Guide to the Charities Act
Introduction to the Charities Act
The Charities Act 2005 ("the Act") was passed in April 2005. The Act established the Charities Commission ("the Commission") which came into being on 1 July 2005.
The Commission’s main functions are:
- to establish and maintain a registration and monitoring system for charitable organisations
- to provide support and education to the charitable sector on good governance and management.
Registration under the Act began on 1 February 2007 when the Charities Register ("the Register") opened. The Commission helps organisations that want to register by providing plain language information about the Act and how to apply to register under the Act.
You can see a copy of the Charities Act 2005 on the government legislation website or buy a copy from any Bennetts bookshop or from the following sources online: http://www.legislation.govt.nz/buyonline.aspx
Autonomous Crown Entity
The Commission is an Autonomous Crown Entity (ACE). This means that the Commission is independent of Government but it must "have regard" for government policy when directed by the responsible Minister.
The functions of the Commission
The Act says the key functions of the Commission include:
- deciding on whether to accept an application for registration
- monitoring Annual Returns submitted by registered charities
- reporting and making recommendations to Government about charitable sector matters
- promoting public trust and confidence in the charitable sector
- encouraging the effective use of charitable resources
- educating charities about matters of good governance and management
- stimulating and promoting research about the charitable sector.
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Will I still need to comply with the requirements of the charitable trusts and incorporated societies registers?
Yes, if your organisation is incorporated under these Acts. The Charities Commission will not take over the running of these registers. This is because not all charitable trusts or incorporated societies will choose to become registered charitable entities.
For more information, refer to How the Charities Act affects charitable trusts and incorporated societies.
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Does the Charities Act 2005 supersede the Charitable Trusts Act 1957?
No. They are separate Acts for separate purposes.
If an organisation is already a Charitable Trust, it will still need to register with the Commission if it wishes to receive or maintain tax exempt status and become a registered charitable entity.
For more information, refer to our information sheet How the Charities Act affects charitable trusts and incorporated societies.
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Can an unincorporated collective be registered as a "charitable entity" under the Charities Act 2005?
Yes. An organisation does not have to be a legal entity to register with the Commission.
The Commission expects most organisations that meet the charitable purposes test will be either:
- a trust, or
- a society or institution
but not necessarily an incorporated trust, society or institution.
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Will the Crown be consistent in its approach as to what is a "charitable purpose"? i.e. will the Charities Commission reach the same result in terms of assessment as was achieved in the process previously undertaken by the IRD, and by the Registrar of Charitable Trusts under the Charitable Trusts Act 1957?
The Commission uses the well-established common law test for charitable purposes. The test requires a charitable organisation to have a purpose in terms set in the common law that either:
- advances education
- advances religion
- relieves poverty
- is otherwise beneficial to the community.
The Charities Commission applies the charitable purposes test in the context of the Charities Act. While the approach will be very similar to other Crown rulings in the context of other legislation, there may be cases where the result will be different.
A trust does not need to have exclusively charitable objectives. It must have at least one charitable objective, but it may have other objectives as well.
The Commission's assessment of charitable purpose is considered on a case-by-case basis.
For more information, refer to our information sheet Charitable purpose.
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Can the Charities Commission access and retrieve constitutional documents from other registers?
The Charities Commission does not retrieve constitutional documents from other registers. The Commission requires the applicant to provide the most up to date versions of these documents and other agencies may have a different filing or up-date schedule.
However, the Commission does not require original constitutional documents – copies are acceptable.
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Like members of the public, non-Crown agencies may search the publicly available register and make official information requests.
As a Crown agency, the Charities Commission is subject to the Official Information Act.
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