What is it about?
Around the world, charities are regulated more and more, having to file returns (particularly financial) to government and other bodies. We know that these returns are unlikely to be checked, as regulators do not have the funds to do so. This paper examines the New Zealand charities register to see whether some registered charities could be exempted from such oversight.
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Why is it important?
From analysing the New Zealand charities register, we clustered charities according to their main revenue sources, rather than their activities. We found that 27% of registered charities do not receive significant public funds. (These were member-based, infrastructure providers and trusts/grantors.) If these groups were eliminated from regulatory requirements, the regulator would have more resources to spend on those that receive significant public funds (these are 'classic charities' and social service providers).
Perspectives
The clustering allows us to group registered charities in a logical way and to question over-regulation. For example, members and trustees are better placed to regulate member-based and trusts/grantors directly, rather than leaving it to government.
Professor Carolyn J Cordery
Victoria University of Wellington
Read the Original
This page is a summary of: Differentiated regulation: the case of charities, Accounting and Finance, April 2015, Wiley,
DOI: 10.1111/acfi.12131.
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