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Supreme Court decision – Greenpeace

There has been widespread coverage of the Supreme Court’s decision regarding Greenpeace’s application for registration, which was released earlier this month – you can read the full judgment. The essence of the Court’s decision is that a blanket exclusion from charitable status on the basis of independent purposes of political advocacy is no longer necessary.

As some commentators have observed, the decision does not represent as significant a change as it might first appear– rather, it confirms that notions of ‘charitable purpose’ must continue to move with the times, as they have done since the enactment of the Statute of Charitable Uses more than 400 years ago. Charities Services, and the independent Charities Registration Board, will continue to apply the decisions of the courts when assessing applications for registration as a charity, and when monitoring charities’ ongoing eligibility to remain registered.

While the Supreme Court decision found that political activity may itself be accepted as a charitable purpose, applicants with political purposes must still satisfy the law’s well-established ‘public benefit’ test, and meet all the other requirements of the Charities Act 2005. The Supreme Court also confirmed that illegal purposes (either stated, or inferred from an applicant’s activities) could not be charitable purposes.

In light of the Supreme Court decision, we are developing new guidance about political advocacy and charitable purposes.  This will assist the independent Charities Registration Board in making future registration decisions, and provide information that is as ‘plain language’ as we can make it for anyone wishing to apply for registration – charities law is complex! I expect that this guidance will be available later this month – please check back to the website for details.

New reporting standards

Work on implementing the new reporting standards is progressing at a great pace, and we have a dedicated team working through key areas such as group reporting and how the annual return form may need to change. Information is available on our website to help charities decide which tier they should report in, and new information will continue to be added as it is developed.

We’re continuing to work with the External Reporting Board (XRB) and ANGOA to ensure the sector is well prepared for the changes. Together we’ll be out and about in October to close off the XRB’s consultation process, provide more detail about the requirements of the new standards and help charities get ready. See the article below for more details.

Annual meeting

Our annual meeting will be held in Wellington on 17 October and I’m delighted that Sue van Schreven of Orphan’s Aid International, and author and skin cancer specialist Doctor Sharad Paul of the Baci Foundation, both registered charities, have agreed to address the meeting.  Both our speakers have a real passion for their work, and we are sure you will find their views both interesting and valuable to your own charitable work.

The team and I are looking forward to catching up with you at the annual meeting, and talking with you about the issues that are important to your organisations. 

Nāku, nā
Lesa Kalapu

Mark your diary!

All registered charities are warmly invited to the annual meeting...

Charities Services Annual Meeting

Friday 17 October, 1-4 pm

Sounding Theatre, Te Papa, Wellington

We look forward to receiving your response to the invitation we emailed to your charity earlier this week. RSVPs are essential!

If you need any more info (or can’t locate your invitation), please see our website.

The Capability and Engagement team is looking forward to talking to charities at some seminars being run in conjunction with the External Reporting Board (XRB) in October. This is one of a number of initiatives to help make sure charities are prepared for the upcoming changes to accounting requirements.

“The seminars are a great opportunity for charities to hear about the new reporting standards for Tier 3 and 4. Charities can find out details about the requirements of the standards, and how to get ready to apply them” says Kate Uhe, Education Advisor.

Nineteen seminars will be held throughout the country in October. The seminars are free, and people wanting to attend can register through the XRB’s website.

While the new standards come into effect on 1 April 2015, they will only apply to a charity’s first full financial year that starts on or after this date. For example, a charity with a financial year-end date of 31 March 2016 will be required to submit financial statements to Charities Services using the new standards by 1 October 2016 (six months from the end of its financial year). For charities with a financial year-end date of 30 June 2016, the new standards will apply to their financial statements submitted by 1 January 2017.

“There is still plenty of time to get ready,” says Kate. “You can get started by checking out the information on the website and thinking about what tier your organisation should report in.”

It pays to check the Charities Services website from time to time, because we regularly update and add to the guidance information and resources available for charities.

We’ve recently developed two new resources for charities, which you might like to read and share with colleagues in the sector.   Both are in “plain language”, and provide practical guidance on the fundamentals of registering, managing and governing a charity.  They are (of course!) completely free to download.

Registration booklet

This helpful booklet explains the benefits and obligations of becoming a registered charity, has a step-by step- guide setting out what you need to do to apply for registration and remain registered, and lists some places where you can find help to apply.  It’s well worth a read!

Officer Kit

Our Officer Kit is essential reading for anyone who is an officer of a charity – for example, a Board member, trustee, or member of the management team.  As an officer of a charity, you have certain powers, but also certain responsibilities and obligations.

If your charity is deregistered at your request, recent changes to the Income Tax Act 2007 will apply to you.

A new tax may be imposed 12 months after the date of deregistration, and will apply to any registered charity that:

• voluntarily seeks deregistration after 14 May 2014, or
• is deregistered by Charities Services after 1 April 2015.

Charities Services can deregister a charity for – for example – failing to file an annual return, as required by section 41 of the Charities Act 2005, or for serious wrongdoing.

Annual Returns are important, because they enable the public to access relevant information about charities’ activities and use of resources, leading to greater public trust and confidence in the charitable sector.

If your charity fails to file an Annual Return, you will be contacted by Charities Services, and – in time – if the Annual Return isn’t filed, your charity will be deregistered.  Some information will continue to be displayed on the Charities Register though, including a note explaining that the charity has been removed for failing to file its Annual Returns.

Removal from the Charities Register – whether by failing to file an Annual Return, or at your charity’s request, or for serious wrongdoing – means that the charity is no longer registered as a charitable entity, and will no longer be eligible for tax exemption on charitable grounds or any of the other benefits of registration. 

The new rule is that deregistered charities may be subject to a tax based on the value of all assets or equity still held 12 months after deregistration.

Deregistered charities, after deregistration, will effectively have 12 months to transfer the charity’s income and/or assets to another charity, or arrange for the assets and/or equity to be used for a charitable purpose. Inland Revenue may now impose a tax on any remaining accumulated income, and on the value of any assets still held by the deregistered entity, at the end of that 12 month period.

If you choose to deregister and need assistance with disposal of your assets, you could contact your nearest community law centre or community foundation.

• More information

In the last edition of the newsletter we mentioned the information charities need to include on tax receipts to donors.

A point of clarification – an official stamp is not actually required if the receipt is on your organisation’s letter head.  Thank you to the astute reader who pointed this out to us!

As a reminder, the key information required is:

• the name of the donor(s)
• the amount and date of the donation
• a clear statement that it is a donation
• the signature of an authorised person, and
• an official stamp with the name of the approved donee organisation OR, the receipt printed on official letterhead.

Statistics New Zealand is to update its official measure of the not-for-profit sector, the 2004 Non-profit Institutions Satellite Account, which was released before the Charities Register was launched and populated.

That report, now a decade old, found there were 97,000 not-for-profit organisations, including charities, in New Zealand contributing $6.95 billion or 4.9% to the country’s Gross Domestic Product.

More recent data, drawn from registered charities’ most recent annual returns, shows that the charitable sector had a total income of $16.8 billion, and expenditure of more than $10.5 billion. 

Statistics NZ estimates that the project will take around 18 months.  Once updated, the report will give a more accurate picture of the size, structure and economic contribution of non-profit institutions.

The Fundraising Institute of New Zealand (FINZ) is planning the following event:

360-Degree Not-for-Profit Training Days

• Christchurch (11 September)
• Auckland North Shore (16 October)

Learn more and register

Pricing starts at $99 including GST

We welcome new subscribers to our bi-monthly Charities newsletter – please feel free to forward it to anyone who you think might be interested.

We automatically send the newsletter to the main contact email provided by every currently registered charity, so you can remain up to date with changes that may affect your charity’s ongoing eligibility for registration, and information about new resources and education available for charities.