Charity registration for NCWNZ reinstatedPosted on Friday, May 10th, 2013 | Posted in Charities, Featured, Government Relationships, Sector Issues | No Comments »
In 2010 the National Council of Women of New Zealand (NCWNZ) was deregistered by the then Charities Commission. They lost their charitable status and were removed from the Charities Register.
Last month, nearly three years later, it has been reinstated as a registered charity. NCWNZ’s path to re-registration has been a long-one, and represents salutary lessons for other similar organisations, and the now-permanently delayed review, etc etc…
The reason for NCWNZ’s deregistration rested on the Charities Commission’s interpretation of section 5 of the Charities Act, and how this applied to the activities of the National Council. To be eligible to register as a charity, organisations must have a “charitable purpose”—defined in section 5 as for “the relief of poverty, the advancement of education or religion, or any other matter that benefits the community”.
Section 5, however, goes on to say that, although a charitable organisation can have non-charitable purposes—such as advocacy—these non-charitable purposes must be additional, and ancillary or secondary to the organisation’s main charitable purposes.
So, this is where, in 2010, the NCWNZ, and other organisations including Greenpeace and the Sensible Sentencing Trust, found themselves in trouble with the Charities Commission.
In April 2010, the Commission wrote to the National Council stating that they intended to remove them from the Register on the grounds that the NCWNZ “did not appear to be established and maintained exclusively for charitable purposes”. The Commission considered that the NCWNZ’s purposes “amounted to political advocacy”, and this could not be seen as secondary or ancillary.
The National Council made submissions to the Charities Commission challenging its intention to deregister, but in a written decision analysing the NCWNZ’s rules and activities the Commission concluded the NCWNZ had a “main purpose of advocating for changes in the law or the policy or decisions of central government”. As this purpose, in the Commission’s view, was neither charitable nor ancillary, NCWNZ purposes could not be considered to be exclusively charitable, and therefore they could not be registered as a charity.
As above, the new Charities Board has now decided to reinstate NCWNZ as a registered charity, which is good news.
The experiences of the National Council do however raise a number of questions about the current charities legislation and about the process for challenging the decisions of whatever body is regulating charities.
Dealing with the Charities Act first.
Perhaps ironically, the National Council for Women was amongst a number of submitters, which when the current Act was being drafted, suggested that the definition of charity could prevent many organisations from qualifying as charities.
It can be argued that today lobbying and advocacy are a necessary and appropriate activity for organisations such as the National Council and we need either a definition of charitable purposes, or an interpretation of current legislation, that reflects this.
The National Council for Women were not alone then when they expressed disappointment last year at the Government’s decision to no longer carry out the promised review of the Charities Act.
The Government argued that the current definition was “working reasonably well” and that a review was not considered necessary. As you are aware, community organisations strongly disagreed with this, believing the current definition does not recognise the activities of many organisations working for the “public good”.
Secondly, the experience of NCWNZ raises questions about the current procedures and systems for challenging the decisions of the charities regulator – currently the Department of Internal Affairs-Charities.
NCWNZ considers itself in some ways fortunate. The lawyer assisting the National Council become reinstated as a charity, believes New Zealand charities need a better, less arduous way to appealing decisions. Sue Barker Charities Law suggests, for example, “an internal review process and a specialist charities tribunal”.
What do you think? If nothing else, this issue remains firmly on the agenda of the community and voluntary sector – if not the current Government’s.