Charitable trusts – how to set one up

Published 15 December 2022

[ 4 minutes to read]

Starting up a charitable trust

Charitable trusts are a popular option for charities when setting up their organisation. Around 14% of the charities on the Register are unincorporated charitable trusts, with a further 41% set up as incorporated charitable trust boards.

You do not always need a lawyer’s support in setting up a charitable trust, you can use the resources below. However, it can be important to get independent legal advice if you have a complex structure and especially if your charitable trust will engage in high value transactions such as financial loans and property contracts. Getting advice will help you understand your role, obligations and liabilities.

Being a charitable trust and being a registered charity are not the same thing. Not every registered charity needs to be a charitable trust, and there are other possible structures you can choose. If you have decided this is your best structure and want to know a bit more about how to set up your charitable trust we’ve pulled together a quick guide to some of the great information that’s around.

Where should I look?

The Community Toolkit(external link), developed by Community Law Wellington Hutt Valley(external link) is a great place to start. Their information on "Choosing the right legal structure for your group(external link)” has a page describing what a trust is, how one is created and the requirements for a valid trust.
CommunityNet Aotearoa(external link) have a sample charitable trust deed(external link) you can download and some guidance to help you to understand why each clause is required. It contains some clauses required by law and others that are included to encourage good practice. Most can be changed to suit the needs of the group. The sample deed also includes Māori translations of the headings which you can use if you choose to.
  You can also search the Charitable Trusts Register(external link), administered by the Ministry of Business, Innovation and Employment, to have a look at how other trust deeds have been written or find out how to incorporate a charitable board(external link) to create a separate legal entity from the trustees.
If you aren’t sure which structure will work best for you, you may want to watch our webinar – Societies, trusts, companies – which structure is right for your charity?

The Trusts Act 2019 came into force in January 2021 and applies to all trusts. You can watch the “Sharing Knowledge Series: Trust Law Changes and Charities” webinar.