Understandability and Transparency of the Financial Statements of ...

New Zealand‟s charitable purpose definition currently only has four „heads‟ (Chapter
Two section 2.2). This narrow focus limits the public‟s understanding of the meaning
behind charitable purpose, particularly in relation to advocacy, which is explicitly
excluded as a charitable purpose under section 5(3) of the Charities Act 2006:
To avoid doubt, if the purposes of a trust, society, or an institution include a
non-charitable purpose (for example, advocacy) that is merely ancillary to a
charitable purpose of the trust, society, or institution, the presence of that noncharitable
purpose does not prevent the trustees of the trust, the society, or the
institution from qualifying for registration as a charitable entity.
The New Zealand Charities Commission conducted a survey (Charities Commission,
2008e) which determined respondents‟ knowledge about what constituted charitable
purpose. Of those surveyed 64% thought that advocacy organisations such as
Greenpeace were charities and 52% considered environmental advocacy organisations
were also charities. This identifies a gap in the „charitable purpose‟ definition in New
Zealand as any organisation that considers their prime purpose to be advocacy, i.e. the
active support of their charity‟s mission or cause, does not meet the definition. Hence
organisations such as Amnesty International (CC35331) have deemphasised the
advocacy nature of the organisation. Their charity summary page on the Charities
Register identifies their prime activity as undertaking research. Then follows six other
activities, the last one being advocacy. Interviewees confirmed that perception with
Interviewee 18 saying “It‟s an interesting public argument that one because the man in
the street turns to Greenpeace as a charity, people go yes, it should be.” Also the
Sensible Sentencing Trust was told that it was not beneficial to the community and that
the trust's public role advocating for victims was not appropriate behaviour for a charity
(Tapaleao, 2009).
Several interviewees were scathing of this exclusion with Interviewee 12 representing
their feelings that advocacy lies at the heart of the meaning of charity:
Yes, well they‟re wrong there [advocacy not being a charitable purpose]. As long
as it‟s not involving political, in other words supporting a particular political
stance or anything else. That‟s what charities are for, that‟s why they exist. We
don‟t just exist to get money to go spend it. You want it to actually bring about
change. And you‟re the best ones at the coalface to know exactly what the root
cause of the problems are. So of course you should go to government and say
look, we know what the problems are and we suggest that maybe we look at … If
you can‟t do that, then what‟s the purpose [of charities]? (Interviewee 12 MA)
Australia has a similar problem with not including advocacy, and currently advocacy
organisations there have banded together to support a charity group which was stripped
of its favourable tax status because of its advocacy. This charity has won the right to
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