Charities Commission AGM; Renouf Foyer, Wellington Convention Centre

I would really have liked to join you today to celebrate the last twelve months of the Commission's work.  As it was not to be, I have recorded a short personal message to the Commission, and I have asked my Private Secretary to deliver a few words on my behalf.

Kia ora, this is just a very brief message to the Charities Commission to say thank you for the huge amount of work that you have done over the past year to get the numbers of charities registered. I know that has been a huge stress on the organisations, but you've made it and I understand that we are down to 200, which sure beats 2000-3000.

We are at a place now where we are going to be moving more towards monitoring and education. I know you can do it. This is really just an opportunity for me to say a really big thank you to the Commission, to the staff - to say that you have done a really great job this year and I am really pleased with where we have got to.

Na reira, tēnā koutou. [Video recorded message to the Charities Commission]

The Greek philosopher, Aristotle, summed up the theme for the last year of operations undertaken by the Charities Commission - Te Komihana Kaupapa Atawhai.

Aristotle said,

"You are what you repeatedly do.  Excellence is not an event - it is a habit".

The Charities Commission has proven the veracity of this view, through the inaugural registration process of charities.

More than 23,000 charities have been registered by the Charities Commission. Give yourself a huge pat on the back!

It's not just a matter of filling out forms.  During the year the Commission undertook online surveys to gauge perceptions of its communication with charities, and registered charities' experiences of filing annual returns. 

The findings were positive.

• 94% rated the Commission's Update newsletter overall as ‘excellent' or ‘good'.
• 58% said they found filing their charity's annual return ‘very easy' or ‘quite easy' to complete.

Many registered charities have now provided their first annual return to the Commission. This is a process that I expect will become easier as more charities are now familiar with the requirements.

While registration has been a key priority for the Commission I am keen that the Commission now starts to build greater confidence and expertise for itself, in other vital functions.  I'm thinking particularly of the need to develop and implement its education, monitoring and investigation functions.

Education, of course, is at the heart of any development pathway charities may want to follow.  The Commission is exploring how it can support existing education initiatives in the charitable sector, as well as determining the unique role it might play. For instance, the Commission has held two forums in Auckland this year and intends to hold more in other parts of the country in the coming year.

The Commission's monitoring and investigations function is crucial to maintain the integrity of the Register of Charitable Entities. It is important to the reputation of the charitable sector and the good work that you do that the Register is accurate and the information accessible. This is an area I am expecting the Commission to focus on in 2010.

Of course, when we talk about integrity and reputation, those are been hot issues for the media this year which have brought charities - and indeed the Charities Commission under the spotlight.

Two events stimulated widespread interest;

• Epilepsy New Zealand - particularly the high percentage of funds raised spent on telemarketing and operating costs.

• And the Telethon for KidsCan Charitable Trust. Specifically, the percentage of money raised being spent on operating costs. (I note the Trust has recently announced that 80% of the funds raised will go towards the charity's programmes).

As a result of all the media interest, there have been calls for charities to be more transparent about where money from fundraising activities goes. You have all been discussing this today.

I accept that these matters are contentious. And I believe that the fundraising sector itself must show leadership in improving its fundraising practice.

For this reason I directed the Office for the Community and Voluntary Sector to offer support to the Fundraising Institute of New Zealand as it develops its fundraising Standards. I encourage all fundraisers to get behind this initiative and to develop a sense of ownership over the Standards.

I am also keen to develop the role of the Commission and the Register of Charities in providing transparent information to the public. Watch this space!

Review of the Charities Act and Regulations

I often receive correspondence about the work of the Commission. As the responsible Minister I cannot involve myself in individual applications for charitable status, but I do take note of technical and policy matters of concern.

You will be aware that a review of the Charities Act and Regulations had always been planned to iron out anomalies in the law once the Commission got to a stage of ‘business as usual', following registration of the majority of charities.

The Department of Internal Affairs is currently talking with the Charities Commission and I to identify issues to incorporate into the review.  We are using this opportunity to respond to many of the concerns the public has raised with me in its correspondence.

As you'd expect, two key items on the agenda already are:

• the financial reporting requirements of charities, and
• clarifying the circumstances in which sports purposes are charitable purposes.

Financial reporting requirements

Obviously it's important that we're all singing off the same song sheet right across Government.   For this reason, I will be paying close attention to the outcome of current consultations by the Ministry of Economic Development on improving the financial reporting framework particularly as it relates to community organisations. This way, we can ensure consistency with any changes proposed in the Charities Act review.

Sports organisations and gaming machine societies

The interest associated with the sports purposes part, has been a recent feature of talkback.  There has been confusion in the media about gaming machine societies' ability to continue funding sports organisations and whether these organisations are charitable.

As far as I am aware, the gaming machine societies that exist to support ‘authorised purposes' under the Gambling Act can give money to sporting purposes as long as they are non-commercial and benefit the community, regardless of whether they were charitable.

However, some gaming machine societies are set up to support ‘charitable purposes'. These societies can still give money to sport as long as that sporting activity is being used to achieve a charitable purpose, promoting health, fitness, education, physical or social wellbeing through sport.

Impact of recession on charitable sector

If it feels like it's been a massive year - you're right.

Like all other sectors, the charitable sector has felt the impact of the recession. Levels of funding have reduced; funding sources have changed, while at the same time some parts of the sector have experienced a surge in demand for their services.

As a consequence, all organisations have had to take a closer look at how they work, and who they work with, in order to improve effectiveness and efficiency.   And that's not a bad thing.

The challenge for us all is - how do we grow the pool of volunteers and donors.  Six weeks ago I released a report that showed that the number of people volunteering and giving donations is stable. The trouble is, these people are spreading themselves thinner than they were a year ago across multiple parts of the community and voluntary sector.

Faced with the challenge of competing priorities for resources I have asked all of us to look at how we can collaborate, cooperate and communicate with each other to work more effectively.

Relationship with the sector

Within this, I expect to see the positive relationship between the sector and the Commission continue and grow.

The National Community-Government Forum that I hosted on 11 November demonstrated the commitment of Government to the community-government relationship.  I was really proud of the progress we made towards developing a community-government agreement or framework, which will eventually replace the 2001 Statement of Government Intentions for Improved Community-Government Relations.

Looking to the future

So it's onwards and upwards for us all.

As the Register of Charitable entities is now established and the requirements of registration become familiar, the challenge now for the Charities Commission is to continue to progress its goal of promoting trust and confidence in the charitable sector. 

I think that in the next year we will see an increased focus on the Register and the ways that the public of New Zealand and charities themselves can use the information contained in it.

The potential of the Register is only beginning to be realised. The donating public as well as funders will have uses for the information on the Register. This has potential to reduce some compliance costs for charities and to increase public confidence in the charitable sector.  Realising this potential is the challenge that faces the Commission and the sector over the next year and into the future. 

I wish you all a great day, and take this opportunity to wish you all the best of the festive season and I hope some time to relax with your families.