Definitions for some commonly used terms.


Act means the Charities Act 2005, unless specified otherwise.


Accounts mean the record of your financial affairs, they are not necessarily audited accounts.


Accrual refers to the accrual method of accounting.


Accountability means being responsible for all aspects of your organisation. This includes financial and operational accountability, and keeping interested parties clearly informed about what your organisation does.

Annual return

The Act requires all charities registered with the Charities Services to file an annual return.

For the purposes of the Act, an annual return consists of a completed Annual Return Form and a copy of your accounts. Your accounts may be audited or unaudited.

Balance date

Balance date means the date that is set as the end of the financial year for your organisation. In your application to Charities Services, you may nominate a balance date that is convenient for your organisation. If you do not nominate a date, the Act automatically sets the balance date as 31 March.

Body corporate

Body corporate is an organisation that has legal personality (can sue and be sued) and includes a company; a society incorporated under the Incorporated Societies Act 1908; and a society or trust incorporated under the Charitable Trusts Act 1957.

Charitable purpose

Charitable purpose has a special meaning in law, as stated at section 5 of the Act. “…unless the context otherwise requires, charitable purpose includes every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community.”…[section 5(1)] Note: refer to section 5 of the Act for the full meaning of charitable purpose and effect of ancillary non-charitable purpose.

Charitable tax exemption

Charitable tax exemption is a general term referring to the exemptions from income and other taxes that some charitable organisations may qualify for. Guidance can be found on the Non-Profits(external link) section on the Inland Revenue Department (IRD) website or in the IR255 Guide(external link) – Charities and Donee organisations.

Common seal

Common seal is the way a body corporate formally signs documents. Usually the rules of the body corporate will say when and how the seal should be used.

Derived by

Derived by as in "income derived by a charity" means income received by the charity from any source, including donations, bequests, investments, or trade activities.


Donation means a gift, in contrast with a payment for goods or services.


Donee means a person or organisation receiving a donation.

Donee organisation

Donee organisation means a special type of organisation that is seen by Inland Revenue to have met certain requirements in the Income Tax Act 2004. Certain individuals and companies may receive tax benefits by making gifts of money to a donee organisation. A charity can be a donee organisation. Guidance can be found on the Non-Profits(external link) section on the Inland Revenue Department (IRD) website or in the IR255 Guide(external link) – Charities and Donee organisations.


Donor means a person or organisation that gives money, property or services to another.


Entity means an organisation that has a legal identity. In the context of the Charities Act, entity means the trustees of an unincorporated trust, an incorporated society or trust, a company, an institution or any other group of people who act together. An entity needs to have some rules that govern what it does in order to be registered.

Financial accounts

See Accounts.


Governance of an organisation refers to the way the organisation is managed and regulated, including the establishment and monitoring of its direction, and the way it complies with all legal and financial obligations.

Governing document

See Rules.


Incorporated means the result of formally making an organisation either into a company under the Companies Act 1993, an incorporated society under the Incorporated Societies Act 1908, or an incorporated society or trust under the Charitable Trusts Act 1957.  The Companies Office is the government agency responsible for administering registers of incorporated organisations.  For information about the process of incorporation, see link).


Institution means an establishment, organisation, association, or other group that has been set up for a public purpose.

Legal name

Legal name means the formal name of your organisation.


Legislation is an Act of Parliament and includes regulations authorised by that Act.


Objects are the purposes of the charity and are set out in the governing document.


Officer is defined in section 4 of the Act.  It means:

  • in relation to a trust - the trustees
  • in relation to a society or company - a member of the board or governing body of an organisation, and a person in a position to exercise significant influence over the management or administration of the organisation.

See Officer certification for more information.


Operate means work, deliver services or receive income. As in 'where does the charitable entity operate or intend to operate?'


Purposes are the objectives of an organisation, and define the scope of the organisation’s mission.


Qualifications refer to the qualifications that officers of a charitable entity must meet as set out in section 16 of the Act and any qualification requirements in the rules of the charity concerned.

See Officer certification for more information.


Rules establish an organisation, setting out its purposes and how it will be run. The rules may be a trust deed, constitution, a list of rules or other type of formal document. 


Society is a number of people who voluntarily group together for a common purpose. A society may be incorporated under the Incorporated Societies Act 1908 or Charitable Trusts Act 1957, in which case it becomes a separate 'legal' person or body (see Incorporated).


Submission refers to a letter putting forward your ideas or reasons for consideration.


Trust means an arrangement where property is held by one or more people (the trustees) at the request of another person (the settlor) for the benefit of a third party (the beneficiary), or for charitable purposes.


Trustees are the legal 'owners' of the assets of a trust who hold the assets for the benefit of another person, or group of people (the beneficiaries). Trustees must act in the best interests of the beneficiaries and are responsible for dealing with trust assets in the manner set out in the trust's constituent document (usually a trust deed).


Volunteers are people who provide their time and services to a charity free of charge.