We received an expression of concern from an advisory trustee, who was approached by a personal acquaintance some months ago concerning the formation of a charitable trust.  Considering the overly ambitious nature of the proposal, the crowded market with competing good causes and the promoter’s relative inexperience and lack of resources he declined his professional assistance. To his surprise he recently received an invitation to a “Charity Launch Event” at a church service, where the charity promoter asked for the support of the congregation.  This prompted our informant to search the Charities Register to find that the entity had been duly registered based on a trust deed that, while setting out the aims and objects in great detail, was less informative as a directive on the governance and management of the trust.  It also indicated that of the original five trustees three had vacated their positions, leaving the promoter and his wife, who resides in Australia, one short of the minimum number as prescribed in the founding document. Our advisor questions the adequacy of existing provisions to protect the public against the shortcomings in voluntary governance to the detriment of the sector.

It is encouraging to see provisions in the Draft Incorporated Societies Bill requiring higher levels of competence and accountability from elected officers. They are lacking in the existing provisions for charity trustees without the envisaged prescriptive elements covering the contents of constitutions. Sad to say public confidence will suffer if charitable trusts can be incorporated at the instigation of a strongly motivated founder, which is frequently the case, without the benefit of the necessary qualifications and competencies among informally recruited associates and friends serving as co-trustees. These concerns are currently being addressed in the United Kingdom with the introduction of tighter regulatory provisions.

The New Zealand Association Resource Centre Trust has a prescriptive model supported by downloadable instruction sheets for the recruitment, selection and induction of trustees and their required skill sets to achieve consistent outcomes in good governance. Contact us if you require assistance in this area.

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