Risks for those in Not-for-Profit Governance in 2016

A “perfect storm” confronting those governing not-for-profits? Several items of legislative reform, some already enacted, and one proposed, have created real concerns for those governing not-for-profits. This article discusses some of those issues, and seeks to provide some reassurance to those governing not-for-profits.   Not-for-profit organisations are essential for strong communities The 2013 Law Commission Report, “A New Act for Incorporated Societies,” confirmed that a strong not-for-profit sector is important to the health of a mature and civilised society. The Commission asserted that “community organisations play a very important role in New Zealand society” and that they have “a direct impact on New Zealand’s social and economic development through the provision of services not provided by the other sectors and the development of strong communities.” The Law Commission noted that New Zealand has over 23,000 incorporated societies spanning a diverse range of interests and purposes, with approximately 45 per cent being cultural, sporting and recreational bodies, and the remaining 55 per cent covering a broad range of community activities, including social service providers, religious groups, development and housing bodies, educational and environmental interest groups, and business and professional groups. The Commission also argued that largely voluntary space in which incorporated societies operate is an important part of New Zealand society and of the economy (and Commission’s observations would also apply to charitable trusts).   Legislative reform threatening the essential role of community organisations? The Vulnerable Children Act 2014 (see Protection of Vulnerable Children) and Health and Safety at Work Act 2015 (see Health and Safety Issues) have caused significant disquiet amongst not-for-profit organisations (and the 2014 Act in schools),...