We want to start a community group. How do we go about it?
Before you start there are a number of things your group will need to consider. Firstly, you should all be clear about your purpose or aim and exactly what you want to achieve.
It is a good idea to do some research about what is currently available in your community. If there are other groups or organisations in your community already involved in the kind of activity your group wishes to undertake, consider linking up with them and supporting their work rather than setting up another community group to do the same things.
If you’ve decided to establish a new organisation (society), then your group will need to start the planning process. They’ll need to:
- identify its vision and aims
- decide on issues such as
- where the society will be based and the area it will serve,
- a timeframe for setting up and launching the society and when it will begin providing services to the local community,
- who else in the community needs to be involved in its establishment and who needs to know about it, and
- the rules and policies which will govern and guide the organisation. For information about the sorts of things your organisation’s rules will need to include, go to the Community Law website. You can also see a sample set of rules at the Societies and Trusts Online website.
The next phase will be planning how your organisation will put its vision and aims into practice. This could include developing:
- a strategic plan which outlines the major goals for the organisation over the first few years,
- an operational plan which includes finer detail about exactly what the organisation will do to achieve the goals in its strategic plan, and
- any project plans for specific projects or major pieces of work your organisation wishes to undertake.
For further information on the processes for setting up a community organisation, see CommunityNet’s online Community Resource Kit.
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Should we make our community group an incorporated society?
An incorporated society is a separate legal identity - it can have its own bank account or hire people to work for the organisation. This is a good idea if the society intends to be around for a long time and will have its own money.
An incorporated society also has limited liability which means that the individual members can’t be pursued for the society’s debts. A minimum of 15 members is required for incorporation of an organisation.
For more information on why your group might want to become an incorporated society see the Community Law guide.
For guidelines on how to incorporate your society visit the Societies and Trusts Online website.
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How do I set up a charitable trust?
You might want to create a charitable trust if you have money or property that you would like to be used to help other people, either indefinitely or until it runs out. The money or property will be managed by a group of people (there must be at least two) called the trustees. The trustees will ensure that the money or property is used according to the purpose which is written in the trust deed.
A charitable trust must be formed for exclusively charitable purposes. This includes:
- the advancement of religion
- the advancement of education
- the relief of poverty
- other purposes beneficial to the community
Before trying to create a charitable trust, you should check with your lawyer that your organisation’s purposes meet the legal definition of ‘charitable purpose'. The lawyer can also tell you what is involved in being a trustee, and help you with drawing up the legal rules that will govern the trust (the “trust deed”).
To set up a charitable trust, you’ll need to:
- decide on a name for the trust, who will be the trustees and what will be in the trust deed. The Companies Office (0508 COMPANIES or 0508 266 726) can provide you with information about charitable trusts and the documents you’ll need to register.
- hold a meeting at which you’ll complete the necessary forms, approve the trust deed and elect officers (e.g. secretary, treasurer)
- send the completed forms to the Companies Office, who will notify you when your charitable trust has been incorporated and send you a certificate of incorporation. There is no fee associated when applying to register as a charitable trust.
This is explained in more detail in the CommunityNet guide.
The Societies and Trusts Online website has more information about this.
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What is required of organisations if they want to operate as charities?
If you want to be able to register your organisation as a charity in New Zealand - and receive the tax benefits of being a charity - you must register your organisation with the Department of Internal Affairs (DIA). Details on how to register your organisation as a charity are on the Charities Services website.
There are no application fees when you are registering a charity, however you will be obliged to submit an Annual Return each year, which costs between $50 and $80 depending whether you do it online or on paper. Once your organisation is on the Charities Register it must send a copy of its accounts to show how its money is spent each year. You can read more about reporting standards for charities. You’ll also need to notify DIA of any important changes, e.g. if you change the name of the charity or appoint new officers.
For more information about setting up a charity and what is required for maintaining an organisation’s charitable status, go to the DIA's Charities Services website.
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What’s the difference between charitable trusts and other types of charitable organisations?
Both are legal entities with charitable purpose, and must be registered as a charitable trust or incorporated society with the Companies Office. They can operate in the same way that a company or individual can, such as hiring staff, opening bank accounts (companies and non-charitable incorporated societies are also legal entities). Both entities can also be registered with the Charities Register e.g. to receive tax benefits.
Charitable trusts are run by trustees (there must be at least two), and are generally set up because someone has money or other assets which they want to be used for a charitable purpose. Charitable incorporated societies are run by members (there must be at least 15) and are generally set up because a group of people want to work together toward a charitable purpose.
A charitable organisation can be registered with the Charities Registrar without also being registered with the Companies Office as a charity. This means the organisation will receive the tax benefits but they are not a separate legal entity (e.g. it can’t have its own bank account, and its members could have personal liability for the organisations debts and responsibilities).
And lastly, a charitable organisation doesn't have to register with the Companies Office (as an incorporated society, for example) nor on the Charities Register. This means it can't operate as a separate legal entity and won't be eligible for tax benefits - but can still do charitable activities.
You’ll find more information about the key differences between an incorporated society and a charitable trust on the Societies and Trusts Online website and the Community Law website.
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What are the rules for running a meeting?
This depends on the rules for calling and running a meeting that are written down in your organisation’s founding document:
- If your organisation is a trust these will be in the trust deed.
- If your organisation is an incorporated society these will be the rules that your society was incorporated under.
- If your organisation is a company the meeting rules will be in the company rules you sent to the Companies office when the company was created; otherwise you can use the meeting rules laid out in the Companies Act.
Societies and companies will have to meet at least once a year and have an annual general meeting (AGM). At the AGM they meet to approve the annual financial statement. For more information on how to run a meeting successfully, try the SPARC website or view Community Net's introduction to meetings.
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How do I find out who the board members are of a charitable trust?
This information is often held on the charitable trust’s website.
If the charity has registered with the Department of Internal Affairs then you will find the names of all officers, both current and all past ones since the organisation was first registered, by searching the Charities Register.
You might also be able to find this information on the Ministry of Building, Innovation and Employment's (MBIE) Societies and Trusts online register however it is optional for a Trust to provide information here on its officers and / or trustees.
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Is there a way to find out whether or not an organisation is a genuine non-profit charity?
You can check the Charities Register. Only organisations that are not for profit and have genuine charitable goals can be registered with the Charities Commission. You can also check the annual returns of an organisation on the Charities Register to get some idea of how the charity spends its money each year.
Only charities that are registered are eligible for tax exemption and can call themselves ‘registered charitable entities’. However, a charity can still legally call itself a charity even if it is not on the Charities Register. If they are not registered then it’s harder to know for sure whether they are a genuine charity.
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Our local society is having problems with the committee. What should we do?
The proper way for societies to go about reporting, running meetings or otherwise conducting its business is set out in the CommunityNet section on governance.
If the problem your committee is having is a legal issue, you could approach your lawyer or local Community Law office.
If there is a dispute between committee members that you can’t resolve between yourselves, mediation is an option. Mediation involves bringing in an outside person who is skilled at resolving disputes to help the parties come to an agreement. There is generally a fee involved for this service. To find a mediator near you, search the Arbitrators’ and Mediators’ Institute of New Zealand website or contact your local CAB.
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Who can I complain to about a charity’s behaviour?
If you think a charity has behaved unethically or illegally, you can contact Charities Services. They do encourage you to approach the charity first, in case the issue can be resolved this way.
To make a complaint about a charity – even one which is not on the Charities Register - you will need to know the name of the charity (and its registration number, if you know it). It will help to provide some evidence of what’s been done and who was involved. You can make a formal complaint online or by writing to :
Department of Internal Affairs
PO Box 30112
Lower Hutt 5040
For more information and contact details see the Charities Services website.