Marianne Elliott: Unravelling charities' ability to do good

Charities receive tax privileges, and the Government appears to be seeking to "save money" by limiting the number of charities able to access those tax privileges. Photo / 123RF

Opinion

A bill now before Parliament would remove their right to challenge decisions affecting their tax privileges.

• Marianne Elliott is the cofounder of the independent charity advocacy group, ActionStation, and a human rights lawyer.

When New Zealand's oldest women's rights organisation, the National Council of Women, lost their charitable status in 2010, their members fought back, eventually regaining it on appeal in 2013. However, their experience demonstrated the risk to charities in New Zealand who engage in activities that cause embarrassment to the Government and which could be defined as "political advocacy".

In 2012, despite overwhelming opposition from the charitable sector, the Government got rid of the Charities Commission. Since then, the Department of Internal Affairs has continued to limit the definition of charitable purpose, preventing many good charities from being able to access charitable registration, or preventing them from speaking out for fear of losing it.

Charities receive tax privileges, and the Government appears to be seeking to "save money" by limiting the number of charities able to access those tax privileges. But the Government is ignoring the reasons why charities receive them. It is overlooking that charities respond to community needs, often much more nimbly and efficiently than government agencies. Allowing charities to do so allows them to form an important glue that holds our society together.

But the Government decided it knew better. They cancelled the promised and much-needed review of the Charities Act, and now they're trying to further limit charities' rights of appeal.

A bill before Parliament's government administration select committee would remove the ability of charities to appeal any decisions of the chief executive of the Department of Internal Affairs.

The specific impact of this change is that charities lose their ability to appeal against rulings of the chief executive, including a refusal of access to the charities register, or a decision that the financial statements of a charity fail to comply with a financial reporting standard, or a decision to amend the register.

Losing the right to appeal against these and many other decisions that lie within the power of the chief executive could make life very difficult for a charity that found itself on the wrong side of the official's favour. This change doesn't increase the powers of that office, but it does remove an important check and balance on its power.

If the relationship between the community sector and a government was healthy this change might not seem significant but when charities doing good work in our communities already feel distrustful of the Government, and vulnerable to abuse of power, the removal of their statutory right of appeal is significant.

This is another in a series of small changes that are eroding the balance of power between the community sector and the Government, undermining the good work being done by charities on the front lines of our communities. It represents another slice at a community sector that is facing death by a thousand cuts. If each of these changes is small enough, they can each fly below the radar, and happen without public scrutiny.

While this particular change may appear small on its face, the changes to the ways charities are treated in New Zealand, in fact, represent a major change that is being accepted only because, like the proverbial frog in boiling water, it is happening slowly, in unnoticed increments. If all the changes that have taken place over the past 10 years were to happen in a single leap, it would cause significant public alarm.

The Department of Internal Affairs attempted to include an apparently small change in a bill before the select committee, which is meant to clear up "minor errors" in the law. However, this change would in fact remove charities' ability to appeal decisions of the chief executive.

When the community sector raised the concern that this change would have a significant impact on the charities sector, the chairman of the select committee removed it into its own piece of legislation, so the committee could receive public submissions on the change.

The Department of Internal Affairs continues to argue that this is only a minor, technical change, claiming that it simply corrects an error in the charities legislation, but this is not true.

The change appears small but is significant and represents another step in the gradual erosion of the power balance between the charity sector and the Government.

The charitable sector has in the past tried to tell the Government that the direction of charity regulation isn't working; that it was forcing them to close but the Government refused to listen. If they value the work charities do to respond to community needs, the Government needs to start listening, and it will only do that if the public sound the alarm.