Latest news with #IncorporatedSocietiesAct
The Spinoff
7 days ago
- Business
- The Spinoff
Rainbow charity Outline in limbo as ‘questionable financial practices' alleged
Insolvency is flagged as a risk in an Outline annual report that suggests the possibility that 'unsupervised recklessness' – including $100,000 of undocumented credit card transactions – has led to serious financial problems. The 'dire' state of Outline's books has been laid bare ahead of its annual general meeting tonight, with its board revealing insolvency is a risk. The rainbow mental health organisation's annual report, released to Outline members ahead of tonight's AGM, paints a picture of 'questionable financial practices' and 'limited transparency', with an IRD debt repayment plan not adhered to, a yet-to-be-completed financial audit finding undocumented transactions, including 'un-provenanced credit card transactions worth circa $100,000', and auditors questioning 'the volume and usage of international travel expenditures'. Outline provides phone and online support services for rainbow communities across Aotearoa, as well as in-person support groups in Auckland. A widely respected charitable organisation, according to its annual report it has conducted more than 3,000 online chats and phone calls in the latest financial year, as well as providing 'everything from emotional support to letters of advocacy, food parcels, and clothing' to trans clients in a time of heightened transphobia. While an increase in staff numbers and a reduction in funding opportunities put pressure on cash flow at the organisation, 'a lack of controls and policy' is a recurring theme in the report. The charity ended the 2024/25 financial year with a $186,000 deficit, after income of just over $589,000, and 'no significant financial reserves'. The 2025/26 draft budget forecasts a $129,000 loss, 'with our current cash reserves due to be depleted in September 2025'. As of Tuesday this week, Outline was 'unable to secure assurance from an auditor that we have sufficient reserves and income to be a going concern in 2025', according to the report. This means 'we are at risk of trading while insolvent, which places us in breach of the Charities Act and the Incorporated Societies Act. If we do not balance our budget through a combination of additional income and reduced expenditure, we will be operating illegally.' 'The picture narrated above and illustrated by the attached profit and loss and draft budget is dire,' concludes the financial report section of the annual report. 'It has been caused by unsupervised recklessness. Damage limitation was made difficult by the inexperience of the board and by a lack of timely decisions but was improved following the chief executive's decision to resign,' it continues. Emmaline Pickering-Martin stood down as CEO of Outline in May 2025, after 16 months in the role. On December 6, 2024, Outline had announced it was at risk of closing permanently and launched a fundraising campaign to help it stay afloat. 'The government's attacks on Rainbow communities are hitting hard, and Outline is no exception,' said an Outline post on social media. 'Our funding is drying up while the need for our services grows every day.' In a LinkedIn post on December 12, Pickering-Martin wrote that she was 'beyond disgusted and angry and hugely hurt' by a response from Te Whatu Ora/Health NZ, on behalf of mental health minister Matt Doocey, declining the organisation's plea for more financial support. Several months later, Pickering-Martin posted about requests for funding being turned down by non-government organisations: 'After having hui after hui to get us to tailor our application to explain how dire our situation is … and still … GOOD LUCK AFTER 50 YEARS ENJOY CLOSING THE DOORS… That's essentially what every single email says. Sorry we can't help you Brown Org. Sorry we can't help you Brown CEO but if you were just like the old CEO Claire (read: young pākehā who was kind and quiet and did exactly what we said the way we said it) if you were just like her … we'd be more likely to fund you. At this point EVERY SINGLE DECLINE FEELS PERSONAL,' she wrote. In a separate post announcing her resignation in May 2025, Pickering-Martin said she had encountered 'Pākehā censorship', despite 'having the best board members and bosses anyone could ever ask for'. In the annual report, board co-chair Shane Kelly said while the public donation campaign 'provided valuable short-term support, it was initiated without full board oversight and exposed gaps in internal coordination'. This became an ongoing problem, with the six-member board experiencing 'sustained challenges in maintaining oversight and internal communications', wrote Kelly, whose co-chair Grace Abott left the board in February 2025. 'Operating at reduced capacity and with limited up-to-date information, we were not always able to meet our governance expectations as required. Delays and limited transparency in financial reporting and coordination made it harder to respond in an effective and timely manner.' Outline began the financial year with nine staff and now has five, as well as a network of more than 60 volunteers who operate its phone and chat lines. Its wage bill for the 2024/25 year was $505,000, peaking at nearly $12,000 per week in December 2024 and reducing to $4,500 by June 2025. 'Our financial position is such that further staff reductions are pivotal for financial survival,' said the annual report. After the wage bill, the next biggest chunk of the organisation's $777,000 outgoings were koha at $57,000 and general expenses at $27,000, with $24,000 spent on national travel, $17,000 on hauora (health), $17,000 on rent, $16,500 on professional development and $15,500 on international travel, according to the annual report. 'The discretionary nature of most of the largest categories of spend in the financial year signals a lack of controls and policy in the organisation,' it said. Other concerns raised in the report included an outstanding debt to Inland Revenue of more than $65,000 and a repayment plan that was agreed but 'not maintained'. Separately, a third party had contracted the organisation to provide services and had begun making payments to Outline in the 2024/25 financial year. The money was spent before the work commenced, according to the report. The largest portion of Outline's $589,000 income was donations totalling just over $200,000, with non-government grants contributing over $176,000 and government grants over $77,000. Its annual report thanks 16 major funders, including The Tindall Foundation, Rātā Foundation, Le Va, Sweat with Pride and the One Percent Collective, as well as Te Whatu Ora, Hāpai Te Hauora and the Lottery Grants Board. After Pickering-Martin's departure, the board sought legal advice 'to clarify its responsibilities and ensure appropriate next steps', Kelly said in the report. The board then assumed interim leadership and established weekly board meetings, and 'worked with staff to start to reduce expenditure [and] develop new revenue pathways'. First quarter costs have reduced by 87%, 'due largely to the commitment and effort of our remaining staff', who are 'showing grace and patience as the board has struggled to retain control over costs'. It added: 'Staff have made significant sacrifices during the last financial year, while also being unwillingly exposed to questionable practices that require investigation to ensure we maintain regulatory credibility as an organisation.'
Scoop
14-05-2025
- Business
- Scoop
Sound The Sirens: Are Voluntary Associations Under Attack?
Press Release – LEAD LEAD co-director, Garth Nowland-Foreman, asked today, What has this government got against community groups and member associations? And where is the Minister for Community & Voluntary Sector, when a regulatory barrage is being unleashed on the … A social enterprise that supports thousands of non-profits across the country, LEAD Centre for Not for Profit Governance and Leadership, is sounding the alarm on an unprecedented tax and fee grab from the country's voluntary and community organisations. LEAD co-director, Garth Nowland-Foreman, asked today, 'What has this government got against community groups and member associations? And where is the Minister for Community & Voluntary Sector, when a regulatory barrage is being unleashed on the sector?' 'At a time when social cohesion in this country has dropped below that of our Australian neighbours, membership associations are one of the most important vehicles in helping to build stronger communities, practice democracy, and support social cohesion.' Tax on Charities' earned income First, the government tried to tax charities, and while now been put on hold for this Budget (because it would be excessively complicated, add compliance costs, and still not raise any significant revenue), the threat still hangs over the heads of thousands of charities. And Charity Services is requiring charities to separately list so-called 'commercial' income in this year's annual returns. Tax on Associations' membership fees Inland Revenue now proposes to impose income tax for the first time on subscriptions and other transactions among members of community associations (ED0265). This will overturn a 70-year-old tax understanding of the 'principle of mutuality', with tax specialists warning it could threaten the existence of some small clubs and societies. Fees hike for Incorporated Societies At the same time the Companies Office is ignoring the public-good contribution of these same non-profit associations, with a major hike in one fee, and the introduction of three new fees for incorporated societies, including one that for the first time will need to be paid every year in perpetuity (Review of Companies Office Fees and Levies, 2025). Following funding cuts and increased compliance LEAD co-director, Sandy Thompson, said: 'This follows cutbacks in funding for many non-profits doing important work in the community. Many are still grappling with a new Incorporated Societies Act, which itself imposes increased compliance costs, and is demanding thousands of incorporated societies across the country re-register with new constitutions by April next year or risk loosing any legal protection. 'While individually, each of these threats may not appear monumental, taken together it's hard for community groups not to feel under attack, just at a time we should be supporting them even more.' Background information: Tax on membership fees: Increased fees for Incorporated societies: Complying with new Incorporated Societies Act: Cuts to Charities' funding: Who is LEAD? LEAD Centre for Not for Profit Governance & Leadership was established ten years ago to provide evidence-based training, coaching and other support to not-for-profit organisations and their leaders across Aotearoa New Zealand and the Pacific. In that time thousands of leaders and their organisations have been assisted by its consortium of highly expert and experienced not-for-profit consultants and facilitators.
Scoop
14-05-2025
- Business
- Scoop
Sound The Sirens: Are Voluntary Associations Under Attack?
A social enterprise that supports thousands of non-profits across the country, LEAD Centre for Not for Profit Governance and Leadership, is sounding the alarm on an unprecedented tax and fee grab from the country's voluntary and community organisations. LEAD co-director, Garth Nowland-Foreman, asked today, 'What has this government got against community groups and member associations? And where is the Minister for Community & Voluntary Sector, when a regulatory barrage is being unleashed on the sector?' 'At a time when social cohesion in this country has dropped below that of our Australian neighbours, membership associations are one of the most important vehicles in helping to build stronger communities, practice democracy, and support social cohesion.' Tax on Charities' earned income First, the government tried to tax charities, and while now been put on hold for this Budget (because it would be excessively complicated, add compliance costs, and still not raise any significant revenue), the threat still hangs over the heads of thousands of charities. And Charity Services is requiring charities to separately list so-called 'commercial' income in this year's annual returns. Tax on Associations' membership fees Inland Revenue now proposes to impose income tax for the first time on subscriptions and other transactions among members of community associations (ED0265). This will overturn a 70-year-old tax understanding of the 'principle of mutuality', with tax specialists warning it could threaten the existence of some small clubs and societies. Fees hike for Incorporated Societies At the same time the Companies Office is ignoring the public-good contribution of these same non-profit associations, with a major hike in one fee, and the introduction of three new fees for incorporated societies, including one that for the first time will need to be paid every year in perpetuity (Review of Companies Office Fees and Levies, 2025). Following funding cuts and increased compliance LEAD co-director, Sandy Thompson, said: 'This follows cutbacks in funding for many non-profits doing important work in the community. Many are still grappling with a new Incorporated Societies Act, which itself imposes increased compliance costs, and is demanding thousands of incorporated societies across the country re-register with new constitutions by April next year or risk loosing any legal protection. 'While individually, each of these threats may not appear monumental, taken together it's hard for community groups not to feel under attack, just at a time we should be supporting them even more.' Background information: Shamubeel Eaqub & Rosie Collins, Social Cohesion in New Zealand (April 2025) Tax on Charities: Tax on membership fees: Increased fees for Incorporated societies: Complying with new Incorporated Societies Act: Cuts to Charities' funding: Who is LEAD? LEAD Centre for Not for Profit Governance & Leadership was established ten years ago to provide evidence-based training, coaching and other support to not-for-profit organisations and their leaders across Aotearoa New Zealand and the Pacific. In that time thousands of leaders and their organisations have been assisted by its consortium of highly expert and experienced not-for-profit consultants and facilitators.
