The Commission is delighted to welcome a new Board member, Tania Kingi, appointed by the Minister for the Community and Voluntary Sector, the Hon. Tariana Turia.
Tania is the managing director/contractor of Kaiarahi Tapiri Limited, a role she has held since 2003. The role includes Māori research, project management and evaluation, organisational and community development, and auditing systems and services among health and disability service providers.
Tania provides management services to Te Roopu Waiora Trust, a kaupapa Māori disability support service, founded and governed by whanau with disabilities.
In 2008 she was appointed as a member to the Board of the New Zealand Blood Service.
She has participated in many committees to improve the provision of health and other services. She is the Chair of the National Steering Group of Māori Disability Support Services, and is a provider representative to Counties Manukau District Health Board.
She is an elected representative to Arau Ora - Counties Manukau Māori Health and Disability Collective, representing 20 organisations. She is also co-Chair and executive committee member of Te Ora o Manukau (Manukau, the Healthy City Forum).
She has a Diploma in Business from the Auckland University Graduate School of Business, and is currently pursuing a Master of Arts in Māori Development through Te Ara Poutama, Auckland University of Technology.
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Qualities of an effective charity
The Commission is soon to publish a set of statements and explanatory notes defining the "qualities of an effective charity", and make them available to the sector.
They include "high-level" aspects of charitable operation such as
- Being clear about the organisation's purpose and direction
- Maintaining a strong Board (or other group who make all significant decisions for the organisation)
- Having the right people to carry out its activities
- Being "fit for purpose"
- Maintaining a focus on learning and improving
- Being financially sound and prudent
- Being accountable and transparent
Of the more than 23,000 charities registered with the Commission, there is a wide variance in their relative resources, size, income, complexity, and activities. Some charities are newly established, while others have a long history.
In consultation with members of the sector, the Commission has developed a statement of the "qualities" that it considers contribute to making a charity efficient and effective, and best able to achieve its purposes.
The qualities are not a compliance requirement, but the Commission hopes that charities will consider the qualities and "tailor" their own practical application of them, to best fit their own structure, size, complexity and activities.
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TechSoup - feeding charities IT products and support
Deaf Aotearoa New Zealand is a national association with a focus on leadership and service delivery, registered with the Charities Commission in May 2007.
Technology is particularly important in the daily lives of the deaf, who place a high value on IT.
With that in mind, Deaf Aotearoa approached TechSoup New Zealand, which provides donated software from companies such as Microsoft to eligible New Zealand non-profit groups. TechSoup NZ is a partnership between ConnectingUp Australia, TechSoup, and the NZ Federation of Voluntary Welfare Organisations.
Tony Blackett, general manager of Deaf Aotearoa says that TechSoup has proved a winner for the organisation and its beneficiaries. "We can now manage most of our network through our central server, and it is the equal of many large budget organisations. We have also upgraded our desktop environment to the latest Microsoft software."
All this helps Deaf Aotearoa to deliver its core services, which include providing interpreters to facilitate communication between deaf and hearing people; needs interviews for those needing help to make changes in their lives, and service coordination to develop a service plan to meet identified needs; along with vocational training programmes and employment support.
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Are you interested in what is going on in the Health and Disability Sector? Would you like to receive regular emails with information about upcoming events? Do you want to hear about what is happening around the country in non-government organisations as well as a range of government agencies with a focus on the health and disability area?
If you are interested in finding out more about the Health and Disability NGO Working Group, please go to www.ngo.health.govt.nz
You can also subscribe to the Ministry of Health – Health and Disability NGO sector email update, by emailing Caroline at ngo@moh.govt.nz with your contact details. You will also be able to share information about your organisation with the sector and with people across the Ministry of Health.
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Is your charity a deposit-taker?
If so, you should be aware that new rules are coming in that could affect the way some charities are governed and managed.
From September 2008, The Reserve Bank became the regulator of non-bank deposit takers in New Zealand.
This means that all persons who meet the definition of "deposit taker" will be regulated by the Bank and will be required to comply with specific prudential requirements set out by the Bank.
Most charities won't be affected – because they do not take deposits as defined. Even for those that are caught, the Bank has the power to exempt entities from these obligations where they can be proven to be unduly onerous and burdensome.
The Reserve Bank's full communication, including a definition of "deposit taker" is available on the Commission's website, and you can also visit the Reserve Bank website for more information.
However, the Reserve Bank also recommends that if you are concerned about being captured, you should talk to your solicitor and trustee.
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What's the difference between donee and charitable tax status?
Charitable tax status
Being registered with the Charities Commission under the Charities Act 2005 means that your organisation has proved that it has a charitable purpose, and meets the other criteria of the Charities Act. It is listed on the Charities Register, and information about it is available to the public.
It also means your organisation is eligible for exemption from income tax and gift duty.
Donee status
People who make donations to organisations that have 'donee status' can claim a tax credit (formerly known as a rebate) for their donation. Companies (including certain societies) and Maori authorities can also claim a deduction for donations they make to these organisations. A list of organisations with donee status is available on Inland Revenue's website.
Inland Revenue still determines donee status. However, charities who confirm they receive donations in their application to the Charities Commission are able to be "fast-tracked" through this process by Inland Revenue. An entity can also be a donee organisation without being a registered charity. (In that case, they need to apply directly to Inland Revenue for donee status).
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Annual Return due? Some tips and useful info
Can you file an Annual Return before it's due?
You must file an Annual Return within six months of your balance date (we send you a reminder a month before it is due). However, if it is available before the due date, of course you may send it in earlier (and we encourage you to do so)!
How can you find out your balance date?
A quick way to check your balance date and the date the Annual Return is due to be filed with the Commission is to check your listing on the Charities Register.
What if you haven't had any financial activity during the year?
Remember that a "complete" Annual Return includes both a completed Annual return form and a copy of your financial statements. Even if you have no financial activity during the year, you must send us some financial statements to accompany your Annual Return form, and indicate in them that there has been no financial activity.
Do accounts need to be audited?
No, not for the purposes of the Charities Act. If you have had your accounts audited (your own rules may require this, or another Act), please send a copy of the audited accounts. If you do not have them audited, or have not received a copy of the audited accounts by the time you need to send in your Return, you should send a copy of your accounts, as they are, un-audited.
If the Commission doesn't receive your Annual Return soon after the due date, we will send you a Notice of intention to remove your charity from the Register.
The Notice provides 20 working days for the overdue Return to be filed, before the charity is removed from the Register. Once removed, a charity cannot be "reinstated" on the Register. The only way to be re-registered is to re-apply and have your application processed by the Commission.
A number of charities have failed to file an Annual Return, and been removed from the Register, because by failing to file, they no longer meet the Charities Act's requirements. An entry saying they have been removed, and why, has been added to their page on the Register.
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Password and login security
To access your online (partly-completed) Annual Return form, you must log in to your charity's account, using a username and password.
Your charity's username and password were sent (by email or post) to the person who was named as the contact for your charity's registration application.
TIP: The username is the charity reference number quoted in the acknowledgement email or letter sent to you after applying for registration. The password is a randomly-generated six-digit password. NB: your reference number is not the same as your registration number, which is a unique number given to your organisation when it is registered!
If you are not that person (whose contact details were provided to us in the application form), but you wish to complete an Annual Return, and don't know the username and password, please contact the person named in the registration application form to obtain them.
TIP: For example, some charities' accountants or lawyers sent the registration application to the Commission, and they provided their own name as the contact person. All correspondence about the registration application was sent to that person, including the online username and password.
Forgotten your username and password?
If you were named as the contact person on your application, but have simply forgotten your password, please enter your username and follow the "Forgotten password" instructions on the login screen. The password will be emailed to the email address provided in your registration application form.
For security reasons, we are unable to immediately provide usernames and passwords over the phone. If you have forgotten your charity's username and password, we can re-send them to the contact person named in the application form (who can provide them to you).
If you need to change the name or details of the contact person named in your application form, please ask an authorised officer of your charity to contact us (email info@charities.govt.nz, or write to the Charities Commission Processing Centre, PO Box 30112, Lower Hutt 5040) asking for the information to be changed on the Register system.
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Website improvements for groups
The Commission has made some improvements to the way Groups (single entities) are shown on the Register.
Each group's summary page on the Register now shows all the members of the group, and if you click on the listing for the individual member, the charity details on its page will link you back again to the main group listing.
For example, see the listing for Heart Children New Zealand Group. You can also more easily find the Annual Returns for the group or its members, according to how their terms and conditions specify how they must be filed.
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