Ellen Ramsay: Charity begins at home

COMMENT

The Government obviously intends to push ahead with legislation to establish a Charities Commission despite extensive opposition, particularly from rural New Zealand.

This was demonstrated by the appointment of Rick Barker as Minister for the Community and Voluntary Sector.

The Charities Commission is a key proposal of the Charities Bill, which is itself an example of needless bureaucracy.

The commission will preside over the establishment of a registration, reporting and monitoring system for all charitable organisations.

Its main responsibilities will be to approve and register charities, receive annual returns and monitor the activities of charities.

Further, it will educate, provide advice to and support the trustees and officers of charities to ensure they understand and can comply with core regulatory obligations and duties and it will provide advice to the Government.

While registration with the commission will not be compulsory, those charities not registered will be unable to claim charitable status and people who donate money to them will not be able to claim a tax deduction.

Regardless of what proponents of the bill say, the real beneficiaries of this proposal will be accounting firms, not those who should benefit from the millions of dollars New Zealanders donate to a raft of charities each year. Charities and the countless volunteers who give of their time and talents so generously to support them are the life-blood of rural communities, particularly since the centralisation of services in health, education and social services.

If passed, this bill will impact on some 30,000 charities in New Zealand that perform a range of essential functions. Government has drafted this legislation without any real knowledge of who most of these charities are, what they do and why they exist.

When Attorney-General and Commerce Minister Margaret Wilson launched the bill she said it would help to foster a culture of philanthropy and generosity within New Zealand.

This culture already exists in this country and the reality is this bill will have the reverse effect.

It will result in higher compliance costs being imposed on charitable organisations. These costs will be in the implementation of tighter accounting controls to preserve charitable status and so, fewer dollars will be available for charitable work.

Satisfying new levels of bureaucracy can be crippling for commercial businesses imagine how it will affect not-for-profit ones?

This proposal assumes all charities receive government funding, which this is not the case.

If the Government has issues with its funds going astray, it should implement tighter accounting controls through the Financial Reporting Act and not penalise genuine charities. Already, the Inland Revenue Department monitors both the approval and registering of charitable trusts, institutions and societies.

It has the expertise and records to substantiate any organisations charitable status.

Why alter this arrangement when tighter controls will rein in the few cowboys out there?

Small community charities, from health providers to sports groups, will find the expense of filing annual returns a burden they can do without. Larger groups too, like churches, often with numerous trusts, have similar concerns.

Government structures with the ability to allay any fears the public may have about how money they give to charities is managed already exist. The Charities Bill is a solution for an imagined problem and should be abandoned.

* Ellen Ramsay is a freelance journalist and former president of Rural Women New Zealand.