News & Insights

The changes proposed by Inland Revenue for donor-controlled charities mark the most significant shift in a decade for New Zealand’s philanthropic sector. JBWere has responded to all consultation items with a comprehensive submission in December 2025 that reinforces public trust without weakening charitable giving or burdening already constrained operating entities. Our key recommendations, informed by our sector insight and understanding of the for-purpose sector, are summarised below. 

• Challenge the sustainability of a 5% minimum distribution – We propose a 3.5% minimum payout rate, based on realistic investment assumptions and historic investment market behaviour. This reflects viable current practises that ensure charities can fund their missions each year without eroding their capital base and capability longer-term.

• No cap on annual donation tax credits – We advise against capping donation tax credits. Such a cap would discourage major gifts, weaken foundation balance sheets, and cut funding to frontline charities.
  

• Targeted integrity measures and make better use of existing tools – We support proportionate rules to prevent abuses without overburdening well-run organisations. That means leveraging Charities Services’ existing powers, introducing a “pay-in-money” rule, and enforcing arm’s-length standards to stop any circular transactions or self-dealing. These steps focus on the very limited bad actors and maintain confidence in the system.
  

• Sector-wide shifts require sector wide consultation: Our submission reflects a commitment to evidence-based policy, early and ongoing engagements with the wider sector, and supporting long term sector growth and sustainability.
  

• Advocate for imputation credits – Finally, even though it falls outside this consultation’s scope, we continue to push for charities to reclaim imputation credits on dividends. Allowing charities to receive these tax credits is central to thriving charities boosting their income and strengthening the sector’s long term sustainability.

JBWere’s submission aims to safeguard the integrity of New Zealand philanthropy while keeping charitable capital flowing to the causes that need it most.

This submission follows our earlier submission to IRD’s April 2025 consultation on their proposal to tax the business income of charities in Aotearoa New Zealand, Details of our earlier submission can also be found here.