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 lined to register some applications, or removed some charities from the Register.
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.
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.
How many applications have been declined or removed from the Register?
(As at October 2012) of more than 40,750 “complete” applications received and processed by Charities Services since the Register opened on 1 February 2007, it has:
- declined to register around 1,919 applications
- removed approximately 3,890 organisations from the Register.
To be registered (and remain registered), Charities Services must be satisfied that an applicant organisation is wholly and exclusively charitable.
Registered charities may be eligible for tax exemptions while they remain on the public Charities 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.
Once registered, 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 3,890 charities that have been removed from the Register to date:
- around 1,375 requested removal because they had wound up and were no longer operating, had amalgamated with another entity, or simply no longer wished to be registered
- around 2,480 were removed for failing to file their Annual Return, as required by the Charities Act
- around 25 have been removed because they do not comply with the 'charitable purpose' test set out in the Charities Act.
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What is the difference between a charity being declined registration, and being deregistered by Charities Services?
Application for registration declined - Organisations that applied to be registered, but had their application turned down.
When the Charities Register opened in February 2007, all organisations that considered themselves to be "charitable" were invited to apply to Charities Services for registration. Around 30,000 organisations have applied since then, and we receive new applications every day.
Each application is scrutinised by Charities Services, and (in most cases) approved. However, some applicants don't meet the legal test for being registered, so their application is declined.
Where an application raises complex issues we send a formal notice to the applicant and invite them to respond to us. If, after receiving the applicant's response, we conclude that the applicant does not meet the legal test for registration, we send the applicant a formal written decision, setting out the legal reasoning for being declined. We show these formal written decisions on this page.
Applicants that disagree with our decision to decline their application to be registered can appeal to the High Court. (These court judgments are published on this page to increase understanding of what the law means by "charitable purposes".)
An organisation that is declined registration does not have any of its details shown on the Charities Register.
Organisation deregistered - Organisations that were registered with Charities Services, but were later removed from the Register.
A charity may ask to be deregistered or Charities Services may decide to deregister a charity.
Most commonly, deregistration occurs because the charity has asked to be removed from the Register. It may have wound up, merged with another organisation, or simply decided it no longer wishes to be registered.
Charities Services also deregisters charities that fail to file their Annual Returns, or fail to meet other requirements set out in the Charities Act.
If Charities Services considers that a charity is no longer qualified to remain on the Register, we send a formal notice to the applicant and invite them to respond to us. If, after receiving the applicant's response, we conclude that the applicant does not meet the legal test for registration, we send the applicant a formal written decision, setting out the legal reasoning for being deregistered. We show these formal written decisions on this page.
Charities who disagree with our decision to deregister them can appeal to the High Court. (These court judgments are published on this page to increase understanding of what the law means by “charitable purposes”.)
In all cases, the Register will show the date and reason that the charity was deregistered.
Deregistered charities can continue to operate, but they are not eligible for a charitable tax exemption or the other benefits of registration.
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Question At what time are decisions published on Charities Service's website?
Applicants can, if they choose, appeal a decision to decline to register them or to deregister them to the High Court .
Charities Services will publish its decision on this website soon after a copy has been made available to the organisation concerned.
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Why doesn't Charities Services simply "rubber stamp" every application made to it for charitable status?
To be registered (and remain qualified for registration, and access charitable tax exemption), an organisation must be — and remain — wholly and exclusively charitable, and meet all of the criteria set out in the Charities Act.
This means that we must individually analyse every application for registration we receive, to be sure it complies with New Zealand law. We also monitor charities to be sure they remain qualified for registration, and take steps to remove charities from the Register if they don't remain qualified.
Donors, funders and supporters of charities — and the wider public — can be assured that if a charity is listed on the Charities Register, it meets all the requirements in the Charities Act, and is eligible for charitable tax status and the other benefits of registration.
There's more about this in our information sheet Understanding Charities Services compliance actions
Understanding Charities Services compliance actions.
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Why have some applicants chosen to split off part of their organisation so they can be registered with Charities Services?
The law says that Charities Services can only register organisations that are wholly and exclusively charitable.
However, some applicants' organisations have a mixture of charitable and non-charitable purposes and activities.
Example - A professional, paid membership-based association that exists to advance the interests of its members and provide social activities for them, might also have some charitable purposes (such as, for example, providing educational scholarships).
If the association chose to, it could form a separate organisation which carried out its charitable purpose, and apply to register that organisation with Charities Services.
In this way, its charitable purposes (that is, providing scholarships) would be eligible for tax exemption, but its other, non-charitable purposes would not.
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National Council of Women of New Zealand Incorporated
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Declined Applications for registration
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