Dave Henderson: Status quo harms charities' ability to serve and survive

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Non-profit organisations have been raising serious concerns over the deregistration of charities by the Charities Commission for some time now. The commission was set up to act as the "guardian" of what is charitable in this country. But it has taken on the role of policing the sector instead.

Through its narrow interpretation of the word "charitable", the commission has undermined the sustainability of several good charities. And a number of charities now find themselves on tenuous ground, operating with the fear that they may be deregistered.

But the Government's proposal to absorb the commission into the Department of Internal Affairs won't solve the problems the sector is experiencing.

When the commission was set up in 2005, one of the critical points for the sector was the need for an independent body that would support charities. Since then we, as a group, have taken issue with some things the commission is doing but, overall, the concept is sound. We need an independent commission that promotes public trust and confidence in the charitable sector.

Dealing with the issues would make more sense than scrapping the whole thing. It is hard to see how the essential autonomy and independence of the commission can be maintained if it is absorbed into Internal Affairs.

Plans to axe the commission at this point seem a disproportionate knee-jerk reaction to negative publicity and indicate a misunderstanding of the problems the commission is creating.

The key concern the sector has with the commission is with the way it is interpreting the definition of charity. It has been taking a restrictive, "ungenerous" approach to that definition in recent years, leading to a series of questionable deregistrations.

The solution is to review the definition and interpretation of the word charity in the Charities Act 2005. Recently, a group of 33 national organisations, networks and umbrella groups from across the non-profit sector met and reached a broad agreement that the proposal to absorb the commission must be abandoned, and the review of the Charities Act brought forward. A review is already set for 2015 but four more years of uncertainty is untenable.

So why isn't the status quo working? The commission describes its role as "policing" the sector - a term that is not in its act, nor is it what the sector and the New Zealand public need at this time. In future it needs to "support" the sector, respecting the ability of people to come together and work towards all manner of social, economic and environmental causes. This needs to take place without the threat of deregistration.

While the commission purports to be following the UK Charities Commission in its interpretation of the law, the UK commission has expressed shock that the New Zealand commission deregisters organisations solely on the basis of their advocacy.

That shock is also felt in New Zealand. When you take the example of an organisation such as the National Council of Women - more than a century old, widely respected, based on volunteer effort, speaking to government and society about the needs of vulnerable women and children - with the benefits accruing not to the council or its members but to those vulnerable groups among the New Zealand public (see Section 5 of the Charities Act), it is hard to see how the commission could find that NCW is not charitable. Clearly, it is only by a misunderstanding of the intent of this section of the act that the commission could take an action such as pursuing its deregistration.

The issue of advocacy by charities needs to be addressed: we need to move away from prescriptive black-letter interpretations. And the guide for future decisions needs to be based on whether organisations provide a public benefit. This is far more helpful to the development of a successful and resilient society than the current subjective assessment of whether an organisation is doing too much advocacy.

A review of the Charities Act also needs to create a more level playing field. Organisations must be able to ask for an independent review of commission decisions without having to resort to the High Court, where the cost for many organisations makes justice impossible.

Until a review takes place, we believe there needs to be a moratorium on deregistrations that are based on either advocacy or community economic development, as a matter of urgency. Once a moratorium is in place, then there can be a proper review of the Charities Act.

When the commission was first established there was great excitement about the potential for it to support a vibrant charitable sector. That optimism can return.

Government needs to take the bold step of making sure the commission fulfils its role to develop a resilient and sustainable charitable sector in Aotearoa/New Zealand.

* Dave Henderson is the co-ordinator of ANGOA, the Association of Non-governmental Organisations of Aotearoa.