Hon Steve Maharey Speech Notes

More Than Just Good Works: Inspirational Philanthropy

Address to Philanthropy New Zealand's biennial conference. Duxton Hotel, Wellington.

Introduction

Thank you for this opportunity to open the biennial conference for Philanthropy New Zealand.

I am sure you have all heard the expression “that it is better to give than to receive” or other variations thereof.

In fact I am certain that many parents have admonished their children with this homily to instil in them a sense of sharing and co-operation.

I am equally certain that these same children probably found the concept incomprehensible while grappling with a sibling over possession of a toy.

However, it is a concept that sits at the heart of philanthropy. That the simple act of giving can ultimately have a far greater effect on our communities than one could possibly have imagined at the outset.

Philanthropy allows a seed of an idea to reach fruition with the application of a bit of practical benevolence. It is the privilege of helping someone fulfil a dream.

Imagine being in that position, what a tremendous honour.

We all have the power to give to others. But to give wisely requires judgement, vision and pragmatism. It is not the simple act I alluded to earlier.

Philanthropy New Zealand does make it easier.

The philanthropic sector in New Zealand

Since its inception in 1990, the original nucleus of 20 members has grown to 111 organisations representing private trusts, foundations, and those grant-making trusts unique to New Zealand created through the sale of community banks and energy utilities.

By providing an umbrella under which these organisations can be supported, the complexity of generosity can be unravelled.

Philanthropy New Zealand’s determination to provide an educational resource for its members, and raise awareness of taxation issues will contribute enormously to the effectiveness and growth of the philanthropic sector.

It will also ensure that a clear picture is developed of where and what private philanthropic trusts tend to fund and how much is actually going from the sector to fund community activities.

In this way, Philanthropy New Zealand can provide services tailored to the interests and giving capacity of donors and to help donors achieve their philanthropic and charitable goals.

In my role as Minister responsible for the Community and Voluntary sector, I can appreciate the enormous contribution philanthropy makes to the wellbeing of our communities.

Last year New Zealand philanthropic trusts gave out more than $120 million to charitable organisations, education initiatives, the arts, and sporting programmes.

But it’s about more than just doing good works.

Grant makers can clearly play an important role in helping to build stronger communities and invest in a society’s social capital by strengthening the ties that link people to one another.

This realisation introduces an element of strategic charity that looks beyond the lucky dip of worthy causes.

By encouraging community participation, and the effective mobilisation of resources and skills, recipient organisations can serve as catalysts, convenors, collaborators and facilitators to solve problems and develop solutions to important community issues.

The exponential possibility of philanthropy is inspiring.

It is generally the community and voluntary sector and those they serve, who benefit from the contributions of philanthropic trusts.

The Government is well aware that the energy and vision of this sector are vital to the economic and social wellbeing of our society.

It is time this effort is acknowledged and valued.

Building effective partnerships

Unfortunately, in the past the relationship between the Government and community and voluntary organisations has been characterised by mistrust and insecurity.

I know that it takes time to gain the confidence of a sector disillusioned and jaded by past experiences where their views were often not taken into account in the development of policies that would affect their communities.

But I guarantee we are working from a premise of genuine partnership, where the diversity and independence of the community and voluntary sector is embraced as essential to the wellbeing of all New Zealanders.

The Government will not shirk its responsibilities nor will it seek to devolve all accountability. Local solutions to local issues should never mean that Government has wiped its hands and walked away.

What we hope to build is co-operative partnerships where the best of joined up government and local thinking and resources are brought to bear.

Earlier this year a working party chaired by former Waitakere City Deputy Mayor Dorothy Wilson was established. The party is made up of representatives from government, and the community and voluntary sector, including both Maori and Pacific Island members.

Its purpose is to consider the scope of a proposed agreement between the Government, and community, voluntary and iwi/Maori organisations.

The party has adopted a multi-facet approach to represent the broad community and voluntary sector and is just one mechanism for engaging these groups – an initial phase of a longer process.

This involves talking directly with a range of people in leadership roles within national and umbrella groups from various strands within the sector. This includes iwi/Maori agencies, Pacific peoples, sport, fitness and leisure, environment, aid and development, social services, youth and women.

These groups know what is happening at the frontline in our communities. The Government believes in finding local solutions to local problems. The skills and solutions to many of the issues in our society reside in the community.

The desire to take an active role in rebuilding the relationship is witnessed by the fact that over 300 people from various volunteer and community organisations applied to take up the seven places assigned this sector on the group.

This undoubtedly meant that a number of organisations were disappointed. However, the Working Party is conducting an outreach programme, working in collaboration with other sector groups to sample the views of some local communities.

The information gathered from this programme will be used to inform the next phase and will be placed on the Ministry of Social Policy’s website in November.

The size of New Zealand's 'third sector'

Why do we need the working group to consider and recommend how the relationship can be improved?

Because if we say we believe in partnership, we must demonstrate this commitment through our actions.

It would be naive to assume this is a quick and easy solution. The community and voluntary sector is a complex and multifarious entity that requires close consultation to ensure their views are fully represented. It's sheer size is testament to the enormous amount of energy people are prepared to contribute to our society.

This is indicated by the fact that there are 22,500 incorporated societies and 9000 charitable trusts, and an estimated 50,000 – 60,000 informal community organisations.

However, increasingly the line between charity and business is blurred. Currently there are no tax incentives existing to establish philanthropic trusts, although, trusts do not pay tax as long as they come within the Charitable Trusts Act definition of charities and meet the IRD requirements for charitable status under relevant revenue statutes.

The Government has recently agreed to a tax review of charities, encompassing the definition and governance of charities for tax purposes as well as a number of specific related tax issues.

The review is in response to requests from charitable organisations and other interested parties, and provides an opportunity to consider how to better target the Government’s assistance to the charitable sector.

The review is not intended to raise additional revenue.

Consequently, if the review results in some tightening of the definition of charity for tax purposes, this will probably be offset by an increase in assistance for those organisations that continue to be considered charitable for tax purposes under the new definition.

As a first stage of the review, officials have been asked to draw up a discussion document which I am sure will be of great interest to your members.

Conclusion

In conclusion, the philanthropic movement in New Zealand has evolved from the altruistic motivations of remarkable people willing to share their time, money and vision.

The proliferation of trusts set up purely to enable organisations and individuals realise their potential is a credit to the generosity, innovation and risk taking of many New Zealanders.

The application of a little bit of faith, hope and charity can certainly go a long way, but it must also be applied with common sense, wisdom and a view to the long term benefits.

We would hope that through this review, the laudable and longstanding ideals of charitable trusts can be further strengthened for the betterment of New Zealand.

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