Charities Bill may hold fishhooks for churches
The Church is asking lay and ordained leaders to inform themselves about the Charities Bill the government is currently drafting. The bill has the potential to make life much more difficult for parishes and they should make their concerns known.
Methodist Connexional office manager David White says the main aim of the Charities Bill is to set up a Charities Commission to register and monitor charitable organisations.
“The bill itself doesn’t contain anything objectionable. Our concern is that once the Charities Commission is set up there will be no further discussion about how it functions. We feel this may be the last opportunity to influence its ultimate shape.
“The government doesn’t appear to have a good grasp of how churches were founded or fit together. We are not like other charitable organisations that raise funds through street appeals. We raise our funds from members and those members are in parishes that have separate financial accounting.”
David says the proposed Charities Commission will set up two registers. One is a register of approved donees, organisations that can receive charitable donations. The other is a register of charities with tax exempt status.
Organisations on the first register will be able to issue receipts for charitable donations so donors can claim a portion back on their taxes. It is not clear at this point whether the Methodist Church as a whole could register as a donee or whether every parish would have to register.
“The implications of this are quite significant,” David says. “If the church as a whole registered and had to process and record all weekly donations in a single place it would be unmanageable. On the other hand if too much of a burden is placed on parish treasurers it could drive them to the wall.”
The concern about the second register is the reporting it could require. New Zealand is currently adopting international corporate accounting standards and there are suggestions these standards should also be applied to the not-for-profit sector.
“Larger entities in the church such as the Supernumerary Fund, the Methodist Trust Association and the Methodist Missions would be able to comply with these reporting standards. But at the parish level it would be a nightmare. Most parishes operate with honorary treasurers who do a marvellous job for the church but who frequently have limited accounting experience,” David says.
“If parishes had to meet more rigorous audit requirements, they would have to get their accounts prepared professionally and that is a cost they would have to bear.’
“Our other concern is that registered charities will have to pay a registration fee as well as annual fees. The Charities Commission is likely to be a multi-million dollar activity so those fees could be sizeable. We say if the commission benefits government and the public, why don’t they contribute to it?”
David asks all parishes to ensure some leaders attend the workshops the Association of Non-Governmental Organisations of Aotearoa (ANGOA) are organising about the new bill. Both ANGOA and staff from the Ministry of Economic Development attend the workshops. Details of workshop locations and times are on website www.charities.govt.nz .
The Administration Division will distribute instructions to all parishes about how to prepare and make a submission.