What Is Not For Profit?

We’ve all seen the statistics around the not for profit sector in NZ:

  • Contributions of over $8 billion towards NZ’s GDP – equating to just under 3%!
  • More than 150,000 employees
  • Over 115,000 organisations

You might have heard terms like – for purpose, non-governmental organisation, public sector, public benefit entity and more. But what is a not for profit? What legal form do these organisations take? What are their obligations and what are the advantages/disadvantages of each?

Types of not for profit organisations:

Common amongst all 4 is the existence of a purpose. Additionally, not for profits need to carry out activities in line with both their founding documents.

In addition to being a registered Charity, organisations can choose to incorporate and be either an Incorporated Society or a Charitable Trust.

The below table presents a quick snapshot of the key differences between the different types of not for profit. This may help to assist anyone deciding which legal form their future vision might take, or even whether your organisation might perhaps be best suited to a different type of not for profit.

Other useful statistics (3):
  • Culture, sport, and recreation are the largest category of non-profits, making up nearly 45% of all organisations in the sector
  • Approximately 9 in 10 charitable organisations do not employ any staff. That is, they are fully reliant on volunteers.
  • Over 150 million hours are volunteered each year – nearly 30 hours for every person in NZ!

The sector clearly contributes massively to society, filling in gaps left by business, government and more. We’re always keen to discuss what’s happening and where things are heading, so get in touch to continue the conversation!

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