Charities Commission to be established
An overview of the Charities Commission as at November 2002, by Pat Hanley, Projects Manager ANGOA.
The Working Party was established in November 2001 to advise on certain aspects of the Government's June 2001 discussion document Tax and Charities.
The terms of reference for the Working Party were, broadly, to advise on a registration reporting and monitoring system for charities in New Zealand. The Working Party was also invited to comment on certain aspects of the definition of charitable purpose, and of the treatment of New Zealand charities with overseas purposes.
The first report, dated 28 February 2002, deals with registration reporting and monitoring.
The second report, dated 31 May 2002, deals with the issues relating to the definition of charitable purpose, and New Zealand charities with overseas purposes.
A key recommendation of the Working party was to establish an independent Charities Commission. The functions of the proposed Commission would be:
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To approve and register charitable organisations
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Collect annual information and monitor the activities of registered charities
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Provide advice and support to the charitable sector ('centre of excellence')
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And provide advice to government on the sector.
The Working Party also supported the need for changes in the way in which the definition of charities is interpreted to better reflect conditions in New Zealand in the twenty-first century. In particular iwi based Maori organisations are likely to be more favourably considered under proposed changes.
The Charities Commission would be an independent body established by legislation and reporting directly to the Minister of Finance and the Minister Responsible for the Community and Voluntary Sector. It would also report annually to the community and voluntary sector. The Working Party felt that it was particularly important that the Commission not be accountable to any particular government department but that it operate as a 'centre of excellence' able to support and promote the community and voluntary sector and provide independent advice to government.
In preparing its recommendations the Working Party took into consideration the nearly 2,000 submissions received by government in 2001 in respect of the taxation of charities discussion document. That discussion document is available on the Inland Revenue web site www.taxpolicy.ird.govt.nz/publications/files/html/ddcharities/index.html
There are an estimated 32,000 trusts and incorporated societies which currently have exemption from taxation who will be affected by the proposed changes. Government officials are currently working on the details of how the proposed Commission is to be established and operated. Later this year they will begin work on the required legislation. The next step will be publication of the draft legislation for public comment. This is likely to occur in the New Year. It is hoped that the Commission will be in operation in 2004.