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Charities Commission takes shape

By Frank Claridge

The long-awaited Charities Commission came into existence on July 1 after parliament passed the Charities Act in April. The Act and the Commission are improvements on the Charities Bill first introduced in 2004.

Only the first part of the Act has come into effect so far. It sets up the Commission, with a board of seven members. The Commision has the tasks to provide a registration system for charitable organisations and to support and educate the charitable sector. Its other objectives are to monitor registered charities, encourage research into matters of interest to charities, and promote public confidence in the charitable sector.

The Act’s second part will come into effect once the Commission has established the systems needed to register charities. This should be early 2006 with registrations starting in May or June.

When the second part of the Act comes into effect, regulations will spell out details each application for registration must provide and information required with annual returns. It will also create several tiers of financial reporting and audit standards, depending on the size of the charity. Registration will not be mandatory but the current exemption from income tax and gift duty will only be available to registered charities.

The Charities Act follows common law definitions of charitable purposes: to relieve poverty or advance religion, education, and any other matter beneficial to the community. It implies that there must be a public benefit.

When a charitable organisation seeks to register, it must provide a copy of its rules, information about its current or proposed activities, and details of the officers. An organisation with branches or associated groups can register each separately, or apply for a single registration to cover all activities.

There will be no fee to register, but there will be a fee ($50 or $75) when each annual return is filed. Small organisations may be exempt from this. Initial registration, changes to officers, and the annual return will be done on-line or by filing print documents. The Commission will provide plenty of advice as the time approaches to register.

The board of the Commission has an office in Wellington and a chief executive. It is seeking other staff, creating computer systems, and establishing relationships with organisations in the charitable sector and government departments. It publishes a monthly email bulletin and has a website.

Members of the board and the chief executive are accepting speaking engagements. A brief Guide to the Charities Act has been published and is available on line or in print.

Churches need to prepare for the time when registration is available. The Methodist Church must decide at Connexional level whether to register as a single entity, or whether parishes, synods and connexional bodies should register individually.

The Church took part in workshops about the Act and will continue to monitor progress. It will circulate further information when it’s available. Enquiries may be directed to the Connexional Office or to the Charities Commission Other contact details are on that website.

Frank Claridge is a member of the Methodist Church’s Board of Administration and of the Board of the Charities Commission.