Defining a charity

When the government in its efficiency drive gets around to reorganising the Charities Commission, we hope that it will adopt a definition of charity that is more contemporary than the purpose currently in our 2005 New Zealand Charities Act, namely: “every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community.” This purpose was derived from the English 1601 Charitable Purposes Act, in a society where poverty was regarded as a crime, there was no public schooling, and no health or welfare system.

While the definition in the NZ Act may seem to be general enough to cover all bases, it is of course open to interpretation. Are conservation groups 'beneficial to the community'? What about sporting groups? Are groups fighting against motorway building 'beneficial to the community'? What about pigeon fanciers? What about the Society of Authors? While many people give money to church groups, it is usually to support not their religion but their community work. The advancement of education has a very different meaning now from the “education and preferment of orphans” in the 1601 Act. There are many other activities that we would regard as charitable but are not covered at all.

As well as matters of interpretation of charitable purposes, there are three further llimits placed on organisations seeking charitable status:

  1. The charitable purpose needs to be organisation's main purpose

  2. The organisation should not be acting solely to benefit its members

  3. The organisation should not be engaging in 'advocacy'.

We need to ask why, when other countries have tried to modernise the meanings of the term 'charity', New Zealand has chosen to use definitions based on England four centuries ago. Why did we not adopt the definition adopted in Britain in the Charities Act, being considered at the same time as the New Zealand act, and enacted in 2006?

  1. The prevention or relief of poverty;

  2. The advancement of education;

  3. The advancement of religion;

  4. The advancement of health or the saving of lives;

  5. The advancement of citizenship or community development;

  6. The advancement of the arts, culture, heritage or science;

  7. The advancement of amateur sports;

  8. The advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;

  9. The advancement of environmental protection or improvement;

  10. The relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantage;

  11. The advancement of animal welfare;

  12. The promotion of the efficiency of the armed forces of the crown, or of the police, fire and rescue services or ambulance services;

  13. Any other purposes within the subsection (4)

The sort of advocacy that disqualifies many groups in New Zealand is a permissable activity under English law. It is seen as appropriate for charities to raise questions about current law and to seek law changes. It is appropriate for charities to promote political positions. What is not appropriate is the endorsement or advocacy of the policies of a particular political party.

The law is currently under review in Engand, not to change the definitions, but to clarify them further and make them more consistent. It would be good if New Zealand took our lead from the good work being done over there, and make a definition of charitable purposes more in line with the understanding and purposes of the people who donate to charities, instead of making arbitrary judgements based around definitions that have outlived their usefulness.

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