Uncertainty has arisen a number of times about whether grants to certain organisations are permitted, due to confusion about whether they are considered to be for personal gain, which is not permitted by the Gambling Act 2003 (the Act). An example recently brought to our attention is Make-A-Wish New Zealand.
Make-A-Wish is a charity which ‘grants wishes’ to children suffering from life-threatening medical conditions. The recipients of these wishes are often detailed in grant applications. Such grants should be considered as grants to a charitable purpose, which supports individuals to improve wellbeing, not specifically a grant to an individual for personal gain. Other such examples include Riding for the Disabled, Plunket or Red Cross.
A ‘charitable purpose’ meets the requirements of an Authorised Purpose under the Act. More information about what constitutes a charitable purpose is included below, but we want to take the opportunity to mention the philanthropic objectives that should guide Class 4 grant-making decisions.
Class 4 gambling in New Zealand exists solely for the purpose of raising funds for the community. Grant recipients can include a range of organisations that are charitable or otherwise deliver benefits to the community. Maintaining a philanthropic perspective when making grant decisions ensures that this is achieved.
Any organisation with a charitable purpose is eligible for Class 4 grants and should be given equal consideration, within any limitations of funding strategies, for distribution of gaming proceeds.
What is a ‘charitable purpose’?
Charitable purpose has a special meaning in law. Charitable purpose generally means: the relief of poverty; the advancement of education; the advancement of religion; or any other matter beneficial to the community. It must also be a purpose that provides a public benefit, and is not aimed at creating private financial profit.
Charity is helping people in need in the community, such as the poor, sick, disabled or elderly people. Provision of funds and/or facilities for people suffering from a disability is an authorised purpose. Society grants to recognised charitable organisations to further the objectives of these groups can be an authorised purpose.
Grants to further public health, religion and education may also be charitable.
Some examples of charitable authorised purposes are:
welfare assistance for people in need
hospital visits for the elderly
donating a computer to a school.
A society may have internal policies that dictate whether grants are restricted to organisations or activities within the local community. It should be noted, however, that not all purposes that benefit the community are recognised as charitable.
Further information on authorised and charitable purposes can be found on the Department’s website at www.dia.govt.nz and www.charities.govt.nz. You can also search the charities register for charitable organisations.