Community and economic development

Updated June 2026

Community and economic development may be charitable when it advances a recognised charitable purpose and provides clear public benefit.

This page explains when this work may be charitable in New Zealand, and what we consider when assessing applications.

When community and economic development can be charitable

Community and economic development may include work that addresses disadvantage, improves access to services or amenities, or supports participation in community life.

However, this work is not automatically charitable. To register under the Charities Act 2005, an organisation must have exclusively charitable purposes, carry out activities that advance those purposes, and ensure any private benefit is limited and secondary to the public benefit.

Ways community and economic development may be charitable

  • providing essential services for disadvantaged communities
  • promoting public health through education, counselling, or rehabilitation
  • delivering public works and services, such as infrastructure or utilities
  • providing public amenities and recreational facilities
  • protecting the environment
  • preserving places of historic interest

The activities must always benefit the public or a sufficient section of the public.

Example: providing essential services

An organisation delivers free or low-cost services to a disadvantaged community, such as housing support or access to healthcare.

In this case, the purpose may be charitable because it benefits a section of the public in need.

When public participation and good citizenship can be charitable

Some organisations help communities take part in local decision making.

These purposes may be charitable if they promote good citizenship and public participation in democratic processes.

Activities may include: 

  • sharing information about local issues
  • encouraging participation in planning or development processes
  • holding public meetings
  • working with councils or other decision makers
  • representing the community in formal forums


Example: residents’ association

An association keeps residents informed about local developments and encourages participation in council decision making. In this case, the purpose may be charitable because it promotes participation in civic life.

If an organisation also seeks to influence decisions on specific issues, its work may involve advocacy and need separate consideration. Learn more on the advocacy page.

When economic development can be charitable

Economic development may be charitable where it clearly advances a charitable purpose and provides public benefit.

This usually means: 

  • a focus on a disadvantaged area or community, and
  • any benefits to individuals or businesses are limited and secondary to the wider public benefit.

Organisations should provide information about:
 

  • the level of disadvantage in the area
  • how their activities benefit the public
  • how private benefits are limited.


Example: supporting a disadvantaged community

An organisation runs programmes to help unemployed people in a disadvantaged region gain skills and find work. In this case, the purpose may be charitable because it addresses disadvantage and benefits the wider community.

Example: supporting individual businesses

An organisation provides funding or services to help specific businesses grow, without showing a clear benefit to the wider community. In this case, the benefit may be private rather than public.

Show public benefit and limit private benefit

An organisation must show that its activities benefit the public, or a sufficient section of the public.

This includes:
 

  • explaining who benefits
  • showing how the benefit reaches the public
  • providing evidence where the benefit is not obvious

This is particularly important where activities may also benefit individuals, businesses, property owners, or a specific local area.

Any private benefit must be incidental to achieving the charitable purpose. In other words, it may occur as a result of the organisation's work, but it cannot be the main purpose of the organisation.

An organisation may make a profit or pay for goods and services, provided this supports its charitable purposes. Private financial interests must not be the primary focus of its activities.

How we assess applications

When we assess an application, we look at whether the organisation’s purposes and activities meet the registration requirements.

We consider what the organisation says it will do and what it does in practice. We look at:
 

  • how clearly the purposes are defined
  • whether the purposes and activities advance a recognised charitable purpose
  • whether the benefit is public or private
  • whether any private benefit is limited, justified, and connected to the charitable purpose
  • how the organisation carries out its purposes in practice.

These factors help us decide whether the organisation’s purposes and activities meet the requirements for registration.