Sometimes, disputes can occur between a charity's members, within its governing and management bodies or between the charity and a third party such as a landlord or supplier.
Disputes can have the potential to damage a charity. It’s important the officers and management act to address disputes swiftly by working in the best interests of the charity to minimise the negative impact on operations.
Your charity should have set policies and procedures for resolving disputes and complaints; these may be set out in your rules or in a separate policy document. By following prescribed written procedures, disputes are often able to be resolved promptly and internally.
What kind of matters will Charities Services not become involved in?
The role of Charities Services is to promote public trust and confidence in the charitable sector and to encourage the effective use of charitable resources. This means that we are unlikely to investigate disputes that relate to contractual, employment or service delivery matters, as these are issues that we expect a charity to manage internally.
We won't become involved if your concern is about a decision made by the officers of the charity that is within the law or within the rules of the charity. Also, we cannot overrule a decision, including deciding policy, made by officers that is within their powers to make, simply because others do not agree with it.
Deciding policy is a key part of officers' freedoms and responsibilities, and may include:
- seeking resolution to the dispute, including differences of opinion over spiritual or doctrinal matters, within religious or other belief-based charities;
- deciding how community facilities (such as a local hall, community centre or playing field) are used;
- deciding how to consult paid staff, volunteers, clients, members and other interested parties about decisions and policies of the charity they use or support; and
- the terms and conditions of occupancy or use of charity land and, provided that legal and constitutional requirements are met, its disposal.
When should we contact Charities Services and what can it do to help?
We encourage you to use all available methods to resolve the dispute before you contact us.
If you wish to make a complaint to Charities Services and you are sure all possible steps have been taken to resolve the matter, you should send us written details of your complaint, supported by evidence.
See Making a complaint for more details about how to do this.
If, after receiving your written complaint, we decide that your concerns require our involvement, we will assess the facts and determine the most appropriate course of action within the boundaries of the Charities Act 2005.
Where information or education for the charity or another party is appropriate, we will aim to provide it and try to secure a positive outcome for the charity.
How we provide a solution will depend on the level of risk involved to the charity's activities, beneficiaries, property or reputation, and the likelihood of a successful outcome.
Once a course of action has been agreed, we expect all parties to commit to implementing the solution.
When will Charities Services take regulatory action in a dispute and what is the likely nature of the regulatory action?
We will consider exercising our powers under the Charities Act 2005 when there is evidence of:
- the charity no longer meeting the requirements for registration;
- a breach of the Charities Act 2005;
- 'serious wrongdoing' in connection with a charity.
If the issue cannot be corrected, or the charity is not willing to comply with the Act, then formal action, including removal from the Charities Register, is possible.
We decide the best course of regulatory action to take based on an assessment of the:
- particular circumstances;
- seriousness and scale of the problem;
- level of risk to the charity (activities, beneficiaries, property or reputation);
- available evidence; and
- likelihood of a successful outcome.
The options available to us include providing information, education and assistance to help the charity to comply with the Charities Act 2005, enforcement, and, as a last resort, removal from the Register.
Enforcement options include issuing warning notices, publishing notices on the charity's listing on the Charities Register (the Register), administrative penalties, or prosecution for offences under the Charities Act 2005.
We can prosecute an organisation if it falsely claims that it is a registered charity on the Register, or if it does not provide required information or documents to us.
We may remove a charity from the Register if:
- the entity is not, or is no longer, qualified for registration as a charitable entity;
- there has been a significant or persistent failure by the entity to meet its obligations under legislation;
- there has been a significant or persistent failure by the officers or collectors of the charity to meet their obligations under the Act;
- the charity has engaged in serious wrongdoing; or
- a person has engaged in serious wrongdoing in connection with a charity.
We may inquire into any person who has engaged in conduct in breach of the Charities Act 2005 or where there is serious wrongdoing in connection with a Registered Charity. We do this if we consider the inquiry is reasonably necessary for the purposes of carrying out our functions and exercising our powers under the Act.
When should we approach other organisations and who should they be?
If there are no set procedures for resolving disputes, the process breaks down, or the written procedures need clarification, one or more of the people involved in the dispute should look for help from outside the charity.
An outside person or organisation will provide a fresh perspective and may help facilitate a quick solution.
You could consider:
- approaching your charity’s regional or national body, if there is one
- approaching a neutral and respected person from your community – for example, a kaumatua or community elder
- obtaining independent legal advice from a Community Law Centre or by engaging a lawyer
- approaching an agency that deals with dispute resolution in the area of concern – for example, the Ministry of Business, Innovation & Employment, the Disputes Tribunal or Tenancy Tribunal , or the Health and Disability Commissioner
- seeking help from a relevant government department or agency – for example, the Registrar of Incorporated Societies, Ministry of Education, Ministry of Health, Human Rights Commission, or Te Puni Kokiri; and
- employing a professional mediator or arbitrator.
You should seek help from an independent professional advisor if the dispute is about contractual or other property rights, which are matters between the charity and a third party. For example:
- employment issues or claims of unfair dismissal
- disputes relating to contracts with the charity, including landlord-and-tenant disputes.
You should also seek professional advice if the dispute is connected with a planning application or control of property development.
Contact Charities Services if the dispute is related to a breach of the Charities Act 2005 or serious wrongdoing in connection with a Registered Charity. You can find more information about when Charities Service will get involved in the Making a complaint section.