Public benefit and charitable purpose

Updated June 2026

To register as a charity, your organisation must have charitable purposes that benefit the public.

This page explains:

  • public and private benefit
  • when it may be acceptable to limit who benefits and include private benefit acceptable
  • how unclear or broad purposes affect your application.

Your purposes must benefit the public

Your organisation’s purposes must benefit the public or a large enough section of the public. The benefit does not need to reach everyone in New Zealand, but it must reach enough people to count as public benefit.

Examples of public benefit include:

  • relieving hardship by providing food, shelter, financial assistance, or support services to people experiencing poverty or crisis
  • improving community health by delivering health services, running wellbeing programmes, or supporting people with physical or mental health need
  • advancing education by providing teaching, training, scholarships, or resources that help people gain knowledge and skills
  • protecting the environment by conserving natural habitats, promoting sustainable practices, or restoring ecosystems.

When limits on who can benefit may be acceptable

Your organisation can focus on a specific group if the limit supports its charitable purpose and the group is large enough to count as public benefit.

For example, your organisation may support:

  • people with a rare disability
  • people living in a particular place

These limits may be acceptable because they still benefit a section of the public.

Limits are less likely to be acceptable if they mainly benefit:

  • a closed club
  • named individuals
  • a very small group
  • members under strict membership rules

These limits may not count as public benefit because they do not benefit a wide enough section of the public.

Limits must be reasonable

Limits on who can benefit must be reasonable and appropriate in the context of the public benefit.

For example, your organisation may:

  • charge fees, if they are not so high that they exclude most people
  • limit membership where this supports the public benefit (for example, a professional group improving public health outcomes)
  • restrict access in practical ways (for example, protecting a site or managing safety).

What private benefit means

Private benefit means a benefit to a person, business, member or organisation, rather than to the public or a sufficient section of the public.

Examples of private benefit:

  • profit or financial gain for individuals or businesses
  • services that mainly benefit members or a closed group
  • help for a small group connected by family, employment, or private association
  • access to assets, services or opportunities that are not linked to a charitable purpose.

When private benefit may be acceptable

Private benefit does not automatically prevent an organisation from being charitable. However, any private benefit must be:

  • necessary
  • reasonable
  • closely connected to the charitable purpose
  • secondary to the public benefit.

For example, training health professionals may benefit those professionals, but it may still be charitable if the training clearly improves health outcomes for the public.

Profit and payments

Charities can carry out business activities and make a profit. However, all profits must be used to support charitable purposes.

Payments to people or businesses must be reasonable and based on market rates. They must not create private gain that outweighs the public benefit.

How we assess your purposes

We assess your purposes under New Zealand charity law, which is based on court decisions over time.

We look at:

  • whether your purposes fit recognised charitable categories
  • how similar purposes have been treated in previous cases
  • whether they provide a clear public benefit.

Clear, specific purposes make it easier to show your organisation meets requirements.

Make your purposes clear

Your purposes should:

  • describe who you help
  • explain what need you address
  • show how your activities benefit the public.

Avoid purposes that are too broad or unclear.

For example:

  • “Promote social wellbeing” is too broad because it could include both charitable and non-charitable activities
  • A clearer purpose is: “Promote social inclusion for older people at risk of isolation”

When purposes do not qualify

A purpose will not be charitable if it is illegal, causes harm that outweighs any public benefit, or relies only on hoped-for benefits.

For example, funding businesses in the hope they employ more people may not show enough public benefit on its own.

More information on public benefit

The following legal decisions show how public benefit is considered under New Zealand law.

  • Plumbers Gasfitters and Drainlayers Board
    A group set up by legislation to register plumbers, gasfitters and drainlayers was considered charitable because although individual businesses may benefit from registration, the purpose of registration was public health and safety.

  • Grand Lodge of Antient Free and Accepted Masons

    A group that aimed to advance education and other charitable purposes for its members was not charitable because its membership rules were too restrictive.

  • Queenstown Lakes Community Housing Trust

    A group provided schemes to help people into home ownership or housing. The court accepted that promoting social cohesion can be charitable, but found the private benefits of home ownership were too significant in this case.

  • Liberty Trust

    An organisation that helped people buy homes in line with their religious beliefs was found to be charitable for advancing religion. Although it provided some private benefits, the court found that the main focus was the public benefit of religion.

  • Travis Trust

    A horse racing group that was closed to the public was not charitable because it was not open to a sufficient section of the public.