What Does a World-Leading Framework of Charities Law Look Like?

Sue BarkerSue Barker, Director of Sue Barker Charities Law, shares how COVID-19 has impacted the charities law sector and what needs to be done to maximise the chances of being able to “build back better”. She will take a deeper dive into this topic at the Charities: Recovering and Maximising Opportunities Post-COVID-19 on Tuesday, 21 July 2020, available to watch live online or as an on demand recording.

 

If there is one positive thing that might have come about as a result of the COVID-19 pandemic, it might be an increased awareness of the importance and value of the charitable sector: where would we have been, as a country, during lockdown and beyond, without the charitable sector?

Critical to maximising our chances of being able to “build back better”, in the writer’s view, is getting the legal framework for charities right. Charities are currently labouring under a Charities Act regime that, in so many ways, acts as a barrier to their ability to carry out their work. This is particularly the case in crucial areas such as social housing, economic development, social enterprise, social capital and wellbeing, the environment, and sport, but there are so many others.

A recent election forum[1] highlighted a refreshing degree of cross-party alignment that the current settings are not working, and that communities know best what communities need. Perhaps the impact of the pandemic, and an increased level of awareness of the importance of supporting the work of charities, together with the timing of the upcoming general election, might provide a window of opportunity for charities to achieve some of the reform that is so badly needed?

 

A collaborative proposal for reform

As some of you may know, the writer is the recipient of the 2019 New Zealand Law Foundation International Research Fellowship, New Zealand’s premier legal research award.[2] The research topic is “what does a world-leading framework of charities law look like?”, with a report due by March 2021 (although this timeframe may be extended to September 2021 due to the coronavirus pandemic).

As part of the research, the writer has prepared a draft Bill that would amend and restate the Charities Act: the idea is to put a “stake in the ground” at the beginning, and then subject that thinking to challenge over the course of the research.

Of course, the initial draft is not an entirely standing start, as a reasonable degree of preliminary consultation has already been undertaken. For example, in the writer’s capacity as a member of the Core Reference Group for the review of the Charities Act, and with much-appreciated philanthropic support,[3] the writer, together with Dave Henderson of Trust Democracy, attended, spoke, and listened, at the 27 community engagement meetings held around the country during March and April 2019 for the review of the Charities Act.[4] The writer is also a regular contributor of publications and seminars in relation to charitable sector issues, and has been assisting charities with legal issues in a professional capacity since well before the enactment of the Charities Act regime in 2005.[5]

However, the goal in preparing a draft Bill is to create a starting point for discussion; we are currently in the process of conducting initial consultation on the bill, and then intend to consult as widely as possible, with a view to collaboratively creating a proposal for reform that genuinely meets the standard of being “by the sector, for the sector”. We readily acknowledge that no one of us has all the answers, but collectively and collaboratively we might be able to come up with something amazing.

 

Challenges and opportunities

There appears to be a reasonable degree of consensus that the charitable sector needs a voice by which it can speak directly to power. What might that look like and how might the legislation facilitate that?

Another key factor to bear in mind is that achieving legislative reform will not happen by accident. There is no question that the diversity of the charitable sector is something to be celebrated. However, if we are to make the most of the current window of opportunity that appears to be presenting itself, it is critical to work together with a genuine focus on what is in the best interests of the charitable sector as a whole.

We also need to take care to honour the 363 submissions that have already been made on the review of the Charities Act;[6] the writer is carefully working through each and every one of them as part of the research.

I have a sense that the New Zealand Law Foundation International Research Fellowship provides an important opportunity: essentially, it gives the charitable sector the services of a specialist charities lawyer for a year, for free, to try to collectively come up with a proposal for reform that might remove some of the barriers that are currently being experienced, and might genuinely allow the charitable sector to thrive and maximise its potential. Achieving this goal could only be in all of our interests, particularly as we seek to #buildbackbetter.

I encourage you to get behind this research: let’s put our heads together and make the most of this opportunity to really explore what a world-leading framework of charities law might look like. Then, let’s move from hui to do-ey, and work together to actually achieve some of the reform that is so badly-needed.

As you may be aware, the Minister has paused official work on the review of the Charities Act until November 2020. There does not appear to have been an official announcement, but members of the Core Reference Group and Charities Services’ Sector Group received an email to that effect on 13 May 2020 (the day before Budget 2020). A pause may be a positive development, as there were significant concerns regarding the nature, scope and timing of the official review.[7] However, a pause also presents a risk that Government may not proceed with the promised and much-needed first principles review of the Charities Act at all.[8]

All of this points to those oft-quoted 10 little 2 letter words: “If it is to be, it is up to me”.

 

Last word

The research we are undertaking is independent of government, and presents a once-in-a-generation opportunity to create a framework of charities law for New Zealand that actually facilitates, rather than frustrates, charitable work. If you would like to be involved in the initial consultation on the draft Bill, please contact the writer at: susan.barker@charitieslaw.co. Any and all comments are invited and are very welcome.

We also invite you to join us at the Legalwise webinar to be held on 21 July: Charities: Recovering and Maximising Opportunities Post COVID-19

We look forward to seeing you there!

[1] Organised by Hui E! Community Aotearoa: https://www.huie.org.nz/; ComVoices: https://comvoices.org.nz/; Trust Democracy, and Sue Barker Charities Law, with support from the Todd Foundation, an election forum was held on Wednesday 10 June 2020, featuring representatives from 6 political parties: Hon Poto Williams (Minister for the Community and Voluntary Sector, Labour); Jan Logie (Parliamentary Under-Secretary – Justice, Green); Hon Tracey Martin (Minister of Internal Affairs, Children, Seniors and Associate Minister of Education, New Zealand First); Hon Alfred Ngaro (National Party Spokesperson for the Community and Voluntary Sector, Disability Issues, Pacific Peoples and Children); Brooke van Velden (ACT Party candidate for Wellington Central); and Geoff Simmons (Leader of The Opportunities Party (TOP)). Despite significant effort, there was no representative from The Māori Party able to attend. The forum was facilitated by Rawdon Christie, see: https://www.huie.org.nz/wp-content/uploads/Webinar-Summary-%E2%80%93-Educating-political-parties-to-help-the-community-sector.pdf, last accessed 20 June 2020.

[2] See: https://www.lawfoundation.org.nz/?p=10762&fbclid=IwAR3aQx3bOdRd9cSIp7Dn88dtRePLsiaHCSG3DDrAzMyp8JKsqCkcOe1IO2g, last accessed 20 June 2020.

[3] The writer would like to acknowledge with grateful thanks, the support of the following organisations in connection with ensuring a community voice is heard in the review of the Charities Act: the Todd Foundation: http://www.toddfoundation.org.nz/; Foundation North Te Kaitiaki Pūtea ō Tāmaki ō Tai Tokerau: https://www.foundationnorth.org.nz/; the DV Bryant Trust: http://www.bryanttrust.co.nz/; The Gift Trust: https://www.thegifttrust.org.nz/; the Bishop’s Action Foundation: https://www.baf.org.nz/; Trust Waikato Te Puna o Waikato: https://www.trustwaikato.co.nz/; Eastern and Central Community Trust: https://www.ecct.org.nz/; BayTrust: https://www.baytrust.org.nz/; Eastern Bay Energy Trust: https://www.ebet.org.nz/; Whanganui Community Foundation: https://www.whanganuicommunityfoundation.org.nz/; Otago Community Trust: http://www.oct.org.nz/; Community Trust South Te Pou Aratiki Pounamu o Murihiku: https://www.communitytrustsouth.nz/; and Strategic Grants: https://www.strategicgrants.co.nz/free-resources/charities-act-community-consultation. Thank you very much also to Grant Thornton New Zealand: https://www.grantthornton.co.nz/, RSM Hayes Audit: https://www.rsm.global/newzealand/ and Parry Field Lawyers: https://www.parryfield.com/, who very kindly provided venues for initial consultation meetings that took place over October and November 2018.

[4] https://www.dia.govt.nz/charitiesact#Consult, last accessed 20 June 2020.

[5] See for example The Law and Practice of Charities in New Zealand (LexisNexis, 2013); Regulating Charities: the Inside Story (Routledge, 2017); and Corporate Governance – A Practical Handbook (2ed) (Wolters Kluwer, 2016). The writer has also been a guest lecturer at the University of Otago LAWS 485 charity law/not-for-profit law summer courses, an invited speaker at the University of Melbourne Law School Masters Course Charity law for the 21st century, and a visiting fellow at the University of Western Australia Law School.

[6] https://www.dia.govt.nz/charitiesact, last accessed 20 June 2020.

[7] Some of these are discussed here: https://legalwiseseminars.com.au/nz/significant-issues-with-review-of-charities-act-2005/, last accessed 20 June 2020.

[8] See Labour Party 2017 policy at page 5: https://d3n8a8pro7vhmx.cloudfront.net/nzlabour/pages/8546/attachments/original/1504489890/Community___Voluntary_Sector_Manifesto.pdf?1504489890, last accessed 20 June 2020.

Sue Barker is the director of Sue Barker Charities Law, a boutique law firm based in Wellington, New Zealand, specialising in charities law and public tax law. Since its founding in 2012, the firm has won a number of awards, including Boutique Law Firm of the Year at the New Zealand Law Awards. Sue is a director of the Charity Law Association of Australia and New Zealand, a member of Charities Services’ Sector User Group, and a member of the Core Reference Group for the Review of the Charities Act. Sue is also a co-author of the text, The Law and Practice of Charities in New Zealand (LexisNexis, 2013), and a contributor to Regulating Charities: the Inside Story (Routledge, 2017), Corporate Governance – A Practical Handbook (2ed) (Wolters Kluwer, 2016), and Balancing Work and Life: a Practical Guide for Lawyers (LexisNexis, 2015). In 2016, Sue was made an Honorary National Life Member of the National Council of Women of New Zealand Incorporated for her work assisting the Council to regain their charitable registration. Examples of Sue’s specific experience can be found here.

Contact Sue at susan.barker@charitieslaw.co or connect via LinkedIn or Facebook