Charitable Trusts & Tax

Introduction

 
 
Rotary clubs do not meet the criteria for approval as charitable bodies as defined by the Charities Act 2005 and to address this issue most Clubs have established Charitable Trusts to protect funds raised for charitable purposes. However Charitable Trusts must be operated correctly and ALL Club Officers, especially Presidents and Treasurers should make themselves familiar with the requirements of the Trust and the Club’s tax obligations, and to be aware and support the responsibilities of the Trustees.
 
To assist donors supporting the Rotary Foundation, the final Polio eradication funding drive, or other special activities, the District will consolidate donations prior to forwarding them to The NZ Rotary Clubs Charitable Trust. Such funds will be clearly identified with the donor Clubs.
 
November 2016: download a comprehensive Q&A document on this topic. pdf version here.   Word version here.
 
If you require further information as to how to use The NZ Rotary Clubs Charitable Trust please contact the District Foundation contacts listed below.
 

Brief Guidelines in relation to Charitable Trusts

  • Clubs must keep their bank accounts and financial accounts separate from their Charitable Trust, which must keep its own bank account i.e. they are two separate entities.
 
  • Requests for grants from the Trust by the Club should be made in writing addressed to the Trustees.
 
  • Always bear in mind that Trustees have a duty to act independently of the Club, and must act in the best interests of the beneficiaries, not the Club membership. However, the Trust’s activities should complement the Club’s community activities.
 
  • Meetings for both the Club and the Trust must be held separately and recorded that way.
 
  • Trustees must act prudently and with skill so their number should include experienced people. However, the Trustees also need to be in tune with the Club’s charitable activities so consideration may be given to including Club Board members as Trustees. Several models for Trustee appointment are available.
 
  • Clubs must complete a return to the IRD each financial year recording both income received and expenses incurred by the Club.
 
  • Trustees of the Charitable Trust must file an Annual Return together with a set of the Trust’s annual accounts within 6 months of the end of the financial year. The Annual Return form can be downloaded from the Charities Register website.
 
  • The NZ Rotary Clubs Charitable Trust (administered by NZ Guardian Trust) and Rotary New Zealand World Community Service (RNZWCS) has approval as an umbrella trusts to be used for all international, national and district special funds. The objects are sufficiently wide to cover almost all Rotary projects including international projects.

    The trust may be used for Paul Harris Fellowships and qualify for deductibility for income tax purposes.
 

Donee Status

Although Rotary Clubs cannot themselves be approved as charities they may be able to acquire an intermediate tax status as a “donee”. This enables donations to the Club in excess of $5 to attract a tax rebate (for individuals) or a deduction (for companies) but the Club still pays tax on its profit. Donee status is obtained from IRD, but is not automatic. Should Clubs or Trustees have concerns, questions or require support with tax, governance of the Trust, Foundation donations / contributions or any other related issue they can contact any of the following:
 

Contacts

 
Christopher Robertson (Port Nicholson)
Cell: 027 602 7947
PDG Pat Waite (Tawa)
Cell: 027 446 2003
 
John Freebairn (Palmerston North)
Cell: 027 249 5999