Requirements for registering as a charity
Charities Act 2005, s 13
To be able to register as a charity:
- your organisation must have “charitable purposes”, and
- all of its officers must be qualified under the Charities Act.
These requirements are explained below: see “Charitable purposes” and “Qualified officers”.
Can an unincorporated group register as a charity?
Yes. Charities Services will accept applications from unincorporated groups and from the trustees of a trust, as well as from incorporated societies and other incorporated bodies.
What is a “charitable purpose”?
Charities Act 2005, s 5
A charitable purpose can include:
- the relief of poverty
- the advancement of education
- the advancement of religion, or
- anything else that benefits the community.
A charitable purpose must also provide a public benefit, which means a benefit that is:
- recognised by law as beneficial, and
- available to the public or a sufficient section of the public – for example, people living in a particular geographical area, or with particular charitable needs.
A purpose can’t be charitable if it’s aimed at creating private financial profit.
A marae committee has a charitable purpose if the physical structure of the marae is on Māori reservation land, and the marae’s funds are used only for administering the land and physical structure and/or for a “charitable purpose” according to the general definition above.
Sport and recreation organisations can qualify for registration as charities if promoting sport is the means by which the organisation pursues a charitable purpose. For example, a sports organisation providing training or skills-development for the public may qualify as a charity under the “advancement of education” purpose, or an organisation providing public sport or recreation facilities may be considered to be benefitting the community. (For more information, visit: www.charities.govt.nz/apply-for-registration/charitable-purpose.)
Can a charitable organisation also have non-charitable purposes?
Charities Act 2005, s 5(3)
The organisation’s main purposes must be exclusively charitable, but it may also have non-charitable purposes if these are “ancillary” to the main purposes.
A non-charitable purpose will be “ancillary” if it’s an inevitable consequence of the charity’s main work, or if it supports the main charitable purpose. A non-charitable purpose won’t be ancillary if it’s a significant or independent part of the organisation’s work.
All officers must be qualified under Charities Act
Charities Act 2005, s 16; Crimes Act 1961, s 2(1); Tax Administration Act 1994, s 143B
For an organisation to be able to register as a charity, its officers must not be disqualified under the Charities Act (see also below, “Who are a charity’s ‘officers’?”).
An officer is disqualified if, for example:
- they’re an undischarged bankrupt, or
- within the last seven years they’ve been convicted of a dishonesty offence under the Crimes Act or of tax evasion under the Tax Administration Act, or
- they’re subject to a property order under the Protection of Personal and Property Rights Act 1988 – that is, the Family Court has decided they are unable to manage their own property.
However, if an officer is disqualified by one of these factors or any of the others set out in the Act, the Charities Registration Board has the power to ignore the factor in the particular case.
Who are a charity’s “officers”?
Charities Act 2005, s 4
If a charitable organisation is a trust, its officers are all the trustees of the trust.
With other organisations, the officers will be:
- all the members of the highest governing body (usually the people elected at an AGM), and
- every person who has a “position of significant influence” over the running or management of the organisation, which includes decision-making, expenditure and day-to-day administration.