New Community and Voluntary Sector Minister Hon Priyanca Radhakrishnan is considering next steps on the paused review of the Charities Act 2005. Many within the charities and wider not-for-profit sector are calling on her to widen the scope of the review and to engage with the sector.

The review of the Charities Act 2005 commenced in 2018 and was put on pause in May 2020 for six months. The Department of Internal Affairs’ Policy Team told Charities Services’ annual meeting that they are in the process of briefing the Minister on how she might move the work forward and in particular how she should engage with the sector. Spokespeople for the charities sector say it is important the Minister considers their views – not just the views of a government department.

Many in the sector are calling for Labour to honour its 2017 election-commitment to prioritising a first principles review of the Charities Act 2005. Commitments also included consulting with the community and voluntary sector on whether the disestablishment of the Charities Commission improved things for the sector and “ensuring that community and voluntary organisations can engage in advocacy”.

Out of the 363 submissions to the 2018 review, 128 commented on its narrow scope. Nearly all said it should be widened. Most notably, the definition of charitable purpose was excluded and the promised review of disestablishing the Charities Commission was limited. Around two thirds of submitters also sought an independent review of the Act by a body like the Law Commission.

ComVoices, a network of community and voluntary sector peak bodies, said in their submission that “The charitable sector has long sought a first principles review of the Act … the desire is for an Act which is fit-for-purpose in the modern world, provides clear accountability and better boundaries to ensure the definition is not subject to being distorted through mis-interpretation. As this approach has been rejected, we believe the current review will not resolve our concerns”.[1]

Birthright NZ, a charity that previous Minister Hon Poto Williams worked for, said in their submission that the current review is “not giving the recognition this important piece of legislation requires. It is essential sufficient time and consideration is given to make sure the review has fully considered the diverse nature of the sector. The law must enable charitable organisations to effectively carry out their work and not work against them in anyway”.[2]

Sue Barker is currently undertaking independent research into the question “What does a world-leading framework of charities law look like?”. She is the recipient of the New Zealand Law Foundation International Research Fellowship | Te Karahipi Rangahau ā Taiao, New Zealand’s premier legal research award. As part of the research, she has consulted with over 200 people, internationally and in New Zealand, and has drafted a bill that would amend and restate the Charities Act 2005. Her report is due in September 2021.

Sue says many improvements can be made to the charities regime: “We need an independent agency to administer charities’ legislation and we need to strengthen the sector’s voice in its engagements with Government. We also need to get back to first principles and interpret the definition of charitable purpose as intended - so that it encompasses the amazing and varied work that charities do – and enables a thriving and sustainable charities sector.”

There are over 27,000 registered charities and over 110,000 other not-for-profits in New Zealand. They are a critical part of our economy (2.8% of GDP)[3] and our society and the wellbeing of New Zealanders – nearly every New Zealander has a community organisation that means something to them.

Sue recommends that the new Minister widens the scope of the review so that it looks at fundamental issues such as the definition of charitable purpose. She is also calling on the Government to support and fund a process of co-design with the sector.

“There is such a diversity of views, it is very important to follow a “natural justice”-type process that allows the various voices to be heard and to feel that they have had meaningful input into formulating policy (rather than just reacting to proposals that have already been formulated).”

“During the Covid-19 lockdown, so many charities were deemed ‘essential services’. It is in all of our interests to take the time needed to ensure that the law helps, rather than hinders, the good work that charities do.”, says Sue.

To find out more, contact Sue Barker (susan.barker@charitieslaw.co) or visit www.charitieslawreform.nz

[1] DIA, Modernising the Charities Act 2005: ComVoices, Submissions 2.

[2] DIA, Modernising the Charities Act 2005: Birthright, Submissions 1.

[3] Stats NZ, Non-profit institutions satellite account, 2018.

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