OPINION
IMHO: New NFP governance book worth your time
There are few books written in New Zealand on governance and even fewer have a focus on charities.
There are over 115,000 not-for-profit organisations (NFPs) in New Zealand according to a recent Statistics New Zealand report. Many are facing an uncertain future as they grapple with a number of challenges including a decline in the availability of philanthropic funds, an inability to fundraise in the usual manner and a decrease in the number of individuals willing or able to donate money or volunteer. This is a time when NFPs are most needed in our communities and many are experiencing a greater demand for services than ever before. It is testing for those governing NFPs but there are a number of support packages and measures available to help organisations continue to provide services including to our most vulnerable.
The government has announced a number of economic support packages and relief programmes which NFPs may be eligible for including:
The government has announced that it intends to introduce a Bill to give commercial tenants more time to catch up on overdue rent before a landlord can evict them. It intends to extend the current 10 working day timeframe that commercial landlords may cancel a lease to 30 working days. Legislation enacting the temporary change is expected to be introduced next week and retrospective.
Some commercial leases have clauses relating to circumstances where a tenant has no access to the premises during an emergency, which may give rise to a rent and outgoings abatement. This is explained further in MinterEllisonRuddWatts’ article COVID-19: What’s fair when it comes to rent and outgoings abatement?
The government is introducing legislation (as part of the insolvency relief package referred to above) to relax certain statutory deadlines (eg for holding AGMs, and filing annual returns) for some entities including incorporated societies and charitable trusts. There will also be temporary relief for entities that are unable to comply with obligations in their constitutions or rules because of the impacts of COVID-19. Entities will be able to use electronic communications (including electronic meetings) even if their constitutions or rules do not cover this.
Charities Services has provided further information on COVID-19 for charities. It notes “While charities are generally required to follow their rules, we won’t take compliance action against charities that are taking practical steps to prevent the spread of COVID-19. You must prioritise taking steps to minimise social contact, even if this breaches your rules on how you should carry out your AGM or meetings.” Charities Services will also provide extensions for any charities who cannot file their annual return on time due to COVID-19 and won’t take any action on late returns during the lockdown period. Extensions may also be available if audits cannot be completed due to COVID-19.
Many NFPs may have received funding for certain initiatives or projects prior to COVID-19, and now find themselves unable to complete them, or to fulfil their funding obligations. It is advisable for any NFPs in these circumstances to contact their funders as soon as possible to discuss the situation and agree a solution. Many funders have already agreed to change their funding models to assist in supporting the NFPs through the COVID-19 period.
We’ll continue to keep members updated of any significant changes that are relevant to NFP boards.
Also see an article by Steven Moe MinstD Charities, NFPs and Covid-19: Where to? answering our questions on challenges and opportunities facing the sector.