Legitimacy of some charity collectors questioned

Photo / Herald on Sunday

People handing over cash to charities need to be wary of where their money is actually ending up, the Charities Commission has warned.

While the commission monitored the registered organisations, chief executive Trevor Garrett said there was nothing to stop people holding buckets out under the guise of charity collecting, then keeping the money for themselves.

"When you walk down the road and someone's holding a bucket, collecting for the floods, you don't know if it's actually for the floods or if it's just collecting," he told NZPA.

"You can call yourself a charity and you don't have to be registered, so that's why we're saying to people to ask them 'are you registered?'."

There were particular concerns about the potential for scams following last month's Canterbury earthquake.

"When I talk to our colleagues overseas, after things like Hurricane Katrina and September 11 they found there were a lot of people who started collecting money that didn't go to a charitable purpose," he said.

"With Christchurch we are aware of at least one, so you can see that it's happening."

Appearing before Parliament's social services committee earlier today, Mr Garrett said the gap in monitoring was particularly apparent in cases where organisations had been deregistered.

Mr Garrett said organisations usually deregistered because they had shut down or did not need to be registered for tax reasons, but in some cases it was because the commission was putting unwanted scrutiny on the organisation's finances.

"If deregister an organisation we simply tell IRD and take that organisation off the register," he told the committee.

"So any funds which have been previously raised for charity purposes are now isolated with the organisation.

"If they didn't put the money towards a charitable purpose, which might be fairly easy to do, then there's no one looking after that."

Being registered gave organisations some credibility, and there was a risk of deregistered ones taking advantage of the public perception that they were still registered, Mr Garrett said.

"That's an issue that needs to be looked at. A member of the public probably won't make a distinction between registered and unregistered charities."

Mr Garrett said it was too early for him to recommend legislative changes to target the problem.

"We're starting to develop some good relationships with police and IRD, and as we get specific examples we will share information about charities and look at how we respond."

- NZPA