Most of what we know about the activities of Waipareira Trust, and the resulting Charities Services’ investigations, is due to tenacious reporting by NZ Herald’s Matt Nippert. Waipareira will likely go to great lengths to contest any deregistration decision but, if it is upheld, this will have seismic financial implications for the trust and its continued operation.
Waipareira has been a registered charity since 2008. Its stated purposes include promoting health, promoting social and economic welfare, and advancing education. It employs some 200 full-time staff, has hundreds of volunteers, and is the largest integrated non-governmental social services organisation in New Zealand. Its annual report for 2023-2024 says it has net assets of over $100 million (including $75 million in cash and cash equivalents) and over $20 million net annual surplus.
The details regarding the impending deregistration decision are sparse – just a short note buried in Waipareira’s annual financial report. Nothing is on the Charities Services website. We know from reporting and associated Official Information Act releases that the regulator has previously raised concerns about Waipareira allegedly failing to manage conflicts of interest and display a reasonable standard of management expected of a charity. We also learned that its executives have received eyebrow-raising remuneration.
Until a restructuring this year, the average salary for its 13 or so executive staff in 2023 was over $510,000 – the highest-paid charity executives in the country if not Australasia. This is surprising given that its revenue and assets are smaller than much larger charities such as the University of Auckland or Ngāi Tahu. The Charities Services’ guidance states that salaries must be “reasonable”, which means open market value. Unreasonable salaries and conflicts of interest raise questions around whether decisions are being made in the best interests of the charity or whether personal interests are affecting decisions.
It is Waipareira’s political activity, however, that would appear to underlie its deregistration. The Charities Services guidance is clear: charities must be independent from political parties and candidates. This means that they cannot support or oppose a political party or candidate. The Supreme Court confirmed this long-standing rule in the Greenpeace case. Overseas jurisdictions, such as Australia, Canada, Ireland, and England and Wales, have the same strict rule.
This rule means that while charities may support specific policies that advance their charitable purposes, or encourage people to vote, they cannot donate to an election campaign, give an endorsement, tell people who to vote for, or allow their resources to be used without compensation.
The difficulty for Waipareira is that it appears to have done just that, and multiple times including after receiving a formal warning notice from the Charities Registrar. In December 2019, it gave money – around $150,000, and 56 percent of the total cash donations – to the mayoral campaign of its chief executive, John Tamihere, who is also the president of Te Pāti Māori.
Following an investigation by the Charities Services, this donation was later said to be an interest-free related-party loan to Tamihere. When Tamihere became a Te Pāti Māori candidate in the 2020 general election, Waipareira also repeatedly provided financial support to the campaign.
In total, Waipareira gave Tamihere just over $385,000 in interest-free loans to “pursue the general elections and his political aspirations”. These have now been repaid (around the same time that executive salaries increased by 77 percent). More than $200,000 was given by Waipareira to Te Pāti Māori in 2020 and then, in the 2023 election and after it had received the warning from the regulator, it hosted Te Pāti Māori’s campaign launch and provided text messaging services encouraging its contacts to vote for the party.
At one point, during discussions with the Charities Services about these political donations, lawyers for Waipareira tried to get the regulator to contract out of releasing certain documents under the Official Information Act in exchange for the charity agreeing to request repayment of the money.
Given the stakes involved and the lengthy legal tussle now anticipated, it might be time to go back to basics and explain why political activity by a charity can be problematic. While the Supreme Court only recently clarified in the Greenpeace case that New Zealand charities may have political purposes, charities have always been permitted to engage in political activity provided it furthers their charitable purposes. After all, sometimes supporting a certain policy or cause can help to promote a charity’s purpose.
A charity that aims to relieve poverty, for example, may wish to campaign in favour of a policy it thinks will do that, or against a policy it thinks will exacerbate poverty. A charity whose purpose is to improve public health may campaign for stricter alcohol licensing. This sort of campaigning can be an important part of a charity’s role. Charities have a wealth of expertise and experience in the areas related to their purposes and are expected to contribute to public debate and hold government to account.
It may well be that Waipareira sees supporting Te Pāti Māori, and indeed the political ambitions of its chief executive, as a way to promote its charitable purposes. Te Pāti Māori’s policies, it might argue, are the best way to improve public health, welfare and education. It makes sense then, according to this reasoning, for the charity’s resources to be used to get Te Pāti Māori into government.
Similarly, its chief executive’s public policy statements in his mayoral campaign were consistent with Waipareira’s position on social housing policy. Waipareira argued to Charities Services, therefore, that supporting Tamihere’s campaign would advance its charitable purposes. However, Waipareira was not just supporting particular policies of Te Pāti Māori or Mr Tamihere through advocacy and the like. Rather, it has been using its resources to fund the party’s and Tamihere’s political campaigns more generally. In effect, Waipareira was giving support to all the campaigns’ policies, not just those consistent with their charitable purposes.
So why then are charities not permitted to support political parties or candidates? Aside from the actual or perceived conflicts of interest at play with Waipareira (its chief executive was also a political candidate and the president of Te Pāti Māori), three main reasons underpin this general rule.
The first reason has been explicitly given by the Charities Services. A charity’s funds should only be used to advance a charity’s purposes. Supporting a political party or candidate is not consistent with a charitable purpose. This is because not all purposes of political parties are charitable. They have a range of policies that go far beyond those that can be linked to recognised charitable purposes such as health or education.
In Waipareira’s case, it also led to a private (not public or charitable) benefit to its chief executive. Let’s not forget also that most of Waipareira’s funding comes from contracts with government to provide social services. This, combined with the tax benefits that come with being a registered charity, means that it is effectively funded by the state and taxpayer. Donations to a political party result in money intended for non-partisan charitable purposes aimed at benefiting the public being redirected to further the interests of a partisan non-charitable organisation.
The second reason charities must not support political parties is that it compromises their independence. A hallmark of charity is that it is independent of government. This independence is crucial to any democracy because it enables charities to hold government to account and provide diverse (and dissenting) viewpoints. A charity that becomes intertwined with a political party blurs the boundary between government and the charity sector which means it loses its distinct and important role.
The final reason is more abstract. A key feature of charities is that they are altruistic. They are based around the idea that the benefits of charitable status should be given to those who help others – the ‘stranger’ – rather than those to whom we already have loyalties, obligations, or personal connection.
As Justice Joe Williams explained when deciding that Family First NZ could not be a charity, selflessness or selfless giving is a “touchstone” to determine if something is charitable. A self-regarding purpose cannot be charitable. While political parties do pursue public goods, donations or other support of one political party or candidate over another – a blatantly partisan act – is inconsistent with the other-regarding or selfless nature of charity. Rather, such support is orientated towards self-interest and securing political power for one’s own group or interests rather than helping others.
Supporting a political party is therefore seen as inconsistent with the selflessness that underpins charity. The charity sector then becomes less about the common or public good and more about partisanship and advancing one’s own interests. In sum, allowing charities to donate to political parties or candidates would undermine, if not irreparably harm, what is valuable about charities: they pursue beneficial purposes, they are independent of government, and they are about helping others not advancing one’s own self-interest.
Where to from here? The implications of deregistration for Waipareira would be serious. It would lose its income tax exemption. It may need to redistribute its assets to another charity to avoid paying a one-off tax on accumulated assets. It is also questionable whether it would be able to continue in its current legal form. While it would lose its donee tax status, this may be less significant given donations are not its main source of revenue.....The full article is published HERE
The details regarding the impending deregistration decision are sparse – just a short note buried in Waipareira’s annual financial report. Nothing is on the Charities Services website. We know from reporting and associated Official Information Act releases that the regulator has previously raised concerns about Waipareira allegedly failing to manage conflicts of interest and display a reasonable standard of management expected of a charity. We also learned that its executives have received eyebrow-raising remuneration.
Until a restructuring this year, the average salary for its 13 or so executive staff in 2023 was over $510,000 – the highest-paid charity executives in the country if not Australasia. This is surprising given that its revenue and assets are smaller than much larger charities such as the University of Auckland or Ngāi Tahu. The Charities Services’ guidance states that salaries must be “reasonable”, which means open market value. Unreasonable salaries and conflicts of interest raise questions around whether decisions are being made in the best interests of the charity or whether personal interests are affecting decisions.
It is Waipareira’s political activity, however, that would appear to underlie its deregistration. The Charities Services guidance is clear: charities must be independent from political parties and candidates. This means that they cannot support or oppose a political party or candidate. The Supreme Court confirmed this long-standing rule in the Greenpeace case. Overseas jurisdictions, such as Australia, Canada, Ireland, and England and Wales, have the same strict rule.
This rule means that while charities may support specific policies that advance their charitable purposes, or encourage people to vote, they cannot donate to an election campaign, give an endorsement, tell people who to vote for, or allow their resources to be used without compensation.
The difficulty for Waipareira is that it appears to have done just that, and multiple times including after receiving a formal warning notice from the Charities Registrar. In December 2019, it gave money – around $150,000, and 56 percent of the total cash donations – to the mayoral campaign of its chief executive, John Tamihere, who is also the president of Te Pāti Māori.
Following an investigation by the Charities Services, this donation was later said to be an interest-free related-party loan to Tamihere. When Tamihere became a Te Pāti Māori candidate in the 2020 general election, Waipareira also repeatedly provided financial support to the campaign.
In total, Waipareira gave Tamihere just over $385,000 in interest-free loans to “pursue the general elections and his political aspirations”. These have now been repaid (around the same time that executive salaries increased by 77 percent). More than $200,000 was given by Waipareira to Te Pāti Māori in 2020 and then, in the 2023 election and after it had received the warning from the regulator, it hosted Te Pāti Māori’s campaign launch and provided text messaging services encouraging its contacts to vote for the party.
At one point, during discussions with the Charities Services about these political donations, lawyers for Waipareira tried to get the regulator to contract out of releasing certain documents under the Official Information Act in exchange for the charity agreeing to request repayment of the money.
Given the stakes involved and the lengthy legal tussle now anticipated, it might be time to go back to basics and explain why political activity by a charity can be problematic. While the Supreme Court only recently clarified in the Greenpeace case that New Zealand charities may have political purposes, charities have always been permitted to engage in political activity provided it furthers their charitable purposes. After all, sometimes supporting a certain policy or cause can help to promote a charity’s purpose.
A charity that aims to relieve poverty, for example, may wish to campaign in favour of a policy it thinks will do that, or against a policy it thinks will exacerbate poverty. A charity whose purpose is to improve public health may campaign for stricter alcohol licensing. This sort of campaigning can be an important part of a charity’s role. Charities have a wealth of expertise and experience in the areas related to their purposes and are expected to contribute to public debate and hold government to account.
It may well be that Waipareira sees supporting Te Pāti Māori, and indeed the political ambitions of its chief executive, as a way to promote its charitable purposes. Te Pāti Māori’s policies, it might argue, are the best way to improve public health, welfare and education. It makes sense then, according to this reasoning, for the charity’s resources to be used to get Te Pāti Māori into government.
Similarly, its chief executive’s public policy statements in his mayoral campaign were consistent with Waipareira’s position on social housing policy. Waipareira argued to Charities Services, therefore, that supporting Tamihere’s campaign would advance its charitable purposes. However, Waipareira was not just supporting particular policies of Te Pāti Māori or Mr Tamihere through advocacy and the like. Rather, it has been using its resources to fund the party’s and Tamihere’s political campaigns more generally. In effect, Waipareira was giving support to all the campaigns’ policies, not just those consistent with their charitable purposes.
So why then are charities not permitted to support political parties or candidates? Aside from the actual or perceived conflicts of interest at play with Waipareira (its chief executive was also a political candidate and the president of Te Pāti Māori), three main reasons underpin this general rule.
The first reason has been explicitly given by the Charities Services. A charity’s funds should only be used to advance a charity’s purposes. Supporting a political party or candidate is not consistent with a charitable purpose. This is because not all purposes of political parties are charitable. They have a range of policies that go far beyond those that can be linked to recognised charitable purposes such as health or education.
In Waipareira’s case, it also led to a private (not public or charitable) benefit to its chief executive. Let’s not forget also that most of Waipareira’s funding comes from contracts with government to provide social services. This, combined with the tax benefits that come with being a registered charity, means that it is effectively funded by the state and taxpayer. Donations to a political party result in money intended for non-partisan charitable purposes aimed at benefiting the public being redirected to further the interests of a partisan non-charitable organisation.
The second reason charities must not support political parties is that it compromises their independence. A hallmark of charity is that it is independent of government. This independence is crucial to any democracy because it enables charities to hold government to account and provide diverse (and dissenting) viewpoints. A charity that becomes intertwined with a political party blurs the boundary between government and the charity sector which means it loses its distinct and important role.
The final reason is more abstract. A key feature of charities is that they are altruistic. They are based around the idea that the benefits of charitable status should be given to those who help others – the ‘stranger’ – rather than those to whom we already have loyalties, obligations, or personal connection.
As Justice Joe Williams explained when deciding that Family First NZ could not be a charity, selflessness or selfless giving is a “touchstone” to determine if something is charitable. A self-regarding purpose cannot be charitable. While political parties do pursue public goods, donations or other support of one political party or candidate over another – a blatantly partisan act – is inconsistent with the other-regarding or selfless nature of charity. Rather, such support is orientated towards self-interest and securing political power for one’s own group or interests rather than helping others.
Supporting a political party is therefore seen as inconsistent with the selflessness that underpins charity. The charity sector then becomes less about the common or public good and more about partisanship and advancing one’s own interests. In sum, allowing charities to donate to political parties or candidates would undermine, if not irreparably harm, what is valuable about charities: they pursue beneficial purposes, they are independent of government, and they are about helping others not advancing one’s own self-interest.
Where to from here? The implications of deregistration for Waipareira would be serious. It would lose its income tax exemption. It may need to redistribute its assets to another charity to avoid paying a one-off tax on accumulated assets. It is also questionable whether it would be able to continue in its current legal form. While it would lose its donee tax status, this may be less significant given donations are not its main source of revenue.....The full article is published HERE
Jane Calderwood Norton is a senior lecturer at the University of Auckland, Faculty of Law where she teaches Equity and Public Law.
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