Passionate about Charities

A notable feature of many charities is the passion people bring to their governance, management and support. However, this passion can be misguided.   Passion for charitable purposes There is no doubt in my mind that a charity will only be effective in advancing its charitable purposes if it is governed by people who have a genuine interest in and passion for the charitable purposes of the charity. That governance passion will be reflected in the choices those in governance make when appointing managers (or doing the management themselves), and also in those who are attracted to support the charity with donations or their time. That passion for the charitable purposes can be misplaced: The charitable purposes set out in the charity’s constitution (a deed or declaration of trust, or the rules of a charitable society) are paramount, and need to be interpreted and understood objectively, and ultimately interpretation may require a court decision. The same rigour is required when considering more mundane machinery provisions in the constitution, such as how the constitution is amended and how those in governance are appointed or elected. Personal agendas can distort perceptions and the way a charity operates – the subjective (passionate) views of those involved can distort the objective (dispassionate) reality. Case in point The recent High Court decision in Solomon-Rehe v Hokotehi Moriori Trust [2015] NZHC 46 is an illustration of what occurs when the issues are not considered objectively.  As the first paragraphs of the judgment point out, “Hokotehi” is the Moriori term for unity, but the trustees were anything but united.  That disunity resulted in the Court replacing...

BEFORE JOINING A NOT-FOR-PROFIT’S GOVERNANCE GROUP

Should you get involved? If you are thinking about becoming more involved in a community organisation you need to do some due diligence before your election or appointment. In particular, you should consider the organisation’s reputation, obtain and study the organisation’s constitution, look at the last year’s minutes and annual accounts, attend a meeting of the committee or board, and consider who you will serve with. Most of those taking such office do so without first studying and understanding the organisation’s constitution, including its purposes and powers, how people become and cease to be members, the minimum frequency of general and governance meetings, how the organisation enters into contracts, the provisions for annual general meetings (when they are to be held, on what notice, and what is to be done at them), and how special general meetings are called and held. Few realise that the obligations of office require serious duties and obligations to be performed (never accept appointment or election as an “ego trip”), and few check that nomination and electoral processes are correctly followed (whether elected or appointed), or obtain material from outgoing officers. Getting into the detail Those who govern a society or charity have duties and responsibilities akin to those of company directors (the new Incorporated Societies Act will make this more explicit). That requires a thorough understanding of all sorts of things, some of which you may never have thought of before: Governance is generally “learned by doing,” and involves setting the policies and strategies of an organisation. In larger organisations it will involve guiding and monitoring those in management, and in smaller organisations...