Starting a Charity or Incorporated Society in Southland: What do you need to do?

Starting a not-for-profit organisation in New Zealand requires careful consideration and planning. Whether you aim to establish a charity or an incorporated society, understanding the specific requirements and procedures is crucial for success. Here's a guide to get you thinking about the process. However, it is important to talk to an expert to help guide you to ensure that everything is set up correctly. In Southland, we have access to the Southland Community Law Centre which can support you with this process (as can other lawyers).

Choosing the Right Structure

The first decision is whether to set up a charity or an incorporated society. A charity operates much like a business and must have collective objectives, making it ideal for those aiming to provide public benefit. In contrast, an incorporated society is formed when individuals unite to achieve a common goal, requiring at least 10 members and a clear membership approval process.

Incorporated Societies: The Basics

For incorporated societies, the founders must draft a constitution that outlines membership rules, meeting frequencies, objectives, and governance structures, including boards and committees. It’s essential to also consider financial aspects, such as what audit processes, and exit strategies will look like.

Setting Up a Charity: The Foundations

Charities in New Zealand can utilise the Companies Register's constitution builder to meet basic requirements. Community Law Southland can assist in crafting an initial constitution. When establishing a charity, it's important to have a well-thought-out overaching goal, strategic plan, target audience, and a passionate board for governance, ensuring robust safeguards and transparency for accountability.

Registration and Legalities

Both types of organisations must handle specific legal requirements:

• Charities need to get their constitution signed off by a Justice of the Peace or a lawyer, obtain a RealMe login, and register with the Companies Office and the IRD. Although there is no fee for registering a charity, operational aspects like setting up a bank account vary by bank and require careful consideration of the terms. Make sure you talk to your bank to see what you need to bring and who needs to be present when setting up your bank account to avoid going backwards and forwards as every bank is different with what they will require.

• Incorporated Societies must complete an online application and pay associated fees.

Financial Considerations and Tax Benefits

Registering with the Charities Commission can provide tax relief and exemptions, enhance charity status, and offer benefits like donation claims and reduced bank fees. This registration can occur at any point once you are registered. 

Policies and Procedures

Once registered, drafting policies and procedures quickly is essential, particularly in governance and finance, to protect the organisation’s assets and ensure compliance, especially if employing staff. Community Law Southland offers templates and governance training to support these needs, all you need to do is contact them and they can provide you access to the list of templates. Community Law Southland also provides governance training as resource allows, so get in touch with them if you are interested in this. 

Operational Excellence

After becoming registered and you begin holding your meetings ensure that you maintain concise and transparent records of board meetings, decisions, and actions. This is vital for effective management and accountability for you as an organisation, but also for any funders should they need to look back on them. These records ensure clarity for internal review and external scrutiny.

This guide outlines the foundational steps and considerations for anyone looking to start a charity or incorporated society in Southland. The best thing to do is to have a look at the Companies Register for more information but to book a time with a lawyer to ensure you are creating the right type of organisation for what you are trying to achieve.