Updated: 22 April 2022
Q: What is the difference between a Charitable Trust and an Incorporated Society? Which is best for me?
The differences are clearly explained on the Registrar of Incorporated Societies website and on this very helpful blog post on the DIA Charities website*. The Community Net Aotearoa website has a very helpful table “Characteristics of different organisational legal structures”
Which structure is the most suitable will naturally depend upon your group’s circumstances.
Think of an Incorporated Society as being a membership organisation like a sports club, car club etc, run by the members. A registered charity is a structured body (such as a trust) which meets the charity test (ie is charitable and qualifies for registration with Charities Services under the Charities Act 2005) and complies with the registration requirements.
The term ‘charitable’ traditionally covers four areas – that is, organisations such as trusts established for:
– advancing religion,
– advancing education
– relief of poverty and
– benefit to the welfare of the community
An incorporated society can also be a registered charity if its purposes meet the charity test; a trust need not be registered as a charity to have a legal status.
Changes to regulations around Incorporated Societies are being considered (see a separate post).
Detailed information about charitable trusts and information about Incorporated Societies are also available on the Registrar’s website and at the Charity Services website. There is also a good article in the Community Law Manual <here>
Our consultant will be pleased to discuss this with you on a no-obligation basis. <contact>
See Also:
Definition of ‘non-profit’, ‘not for profit organisation’, or ‘charity’ – what’s the difference?
Before you register as a Charity
*The blog was written before the incorporated Societies legislation was updated in 2022. 10 members are now required to register an Incorporated Society.