Historic Places Amendment Toolkit
Guidelines for establishing a Charitable Trust or Incorporated Society, and funding options for Heritage institutions
A general guide that has been prepared by the Ministry for Culture and Heritage for HPT Branch committees looking to establish themselves as Charitable Trusts or Incorporated Societies.
The first thing you will need to decide is whether to establish yourself as either a charitable trust or an incorporated society.
The Companies Office (run out of the Ministry of Economic Development) looks after the registration of charitable trusts and incorporated societies.
There are a number of differences between charitable trusts and incorporated societies. Some of these differences are canvassed below. More detail on this, and any of the application processes mentioned in this guide, can be found by visiting the Companies Office website: http://www.companies.govt.nz/cms or by calling the freephone number (within New Zealand): 0508 SOCIETIES 0508 762 438.
Charitable Trusts
To be registered under the Charitable Trust Act 1957, a trust must exist principally or exclusively for a charitable purpose or a purpose that is religious or educational.
A charitable trust can operate in almost exactly the same way as an individual person can. A trust can hold property, raise mortgages, hold bank accounts and generally hold all types of assets and investments as long as it operates according to the powers set out in the trust deed.
Where there are five or more trustees they can incorporate as a charitable trust board. Incorporation as a board means the board, and not the trustees, will enter into all obligations, and it, not the trustees, will be sued if some default occurs. The trustees must continue to act to the high standards that the law requires whether or not they decide to incorporate as a board.
You can find further information at: www.societies.govt.nz/cms/charitable-trusts or by calling the freephone number referred to above.
Incorporated Society
Key features of becoming an incorporated society are:
- A society becomes a separate legal entity once incorporated.
- An incorporated society can lease, rent, buy and sell property, borrow money and enter contracts in its own name. No member of the society can have personal rights or interests in any of the assets of the society.
- An incorporated society will continue as a separate entity even though its membership changes.
- Members will not be personally liable for the debts, contracts or other obligations of the society unless:
- The debts or obligations are incurred from activities undertaken to obtain money for pecuniary gain (profit), in which case every member involved will be personally liable for those debts or obligations; or
- The debts and obligations are incurred through unlawful activities, in which case every member involved will be personally liable for those debts or obligations
- Because the rules governing the incorporated society must meet the minimum requirements set out in the Incorporated Societies Act 1908, members can be assured that there will be certainty to the way the society is run.
You can find further information on Incorporated Societies and practical assistance with forms etc on this link from the Companies Office site: www.societies.govt.nz/cms or by calling the freephone number referred to above.
And information on incorporated societies is also available here:
http://www.companies.govt.nz/cms/other-registered-entities/incorporated-societies
Charitable Status
If you wish to apply for community based funding such as Community Trusts, your organisation will need to have charitable status.
To establish yourself as having charitable status, you will need to apply to the Charities Commission. Registration as a charity means that you should receive an income tax exemption from the IRD and that supporters or funders will be able to find detailed information about your organisation on the Charities Register. Registration as a charity does not affect an organisation’s legal entity status or any obligations an organisation may have under the legislation it is established under (such as the Charitable Trusts Act 1957 or the Incorporated Societies Act 1908).
The Charities Commission stipulates that organizations must meet requirements in order to be registered as a charity. These include:
Registration as a charity is straightforward and can be done on the Charities Commission website at www.charities.govt.nz. If you wish to apply by post you can do so by calling the Charities Commission on 0508 242 748 and asking them to post a Registration Information Pack to you.
Charities are required to submit Annual Returns to the Charities Commission. The Annual Return asks for a copy of the charity’s financial accounts and includes a statement of the financial performance of the charity. Incorporated societies that register with the Charities Commission only need to send an Annual Return to the Commission, and are not required to send Financial Statements to the Companies Office.
Information on running a charity can be found on the Charities Commission website www.charities.govt.nz or by calling 0508 242 748.
Funding options for heritage institutions and projects:
Funding
There are a great number (over 700) people and organisations that make grants and give funding.
The Funding Information Service offers a database FundView which lists funders and funds groups can apply to. Depending on which part of the country you are located, in many places access can be free through the local community (such as in the library or at the local council, or at a university. You can email Funding Information Service or call them and ask them where is your closest free site. Their website is at www.fis.org.nz and phone number is 04 471 8900.
Access to this site, and broader funding for the arts, culture and heritage sector is available also on the Ministry’s website: website http://funding.mch.govt.nz/
Department of Internal Affairs list gaming machine funders on their site: http://www.dia.govt.nz/diawebsite.nsf/wpg_URL/Services-Casino-and-Non-Casino-Gaming-Funding-For-Community-Groups?OpenDocument
Where to go for more help
The websites mentioned in this document provide information on the registration processes set out above and provide helpful information such as fact sheets.
For specific, free advice you can visit your local community law centre. To find your local community law centre visit http://www.lsa.govt.nz/about-us/legal-services/community-law-centres.php.
Copyright and disclaimer
This guide draws substantially on content from the Societies and Trusts Website (Companies Office) and the Charities Commission Website. This content is protected by New Zealand Crown copyright. Whilst every effort has been made to ensure its accuracy, the Crown will not be liable for the provision of any incorrect or incomplete information. Specific advice should be sought before applying any of the information.