27 Feb 2017

Charities deregister over 'jolly complicated' rules

5:10 pm on 27 February 2017

New financial reporting rules for charities are "too complicated" and need to be simplified, a charity support company head says.

Thousands of charities have been threatened with being thrown off the official register.

The Department of Internal Affairs is to review the rules in June[thumbnail:31845:full] Photo: 123RF

RNZ last week revealed that only 59 percent of charities meet their legal requirements, according to a Department of Internal Affairs audit.

The review looked at about 1000 charities over a six-month period.

Charities have had to provide reports and audits dependent on their size since April last year.

Funding consultant Thea Mickell said dozens of charities had told her they could not afford the increased compliance cost.

Her business, Thea Mickell Services, works with not-for-profit entities to help them secure funding and manage their financial systems and administration.

"One of the groups we work with, their annual audit fee would've been $3000 to $4000 and this year it leapt up to $9000."

Ms Mickell said some were choosing to deregister.

"It's all so jolly complicated, really. It would be so good if it was made simpler. There's just so much compliance in being a charity. It's not straightforward at all."

The Department of Internal Affairs is to review the rules in June, but last week said it was comfortable with the response from charities so far.

Minister for the Community and Voluntary Sector Alfred Ngaro said the new standards were important to help the public trust how charities received and spent their money.

In a statement issued last week, he said he was keen to look at what could be done to making the administration requirements easier for charities.

Get the new RNZ app

for ad-free news and current affairs