Monthly update 08 - March 2006

In brief: This issue gives advice on when to put in your application, answers your questions, looks at the bigger picture with comments from Tina Reid of NZFVWO, and gives details of forthcoming Charities Commission presentations. 

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Timing it right

Many charitable groups will know by now that registration under the Charities Act 2005 is voluntary. You will also know that there are certain benefits to registration, including tax-exempt status on the grounds of charitable purpose. If your charitable organisation is currently enjoying tax exemption and does not wish to lose that privilege, you will need to register with the Charities Commission before 1 October 2007.

So, bearing in mind that the Charities Register will open to receive applications from late July 2006, when is a good time to apply for registration?

The easiest and most logical time to apply is around your Annual General Meeting as this is when you are likely to have all of your details up to date - and you will be electing or re-electing Officers.

Most charitable organisations hold their AGMs about three to six months after their Balance Date. In this respect, charitable organisations that wish to register under the Charities Act should consider making an application to the Charities Commission within six months of their 2006 Balance Date, or at the time of their AGM.   

A charitable organisation with a Balance Date of 31 March 2006, for instance, could apply in the period July to September 2006. Their likely Annual Return date would be 30 September 2007. Taking some other examples, they might map out like this:

Balance Date	Registration period	Annual Return
30.06.06	01.10.06 to 31.12.06	31.12.07
30.09.06	01.01.07 to 31.03.07	31.03.08
31.12.06	01.04.07 to 30.06.07	30.06.08

Please note that we have provided these timeframes simply as a guide to when your organisation may find it most convenient to lodge its application. Ultimately, of course, the timing of any application for registration is a decision that rests with the organisation concerned.

Your questions

Q: We are a donee organisation – how will we be affected by the Charities Commission?
A: The Charities Act 2005 does not impact on an organisation’s donee status.

The Inland Revenue remains responsible for administering applications for donee status, so these organisations will continue to have a direct relationship with Inland Revenue. Charities that currently enjoy donee status should retain that status and have this confirmed by Inland Revenue following registration with the Commission.
 
Q: Is the $10,000 "annual income" threshold for Annual Return filing fees based on gross or net income?
A: Charitable organisations with a gross annual income of $10,000 or less will not be charged to file their annual return. This means all of your organisation’s annual income, before expenses and not including GST.  

The bigger picture

While our current focus is on finalising the registration process and keeping you informed along the way, it is important to remember what will come out of the development of the Charities Register for the charitable sector as a whole.

We see the Register evolving to become a valuable source of information both on, and for, the sector. For instance, we will learn a great deal more about the number of New Zealanders who volunteer and how many voluntary hours they work. We will also develop a better appreciation of the size of the sector.

Tina Reid, Executive Director of the NZ Federation of Voluntary Welfare Organisations, also sees the Charities Commission as having a much wider role than registration.

“The Commission can provide a strong independent focus and voice for charitable activities,” she said. “It will be collecting unique data about charitable activities, which will inform research and policy advice, and provide help to strengthen the profile and understanding of the sector on New Zealand.”

For example, registration information will feed into Statistics New Zealand’s work as part of the Study of the New Zealand Non-Profit Sector and the John Hopkins international comparative study.
 
In time, the data captured by the registration process should not only tell us more about the makeup of the sector, but also help to inspire more public confidence in charitable work and direct more support towards it.

Group registration

On 14 March we held a very constructive meeting with a number of representatives from charitable groups to hear their thoughts on our proposed approach to the group registration process. The Charities Commission is considering that feedback closely. A warm thank you to all who took part and shared their views.

Upcoming events

The Charities Commission is presenting at the following community events next month:

• 10-12 April 2006 - Central Lakes Trust Funding Seminars, Queenstown, Cromwell, Wanaka and Alexandra. For more information, email info@centrallakestrust.org.nz
  
• 29 April 2006 - Meeting of the community and voluntary sector in Christchurch, organised by the Christchurch Council of Social Services. For more information, email ccoss@ihug.co.nz or phone 03 366 2050.

For more information

Visit our website at www.charities.govt.nz for the latest information on the Commission’s activities, and on the registration process.

Free phone: 0508 CHARITIES (0508 242 748)

Update is the monthly newsletter of the Charities Commission. If you wish to subscribe, simply email info@charities.govt.nz with your name, organisation and postal address or call us on free phone 0508 CHARITIES (0508 242 748).