Adopting and adhering to recognised charitable purposes is an essential requirement for organisations in New Zealand to become registered charities.
Beyond compliance, however, charitable purposes can also be understood as Kaupapa. They guide the organisation’s decisions, shape its priorities, and provide a clear foundation for how it operates.
Having worked with hundreds of charitable organisations, our key message is this: the heart of the organisation is the purpose. It is what motivates people to do the work and is often the first thing that comes to mind when explaining why their organisation exists.
This purpose then becomes a lens for decision making. It helps determine how resources are applied, how financial and operational choices are made, and determines who sits on your Board. It also informs the activities a charity undertakes to fulfil its charitable purposes and meet one of the four recognised purposes to be registered as a charity:
- advancing education
- reduction of poverty
- advancing religion
- purposes beneficial to the community
Clearly defining your purposes is, therefore, a key first step for charities.
Those familiar with management terms will know the importance of having an organisational mission. The mission is the guiding light for employees and provides a lure to would-be customers. While a vision looks to the future, mission statements embed action into purpose.
This is no different for a charitable organisation. Being able to clearly communicate purpose or purposes allows an organisation to tell the world (and potential donors) what it does and why.
More fundamentally, it allows those who run or govern charitable organisations to fulfil their legal obligations when it comes to acting in the best interests of the charity.
Recent changes to the Charities Act 2005 require charities to undertake governance reviews every three years. Charities should use this an opportunity to ensure that any policies, procedures, and capability are consistent with their purposes.
Equally, charities might identify where gaps exist and how these can be filled to help better fulfil their purposes.
For well-established or long-standing charities, a governance review is also an opportunity to ask whether the organisation’s purposes remain fit for purpose. Over time, organisational focus can shift. A review allows charities to consider whether their kaupapa still reflects the work they do today and the impact they seek to have in the future.
If you’d like to find out more about how clearly stated charitable purposes can better serve your organisation, get in touch with our experienced Impact team. We would be happy to answer any questions that you have.
This article is provided for general informational purposes only and does not constitute legal advice. The information provided may not be applicable to your specific circumstances. You should seek independent advice from a qualified New Zealand lawyer before making any investment or immigration decisions.
