The International Journal
of Not-for-Profit Law

Identifying Non-Profit Institutions in New Zealand

By Statistics New Zealand, in consultation with The Committee for the Study of the New Zealand Non-Profit Sector

Abbreviations

ACC	Accident Compensation Corporation
CCO	Council-Controlled Organisation
ICNPO	International Classification of Non-Profit Organisations
ITO	Industry Training Organisation
LGNZ	Local Government New Zealand
NPI	Non-Profit Institution
NPIsH	Non-Profit Institution serving Households
NZSNA	New Zealand System of National Accounts
PHO	Primary Health Organisation
PSIS	Public Service Investment Society
TAB	Totalisator Agency Board
UN	United Nations

Executive Summary

Satellite accounts are recognised internationally as a way of presenting information in particular areas of interest not covered by conventional economic accounts. By extending the central national accounting framework they enable additional information, both financial and non-financial, to be presented alongside standard economic measures such as Gross Domestic Product and household spending.

This paper sets out to address the following questions:

• What is the broad scope of non-profit institutions?
• What are the units of interest we want to group and measure?
• What are the characteristics that distinguish them, allowing us to formulate decision criteria for their inclusion?

In answering these questions, the paper applies the United Nations structural-operational definition, comprising five criteria:

• Organisation
• Not-for-profit
• Institutionally separate from government (that is, private)
• Self-governing
• Non-compulsory.

For each criterion a decision tree has been developed that allows us to test if entities meet that criterion. Where an organisation meets all five criteria then it is in-scope for the NPI satellite account. The outcome, in terms of the economic sectors of the New Zealand System of National Accounts (NZSNA), is that the broad scope of the Non-Profit Institution (NPI) sector for the satellite account embraces all of the NZSNA sector for Non-Profit Institutions serving Households (NPIsH) sector, those organisations in the corporations sector established by businesses to serve their interests and some NPIs in the government sector.

As shown in Table 1, with regard to broad categories of organisations examined in the paper, the outcomes are:

Table 1

Example	Organi- sation	Not-for- profit	Private	Self-governing	Non-com- pulsory	In
Education / research providers
Universities	√	√	X	√	√	No
School boards of trustees	√	√	X	√	√	No
Parent teacher associations	√	√	√	√	√	√
Private schools	√	√	√	√	√	√
Kindergartens	√	√	√	√	√	√
Playcentres	√	√	√	√	√	√
Kohanga reo	√	√	√	√	√	√
Industry training organisations	√	√	√	√	√	√
Health providers
District health boards	√	√	X	√	√	No
Primary health organisations	√	√	√	√	√	√
Private hospitals	√	√	√	√	√	√
Child health organisations	√	√	√	√	√	√
Social service / emergency providers
Welfare organisations	√	√	√	√	√	√
Child support organisations	√	√	√	√	√	√
Women’s refuges	√	√	√	√	√	√
Table 1
Volunteer fire brigades	√	√	√	√	√	√
International aid organisations
International aid organisations	√	√	√	√	√	√
Art and culture organisations
Repertory theatres	√	√	√	√	√	√
Brass bands	√	√	√	√	√	√
Literary societies	√	√	√	√	√	√
Sports organisations
SPARC	√	√	X	√	√	No
Regional sports trusts	√	√	√	√	√	√
Cricket clubs	√	√	√	√	√	√
Racing clubs	√	√	√	√	√	√
Advocacy organisations
Residents’ associations	√	√	√	√	√	√
Community law offices	√	√	√	√	√	√
Philanthropic trusts
Community trusts	√	√	√	√	√	√
Gaming trusts	√	√	√	√	√	√
Charitable trusts	√	√	√	√	√	√
Community-based organisations
Credit unions	√	X	√	√	√	No
Veterinary clubs	√	√	√	√	√	√
A & P societies	√	√	√	√	√	√
Licensing trusts	√	√	X	√	√	No
Tangata whenua-based organisations
Runanga iwi	√	√	√	√	√	√
Marae committees	√	√	√	√	√	√
Political parties
Political parties	√	√	√	√	√	√
Social clubs
Rotary clubs	√	√	√	√	√	√
Workingmen’s clubs	√	√	√	√	√	√
Unions, business and professional organisations
Trade unions	√	√	√	√	√	√
Business associations	√	√	√	√	√	√
Chambers of commerce	√	√	√	√	√	√
Religious congregations
Church parishes	√	√	√	√	√	√

Chapter 1: The Satellite Account and the Units of Interest

This chapter briefly describes the aims of the NPI satellite account, discusses what organisations in the economy represent the units of interest for such an account and how they might be defined.

In New Zealand, the majority of goods and services are produced by private enterprises that operate in the market to make a profit and distribute it to their owners. Government also provides goods and services, usually to the community at large and funded by taxation, often because of market dysfunction but also as it fulfils its political, regulatory and service delivery roles (such as defence, law and order, and the provision of health and education services).

Outside these market producers and government yet more goods and services are produced, principally by way of households combining together in clubs, societies and the like. These organisations, while they may make profits, do not have profit-making as a goal, do not distribute any profits to their members and are often reliant on the voluntary provision of free labour and resources to operate successfully. As such, they have been broadly described as non-profit institutions (NPIs).

The New Zealand System of National Accounts (NZSNA), in line with international standards, covers all of the formal activities in the economy, whether undertaken by business, government, non-profit organisations or households. However, the standard measurement conventions result in a considerable amount of informal economic activity being omitted from the accounts and hence from key measures such as GDP.

In particular, the value of free time and resources are omitted, so the contribution to the economy of non-profit organisations employing volunteers tends to be undervalued. Furthermore the classifications adopted in the national accounts do not result in the publication of comprehensive separate measures for all non-profit institutions.

The NPI satellite account aims to provide this missing information. It supplements the existing NZSNA; analysing the contribution non-profit institutions make to the economy, as well as measuring the value of volunteer work.

It is important to note that the NPI satellite account is not intended to measure the full range of goods and services that are produced in what might be more broadly referred to as the ‘non-profit sector’, ‘voluntary sector’ or ‘civil society’. The satellite account is confined to institutions found within this sector. Individuals, households or groups of persons coming together informally to mutually provide services to either themselves or third parties are not included in this account.

In similar vein, and as a consequence of the above, the NPI satellite account will not measure the full range of ‘voluntary’ activity occurring in society: it will only include those voluntary activities that take place within the non-profit institutional boundary. To capture this wider range of voluntary activity requires the development of household ‘satellite accounts’ that would measure all voluntary work, regardless of the particular institutional setting it occurred in. (This is discussed further, below, with reference to Table 3.)

In analysing non-profit institutions we are interested in units that provide goods and services or transfers to households and the community, that are not profit-oriented, and are operating both voluntarily and independently of government. This is a fairly loose definition and in this paper we aim to make it more specific. To do this it helps if we look at how we conventionally – through the NZSNA – view the units that make up the economy and how we group them for analytical purposes.

The Institutional Framework in the National Accounts

In the national accounts we recognise the following institutional units:

• Corporations (including quasi-corporations, companies etc) usually set up to make a profit or operate in the market
• Government units
• Households, as producers and consumers
• NPIs, both formal and informal.

If we look at how we group them into broad sectors on the basis of the roles they play in the economy we get the matrix as shown in Table 2.

Table 2: NZSNA Institutional Framework

	Institutional units
Institutional sector*	Corporations	Government units	Households	NPIs
Non-financial corporations	Non-financial corporations			1. Non-financial market NPIs 2. NPIs serving business
Financial corporations	Financial corporations			1. Financial market NPIs 2. NPIs serving business
General government		Government units		NPIs controlled by government units
NPIsH				NPIsH
Households			1. Households 2. Extended households (eg whanau) 3. Informal groups

* Institutional sectors are broad economic groupings which bring together units that play similar roles in the economy and react similarly to various market prices and/or economic policies.

Table 2 recognises several types of NPIs, namely:

• Market NPIs
  Although being institutionally non-profit in form, some NPIs operate predominantly in the market to the extent that their income is mainly derived from goods and services they provide at market (competitive) rate and these prices are sufficient to determine supply/demand of their output. Racing clubs and some private schools and hospitals have the potential to be so classified.
• NPIs serving business
  Organisations such as trade associations, industry training organisations and research and quality testing organisations whose essential role is to provide services on a non-profit basis, but often on a cost-recovery basis, to member companies.
• NPIs serving government
  Traditionally, governments have operated and funded a wide range of institutions such as schools, hospitals and research organisations operating on a non-profit basis.
• NPIs serving households
  • Participative collective associations providing individuals with the opportunity to engage in one or other form of collective activity, such as trade unions, professional societies, consumers' associations, political parties, churches or religious societies, and social, cultural, recreational and sports clubs
  • Associations where individuals come together to provide social services including charities, relief and aid organisations. They are usually financed by voluntary transfers in cash or in kind from other institutional unit. The services may be available only to members of the group or distributed charitably to persons beyond the group.

Table 2 also shows that NPIs can fall across four of the sectors found in the national accounts. However, we are not interested in all of them. If we come back to our original definition then we want to eliminate those that (although they appear to be NPIs) may in fact be largely operating to make a profit and, similarly, eliminate those operating as an arm of government.

Identifying the NPIs to be included in the satellite account

In order to define the scope of the account we need to firm up our definition of the area of interest. The UN Handbook1 proposes a definition that brings together those entities that meet all five criteria. Accordingly for the satellite account, the non-profit sector consists of entities that:

• are organised to the extent that they can be separately identified
• are not-for-profit and do not distribute any surplus they may generate to those who own or control them
• are institutionally separate from government
• are in control of their own destiny, and
• are non-compulsory, in both terms of membership and members’ input.

This definition is described as the ‘structural-operational’ definition.

Working with this definition, we see that our centre of interest can potentially cut across the established sectors, as indicated by the yellow cells in Table 3. How much the scope of the satellite account embraces the various groups of NPIs indicated depends on the extent to which the structural-operational definition differs from the sector definitions, for example, the notion of government control.

With regard to cell (a) in table 3 below, if we include in the NPIsH sector those NPIs that have some form of ongoing existence and are separate from households, then where do we include temporary and informal groups such as family/clan gatherings or child minding groups? In the NZSNA we would not recognise these as separate entities in the first place, that is they are not even identified as NPIs, hence cell (a) has zero entries. However, they do exist, and they would be viewed as types of (extended) households undertaking production or consumption activities within the household sector. These units – to the extent that they can be identified – may well be a source of great interest, especially as they report collective activities of individuals that could be important for some forms of welfare. However, they are not the subject of the NPI satellite account. Instead, they are better identified and analysed as part of a household satellite account.

This does not mean that the NPI satellite account only includes unincorporated entities when formally organised. The organisational criterion from the structural-operational definition imposes neither type of organisation nor size. However, the organisations must have some observable existence separate from their members, permanence (and, in practice, significance), and the ability to compile accounts, to be identified. The application of the structural-operational definition is discussed in Chapter 2.

Table 3: Identifying NPIs to be included in the satellite account

	Institutional Units
Institutional Sectors	Corporations	Government units	Households	NPIs
Non-financial corporations				1. Non-financial market NPIs
				2. NPIs serving business
Financial corporations				1. Financial market NPIs
				2. NPIs serving business
General government				Government NPIs: 1. controlled by government units
				2. independent of government units
NPIsH				NPIsH
Households			(a)

Chapter 2: Structural-Operational Definition of the Sector

Having discussed the broad scope of the NPI sector and the units of interest within it, this part of the paper examines the characteristics that distinguish NPIs in terms of the structural-operational definition.2 Decision rules are then formulated for each of the five criteria within the structural-operational definition to determine whether specific NPIs should be included.

To be in-scope for the satellite account an organisation must meet all five criteria. Most organisations, NPIs or otherwise, meet some of the criteria. Therefore, if any one criterion is looked at in isolation, an organisation may appear to be in-scope. For example, public companies meet four of the criteria, only failing on the not-for-profit one. Statistics New Zealand, on the other hand, meets the not-for-profit criterion but is not institutionally separate from government. A neighbourhood watch group is both not-for-profit and independent of government but is unlikely to have the structure to meet the organisation criterion.

Criterion 1: Organisation

Organisation means that the entity has “some degree of internal organisational structure; persistence of goals, structure and activities; meaningful organisational boundaries; or a legal charter of incorporation”.3 So, an NPI must be either created by process of law, such that its existence is recognised independently of the persons, corporations or government units that establish, finance or control it, or, if it does not have any legal status, then its separate existence must be recognised by the society in some formal way. Excluded are purely ad hoc and temporary gatherings of people with no real structure or organised separate identity.

In the decision tree below (Figure 1), various tests are applied to informal entities (including unincorporated associations). The final test in all cases is whether the entity has the capacity to produce a complete set of accounts. In practice, this requirement means that, if necessary, the entity has sufficient financial data available such that statements of financial position and performance can be produced for the entity.

Associations of people that are too informal to be classified as in-scope organisations include extended families such as whanau, neighbourhood watch, child minding groups and car pools. Informal groups that are out-of-scope would be included in a household satellite account.

Figure 1

Criterion 2: Not for profit

Not-for-profit means that organisations do not exist primarily to generate profits, either directly or indirectly, and are not primarily guided by commercial goals and considerations.4 Under this criterion, members are not permitted to gain financially from the organisation’s operations and cannot appropriate any surplus which it may make. It does not imply that an NPI cannot make an operating surplus on its production, but any surplus must be ploughed back into the basic mission of the organisation and not distributed to the owners, members, founders or governing board. In this sense, “NPIs may be profit-making but they are non-profit distributing, which differentiates NPIs from for-profit businesses”.5 If the surplus is distributed to another NPI, the first is still an NPI under the not-for-profit criterion because the surplus remains within the NPI sector to be used for charitable and other not-for-profit purposes. As a point of clarification, this does not mean that a profit-oriented company owned by an NPI is in-scope, as the former is not itself an NPI. Therefore, while the Seventh Day Adventist church, the Automobile Association and the NZ Rugby Union are all in-scope for the NPI satellite account, limited liability subsidiary companies owned by each are not.

In New Zealand, organisations that seemingly meet the test, automatically, include incorporated societies and charitable trusts. Both types of organisation are non-profit in character. The Incorporated Societies Act 1908 allows for the registration of associations formed for a lawful purpose but without pecuniary gain for the individual members. Alternatively, where the lawful purpose is deemed to be charitable, societies may choose to register under the Charitable Trusts Act 1957.

Some non-profit organisations can be regarded as more akin to profit-oriented corporations and although membership comprises individual householders they are not classified in the NZSNA as NPIs serving households. Such examples are racing and trotting clubs. Nevertheless, with the clubs being incorporated societies, the members are not able to gain financially and therefore under the not-for-profit criterion, the clubs are in-scope NPIs.

Organisations such as the PSIS, mutual insurance companies, trustee companies, United Friendly Society dispensaries and credit unions, where members pool resources for a co-operative purpose also exist. However, the members’ relationship with the organisation is commercial, since the ultimate goal is for each member to gain personally from the operation of the organisation. Therefore these organisations are out-of-scope. One of these examples – credit unions – is looked at in more detail in chapter 4 of this paper.

In the decision tree below (Figure 2), members etc, are permitted to gain financially where the NPI is paying them for services rendered, including contractual labour services such as wage employment or board member honorariums. Such contractual outlays are not viewed as profit distribution.

Figure 2

Criterion 3: Institutionally separate from government

This criterion means that an organisation “is not part of the apparatus of government and does not exercise governmental authority in its own right”.6 Therefore it has an institutional identity which is not an instrument of any unit of government, central or local.

In assessing whether an NPI is an instrument of government, the UN Handbook distinguishes between organisations that are given authority by enactment and those that receive it by delegation. In the latter case, the organisation has no sovereign authority on its own and can be regarded as independent. For example, a trade association might be given authority to set and even enforce industry standards, but that authority could be withdrawn if misused or no longer necessary.

An example of sovereign authority is the Maritime Safety Authority which under the Maritime Safety Act 2004 is the designated authority responsible for implementing and administering the Act. (The Authority is also a crown entity in terms of the Crown Entities Act 2004, see below.) An example of delegated authority is the Retail Industry Training Organisation, an incorporated society which has responsibility for setting standards for the retail trade industry. (For further discussion on industry training organisations, see chapter 4.)

The UN Handbook also regards NPIs empowered to distribute government subsidies, grants or contracts to individuals or other organisations, within a given set of regulations determined by government, as independent of government. An example is the Te Kohanga Reo National Trust which receives a government grant from the Ministry of Education and in turn funds and controls kohanga reo.

Both central and local government in certain circumstances can choose to establish NPIs as a device to enable an organisation to operate with a degree of independence. The question is then whether the organisation is still an instrument of central or local government or independent enough to be regarded as in-scope for the satellite account.

In other situations, NPIs established privately can come into the ambit of government by first becoming reliant on government funding and then as a consequence becoming instruments of government policy. The Winston Churchill Memorial Trust is such an example. Although only partially funded by government, its board and chairman are appointed by the Crown and it is required to report to Parliament. In contrast, however, the Royal NZ Plunket Society remains independent. Although, for the year to June 2002, the Society received 80 percent of its total income from government grants, these were contracts with the Health Funding Authority and Early Childhood Development. While the Society had to be accountable for the funding, it was neither under direction from the Crown nor required to report to it as an agent.

Crown reporting entities (ruled as out-of-scope, as agents of sovereign authority) include the following: government departments, state-owned enterprises, the Government Superannuation Fund, the Reserve Bank and crown entities. Other categories of entities, in their own right, are crown companies, crown subsidiaries, school boards of trustees and tertiary education institutions (universities, colleges of education, polytechnics, specialist colleges or wananga).

Many crown entities are in effect NPIs established by the government. Under s107 of the Crown Entities Act, the Ministers of State Services and Finance can jointly direct crown entities (as a group) to comply with specified requirements for the purpose of either supporting government policy or improving public services.

The principal form of crown entities (in terms of the number of entities) is statutory entities, being bodies corporate set up by or under statute. Within this type, the Crown Entities Act recognises crown agents, autonomous crown entities and independent crown entities:

• Crown agents, since they must give effect to government policy when directed by the Minister responsible, are not institutionally separate from the government. Examples include: Accident Compensation Corporation, district health boards, NZ Fire Service, NZ Qualifications Authority and the Maritime Safety Authority.
• Autonomous crown entities must have regard to government policy when directed by the Minister responsible. They are also dependent on government funding. The New Zealand Symphony Orchestra, for example, derives income primarily through the provision of outputs to the Crown for services to third parties and, for 2005, this was budgeted at 84 percent of its total income. Other examples include: Broadcasting Commission, Te Papa, Film Commission, Lotteries Commission and Public Trust.
• Independent crown entities are described as generally independent of government policy. Nevertheless these organisations not only undertake regulatory functions but are required to report to the Crown. Examples include: NZ Sports Drug Agency, Commerce Commission, Electoral Commission and the Office of Film and Literature Classification.

Local authorities include regional, city and district councils as well as organisations owned and/or controlled by these councils. The Local Government Act 2002 allows for what are called council-controlled organisations, where local authorities can establish entities which they control both financially and operationally (through board appointments). Council-controlled organisations include subsidiary limited liability companies and charitable trusts, established by local authorities (for example the Wellington Zoo Trust). See also chapter 4.

Also part of the local government sector are:

• special purpose authorities, not included in crown entities, established under specific legislation (see also chapter 4)
• local governance entities, not included in crown entities, such as licensing trusts (see also chapter 4).

The UN Handbook, with regard to government appointees on boards of governance, also makes the distinction between those appointed with the power to exercise government authority and those appointed in their capacity as private citizens. Community trusts would appear to be an example here. Although appointments are made by the Minister of Internal Affairs, on recommendation, they do not carry with them instructions by the Minister or the Department; appointments are as private citizens. (See also chapter 4.)

The decision tree below (Figure 3) also acknowledges organisations set up by the Crown under public statute. Many of these are out-of-scope under the self-governing criterion (see below) but some are also ruled out-of-scope under the separate-from-government criterion. This occurs where the organisation is answerable to the Crown or a local authority, such that it is required to report to a Minister or Council, with its report to be either formally tabled in Parliament or at a Council meeting, as the case may be.

What is at issue here is the definition of ‘government’. Government units are legal entities established by political processes which have legislative, judicial or executive authority over other institutional units in an area. In the case of crown entities, it is argued that sovereign authority has been delegated, and similarly with regional and territorial local authorities where sovereign authority is delegated by way of the Local Government Act 2002. Beyond these delegations, the authority weakens, as in the case of local governance entities such as licensing trusts. In Figure 3 below they are ruled out-of-scope by the question, “Is the organisation a local authority, council controlled organisation or local governance entity?” Licensing trusts are further elaborated on in Chapter 4.

Finally, in relation to government, there are organisations that sit between the Crown and Māori and have a tribal governance mandate. Traditionally such organisations have been Māori trust boards established under the Māori Trust Boards Act 1955. The boards are also recognised as ‘public entities’ under the Public Audit Act 2001. However, following recent cases of settlement between the Crown and certain iwi regarding claims made under the Treaty of Waitangi, the Crown has preferred to reconstitute Boards, or their subsequent runanga.

The Runanga o Ngai Tahu Act 1996 recognises the te runanga “as the representative of Ngai Tahu Whanui” such that, “Where any enactment requires consultation with any iwi or with any iwi authority, that consultation shall, with respect to matters affecting Ngai Tahu Whanui, be held with Te Runanga o Ngai Tahu”. In the case of the Runanga o Ngati Awa Act 2005, the preamble describes the restructured runanga as a “governance entity”, its purpose being “to receive and administer the settlement redress for and on behalf of Ngati Awa and generally represent Ngati Awa’s interests in the future”.

Te Runanga o Ngai Tahu and Te Runanga o Ngati Awa, along with 52 other organisations, are also “recognised iwi organisations” under the Māori Fisheries Act 2004. As such they are recognised as iwi governance entities and, for the purposes of the Act, upon application become “mandated iwi organisations” required to act for the benefit of all members of the iwi. (See also chapter 4.)

Again we are faced with the definition of government. Do iwi authorities such as Runanga, have authority, sovereign enough, for the organisations to be government units, in the broadest sense? Relevant to any answer to this question is that, as has been noted by the Community and Voluntary Sector Working Party, many tangata whenua organisations are not just community groups but are partners with the Crown under the Treaty of Waitangi.7

In conclusion, the view has been taken that mandated iwi organisations, while they have a recognised relationship with the Crown, also exist as organisations in their own right, serving their people. As such they are classified as NPIs in-scope for the satellite account. This is further elaborated in Chapter 4.

Figure 3

Criterion 4: Self-governing

This criterion means that “the organisation is able to control its own activities and is not under the effective control of any other entity”.8 Therefore the organisation has to be independent not only of government but of other entities as well.

The UN Handbook adds that, “The emphasis here is not on the origins of the organisation, that is what organisation created it, or on the degree of government regulation of its activities or the dominant source of its income. The emphasis is instead placed on the organisation’s governance capacity and structure”.

A question, however, arises when considering whether the Crown can wind up an organisation. Since the Crown has extensive powers in this regard, as the ultimate authority in a society’s affairs, this aspect of the criterion needs to be tempered, such that it reduces to whether organisations “have their own mechanisms for internal governance, are able to cease operations on their own authority, and are fundamentally in control of their own affairs”. In principle all crown reporting entities, for example, lack the fundamentals of self-governance in that they can neither change their purpose nor dissolve themselves.

Beyond crown reporting entities, there are organisations set up by public statute, which, while operationally independent of government, are not fully in control of their ‘destiny’ to the extent that the UN structural-operational definition requires. For although these statutory organisations manage their day-to-day affairs and operations, they can neither dissolve themselves nor change their purpose of existence. Furthermore, the statute by which an organisation is set up may also require the organisation to formally report to Parliament and/or give a Minister of the Crown the power to direct it in certain matters. Accordingly, if not ruled out-of-scope through not being institutionally separate from government, these organisations are ruled out-of-scope under the self-governing criterion. An indicative, but far from exhaustive, list of such statutory bodies includes:

• New Zealand Kiwifruit Board
• New Zealand Pork Industry Board (see also Chapter 4)
• New Zealand Conservation Authority
• New Zealand Parole Board
• Nursing Council of New Zealand
• Gambling Commission
• District Legal Services Committees
• New Zealand Geographic Board
• Māori Television Service
• Waitangi Tribunal
• New Zealand Racing Board (incorporating the TAB).

As a result, the decision tree (Figure 4) assessing self-government begins by dealing with statutory bodies. If the organisation is set up by public statute (as opposed to the organisation freely registering under a statute such as the Incorporated Societies Act or the Charitable Trusts Act), then the question is asked as to whether the statute prescribes the purpose, functions and board structure. If it does, then the organisation is out-of-scope. Conservation boards, set up by the Conservation Act, come into this category.

However, if the statute merely gives general recognition to the organisation and its purpose, then the organisation stays in-scope to be further assessed on its day-to-day management, etc. Community trusts (that arose out of the dissolution of the former Trustee Banks) are considered to be an example of the latter case. Although they are recognised by their own statute (the Community Trusts Act), each has their own trust deed setting out their specific purpose, functions and structure. Changes to powers, functions and structure can be made by changing the trust deed. (See also chapter 4.)

In the decision tree (Figure 4), the ability of an organisation to change its rules/mission is subsumed in the question: Can the organisation dissolve itself?

Figure 4

Criterion 5: Non-compulsory

“Non-compulsory means that membership and contributions of time and money are not enforced by law or otherwise made a condition of citizenship”.9 Thus this criterion emphasises the voluntary nature of NPIs with regard to both membership and contribution.

As far as is known, there are no private NPIs in New Zealand where citizenship is a condition of membership. However there are some circumstances where, if a person wishes to practice a trade or profession or course of study, the compulsory membership of an NPI is required. For example, at most of New Zealand’s universities it is compulsory for students to belong to their local student association. Furthermore, law prescribes that practising lawyers be members of the New Zealand Law Society. The UN definition permits these organisations to be in-scope on the basis that the situation where people find themselves compelled to join is freely chosen. This exemption is accordingly built into the decision tree (Figure 5).

Also under this criterion, groups that are extended families are ruled out-of-scope, resulting in them being more correctly included in a household satellite account. In the case, however, of clan societies and the like (eg Clan MacLeod Society of Canterbury, see Chapter 4), although membership derives from common ancestry, it is freely chosen and its relationship to the society is removed enough for the society to function no differently from other in-scope NPIs.

In the case of NPIs established by and for Māori, while again membership of the various organisations derives from birthright, this fact doesn’t appear to be a reason to exclude them. The situation parallels that described above regarding membership of professional organisations or student unions, in that those with birthright choose to be members of the organisation concerned.

Figure 5

Beyond the issue of whether a Māori institution is in-scope, as in Figure 5 above, there is also a question as to whether members contribute voluntarily. To what extent are contributions made under some degree of cultural obligation to be included? In many Māori institutions such as marae-based organisations, contributions are not considered voluntary in the sense of being ‘self chosen’ or serving ‘others’. It is done through a sense of duty, the moral obligation of being Māori.

“In Māori society, volunteerism is not a commonly used term. You know your place and you contribute accordingly. If your whakapapa shows you are a noble then you behave like a noble and your place is there for you to take. If your whakapapa reveals you are a worker then you take your place there as a worker, irrespective of anything else.”10

However, with the urbanisation of Māori and with the members of whanau moving to live in other parts of New Zealand, fewer people are being brought up around marae. Accordingly, a diminution of the sense of duty has been observed.11

Consequently, if it is admitted, as with membership, that there is now an element of free choice with regard to active participation in Māori organisations, then the concept of voluntary contribution can encompass cultural obligation.

Chapter 3: Identifying the Types of Units to be Included

Collectively, NPIs have been seen to belong to a sector variously described as the non-profit sector, the third sector, the voluntary sector, the civil society or the social economy. However it is described, the sector is well-rooted in New Zealand society.

Maori society, being village-based, had what has been described as an ‘economy of affection’. Simply put, each person had a duty of care to one’s community, be it whanau, hapu or iwi, to contribute in whatever way was necessary to maintain the strength and wellness of that community. This ethos continued in many walks of life as Europeans settled in New Zealand.

From early in the history of European settlement, people came together for mutual assistance, without government direction or the desire to make profits. The building society movement, begun in northern England, in which people clubbed together to save for housing was an early example. The first building societies in New Zealand were established in the 1860s.

Friendly societies were established even earlier. In these societies, members contributed to a common fund from which benefits were paid at times of sickness or old age. As early as 1883, there were 18,843 members of friendly societies. And when European settlers experienced failure and hardship through unemployment and poverty, the churches provided the first orphanages. Moreover, the churches had already established the first schools, primarily mission schools to introduce Maori to Christianity.

Mutual cooperation also underpinned the celebration of early achievements. Organised thoroughbred racing was a feature from the beginning of European settlement. Race meetings were held to celebrate the first anniversaries of the Auckland, Wellington, Nelson, Otago and Canterbury settlements and racing clubs in each area soon followed. It was also not long before small orchestras, choral societies, operatic groups and brass bands, all amateur, arose spontaneously from community interests.

Today, in the 21st century, NPIs are numerous and involved in a wide range of activities in New Zealand society, such as arts and theatre, sport and recreation, education, health, welfare, animal safety, environmental protection, international aid and relief, trade unions, political parties and religion.

The range of organisations that typically12 appear in the non-profit sector includes:

1. Non-profit service providers, such as hospitals, tertiary education institutions, day-care centres, schools, social service providers and environmental groups
2. International aid and relief organisations promoting economic development or poverty reduction in less developed areas
3. Arts and culture organisations, including museums, performing arts centres, orchestras, ensembles and historical or literary societies
4. Sports clubs involved in amateur sport, training, physical fitness and competitions
5. Advocacy groups that work to promote civil and other rights, or advocate the social and political interests of general or special constituencies
6. Philanthropic trusts and other organisations, that is, entities that have at their disposal assets or an endowment and, using the income generated by that asset, either make grants to other organisations or carry out their own projects and programmes
7. Community-based or grass-roots associations that are member-based and offer services to, or advocate for, members of a particular neighbourhood or community
8. Tangata whenua-based organisations that draw their membership from tangata whenua and provide governance for a particular iwi, hapu or marae and offer social services to, or advocate for, their people
9. Political parties that support the placing of particular candidates into political office
10. Social clubs that provide social services and recreation opportunities to individual members and communities
11. Unions, business and professional associations that promote and safeguard labour, business or professional interests
12. Religious congregations, such as parishes, synagogues, mosques, temples and shrines, which promote religious beliefs and administer religious services and rituals. It should be noted that religious congregations are different from religiously affiliated service agencies in such fields as health, education and social services.

In chapter 4 the scope of the NPI sector is examined by systematically using the above outline and applying the structural-operational definition to specific NPIs or groups of NPIs, in line with the decision rules established in chapter 2.

Chapter 4: Identifying the Scope of the NPI Satellite Account in Practice: Specific cases

In what follows, the scope of the NPI Satellite Account is examined by systematically using the outline from chapter 3 and applying the structural-operational definition to specific organisations in line with the decision rules established in chapter 2. The specific cases presented are not meant to be definitive of a group of organisations. Firstly, they are discussed to illustrate the application of the structural-operational definition and, secondly, in some cases, to resolve the treatment of organisations for which inclusion in the NPI satellite account, for various reasons, is unclear.

Non-profit service providers: Education and research

This group includes NPIs that provide pre-school, primary and secondary education, tertiary education, other education (such as adult literacy organisations, academies, sheltered workshops, industry training organisations) and research services, where the organisations in question meet all five criteria of the structural-operational definition.

Table 4: Examples of education and research providers

Example	Organi- sation	Not-for- profit	Private	Self-governing	Non-com- pulsory	In
Universities	√	√	X	√	√	No
Kindergartens	√	√	√	√	√	√
Kohanga reo	√	√	√	√	√	√
Playcentres	√	√	√	√	√	√
School boards of trustees	√	√	X	√	√	No
Parent teacher associations	√	√	√	√	√	√
Private schools	√	√	√	√	√	√
Industry training organisations	√	√	√	√	√	√
Leather and Shoe Research Association.	√	√	√	√	√	√

Specific cases:

Universities
Universities are crown reporting entities and specific examination confirms that they are not sufficiently separate from government control to be in-scope for the NPI satellite account.

Each of the eight universities was established and constituted under their own statute or statutory instrument. Accordingly, the universities are bodies corporate with perpetual succession. Universities have all the necessary powers to operate in their own right.

In the case of dissolution of universities, the residual assets go to the Crown, which also bears any outstanding liabilities. The process for dissolution requires a resolution of the House of Representatives, along with requirements for consultation, reasonable grounds, and consideration of placement of the assets elsewhere in the tertiary education sector.

In relation to who controls universities, the Education Act 1989 balances the need for academic freedom and institutional autonomy on the one hand, and the national interest and accountability on the other. This balance is reflected in the structure of university governance. At one level the university councils govern the operations and policies of universities, with the government having only minority representation on the councils. This enables universities to have academic freedom and institutional autonomy. At another level, there is a cascading set of ‘steering’ documents which allow the government some ability to ensure the efficient use of national resources, the national interest, and the demands of accountability are met.

In addition to these powers there are a number of other powers:

• Section 223 of the Education Act allows the Minister to direct universities to provide (or continue to provide) particular courses of study or training
• Under the Public Finance Act 1989 and Education Act, ministerial approval is required for all significant borrowing and investment
• Under the Education Act, in serious cases of financial risk, the Council can be dissolved and a commissioner appointed by the government.

In summary, while the government cannot unilaterally determine the financing and operating policies of universities, it does have a significant level of control such that universities should be regarded as part of the government sector and not as independent NPIs.

Kindergartens
There are approximately 36 kindergarten associations. These are umbrella district-wide organisations for the kindergartens in their area. Each of the associations is an incorporated society and comprises several ‘sub-district’ kindergartens. Each kindergarten has its own parent committee, but management responsibility lies with the regional kindergarten association. They collect the financial accounts for each of their kindergartens.

As incorporated societies, the kindergarten associations are therefore NPIs, free to dissolve themselves or change their mission. However, while they manage, control and fund certain operations such as caretaking and cleaning of the kindergartens, the bulk of their funding comes from the Crown and brings with it some measure of control, such that teaching staff, under the State Sector Act 1988, are part of the State education service. The government funding pays for the teaching staff, for which the qualifications and remuneration are set by government policy, as is the teaching curriculum. For these reasons kindergartens are classified in the government sector in the NZSNA. However, in terms of the structural-operational definition, the control is not considered to be institutional in that kindergartens themselves remain autonomous organisations. As such, kindergartens are deemed to be in-scope or the NPI satellite account.

Kohanga reo
Kohanga reo are childcare centres that focus on teaching the Māori language and culture. They are funded and controlled through the Te Kohanga Reo National Trust Board, which receives a government grant from the Ministry of Education. Furthermore, inspection is by government so, like kindergartens, there is a case for them to be classified to the government sector.

Unlike kindergartens, however, the teachers do not have to be qualified and the funding is not direct from the government. The Te Kohanga Reo National Trust Board is a charitable trust established under the Trustee Act 1956. Therefore, because the various kohanga reo are controlled and funded by a charitable trust, they meet all of the criteria of the NPI structural-operational definition.

Playcentres
Playcentres are parent cooperatives, registered as incorporated societies, providing early childhood education based on the importance of parents as educators of their own children and promoting child-initiated play. Playcentres are funded by government in a similar manner to kindergartens and kohanga reo. However, as private, self-governing NPIs, for which any surplus cannot be used for the private gain of members in terms of the structural-operational definition, playcentres are in-scope for the NPI satellite account.

School board of trustees
School boards administer schools on behalf of the Crown and are recognised as Crown entities. Under the Education Act 1989, “Every Board is hereby deemed to be the agent of the Crown in respect of its property and the exercise of its functions, and is entitled accordingly to all the privileges the Crown enjoys in respect of exemption from taxation and the payment of fees or charges, and from other obligations”. Accordingly, they are not independently separate from government and therefore do not meet all of the criteria of the NPI structural-operational definition.

Parent teacher associations
Parent teacher associations (PTAs) are incorporated societies made up of parents who come together to support their children’s education, staff, and Board of Trustee members. They operate with a degree of informality to the extent that they can choose their own role in the school’s operation. The focus is usually on raising funds for particular projects, facilitating communication between home and school, and supporting parents as children’s first teachers. As private, self-governing NPIs, for which any surplus cannot be used for the private gain of members in terms of the structural-operational definition, PTAs are in-scope for the NPI satellite account.

Private schools
Although assisted by government funding for teaching staff, private schools charge fees that can result in the school making a surplus. However, as incorporated societies or charitable trusts, any surplus cannot be used for the private gain of members or governors of the board and therefore, in terms of the structural-operational definition, they are in-scope for the NPI satellite account.

Industry training organisations
Industry training organisations (ITOs) are the standard-setting bodies for the industries they represent and are jointly funded by government and industry. They are allowed for under statute (Industry Training Act 1992) but each one is not individually set up under statute, being instead (with the exception of Sfrito - Sport, Fitness and Recreation Industry Training Organisation) an incorporated society that chooses to register.

Under the Act, the Minister accords recognition to an industry organisation if it meets specified criteria, as set out in section 7. The Minister has to be satisfied that the organisation can “effectively and efficiently”:

• set skill standards (that the NZ Qualifications Authority is prepared to register)
• deliver and monitor industry training and assess attaining of standards
• provide leadership on skill and training needs
• identify current and future skill needs
• develop strategic planning and promote training. 

Once recognised, the ITO is eligible for government funding. For example, for the year ended 2003, the Retail ITO received 64 percent of its income from government (Tertiary Education Commission funding), 31 percent from the retail industry and 5 percent from other sources.

Nevertheless, although ITOs require recognition by the Crown, have much of their activity specified by the Crown and receive more than half their funding from the Crown, they remain institutionally independent of the government and in-scope. Their authority is delegated rather than sovereign and their relationship with the Crown is more akin to a partnership.

Leather and Shoe Research Association of New Zealand
This is an incorporated society whose principal members consist of the businesses of fellmongers, hide processors or tanners. Ancillary members include shoe manufacturers and wholesalers. The association provides analytical and testing services, as well as undertaking research for companies. For the year ended 31 December 2003, industry subscriptions contributed 18 percent of income, and government research funding through the Foundation for Research Science and Technology contributed 43 percent. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members in terms of the structural-operational definition, the Association is in-scope for the NPI satellite account.

Non-profit service providers: Health

This group of NPIs includes hospitals, nursing homes and NPIs providing rehabilitation,, mental health and crisis intervention, and other health services, where the organisations in question meet all five criteria of the structural-operational definition.

Table 5: Examples of Health Providers

Example	Organi- sation	Not-for- profit	Private	Self- governing	Non-com- pulsory	In
District health boards	√	√	X	√	√	No
Primary health organisations	√	√	√	√	√	√
Private hospitals	√	√	√	√	√	√
Health Care Aotearoa	√	√	√	√	√	√
Children’s health camps	√	√	√	√	√	√
IHC	√	√	√	√	√	√
Hepatitis Foundation	√	√	√	√	√	√
Plunket Society	√	√	√	√	√	√

Specific cases:

District health boards
As crown reporting entities, the district health boards are an institutional arm of the government and are therefore out-of-scope for the NPI satellite account.

Primary health organisations (PHOs)
Primary health organisations are not-for-profit and funded by district health boards to work with enrolled populations and their communities to achieve strategic goals set by government. They have a public health focus and involve a team of health professionals (including family doctors and nurses) offering a variety of services. They are charged with providing continuity of care for their enrolled populations and receive a set amount of funding from the government to subsidise a range of health services. Most New Zealand practices are now part of a PHO.

The Crown’s service agreements with PHOs set out organisational requirements such that PHOs must continue to ensure, and be able to demonstrate that:

1. they are a not-for-profit body with full and open accountability for the use of public funds and the quality and effectiveness of the services, and their constitutional document includes rules to this effect.
2. their communities, iwi and consumers are involved in the PHO’s governing processes and the PHO is responsive to its communities.
3. all contracted providers and practitioners can influence the PHO’s decision making.

Nevertheless, the service agreements with the Crown do not compromise the self-governance of PHOs and accordingly they are in-scope for the NPI satellite account.

Private hospitals
Although assisted by government funding contracts through district health boards, private hospitals charge fees that can result in the hospital making a surplus. But as with private schools, in terms of the structural-operational definition they are in-scope for the NPI satellite account.

Hospitals within the Southern Cross Healthcare group are administered by the Southern Cross Health Trust, which is registered as a charitable trust. The trust is financially and administratively independent from the operations of the Southern Cross Medical Care Society (medical insurer), which established it, although each has the same board members. The hospitals operate within the trust on a stand-alone basis, receiving no direct financial support from the Southern Cross Medical Society and are managed in order that they provide an appropriate financial return on their operations. Therefore, although the operation of the hospitals reflects a market orientation, its core purpose is charitable. Any profits cannot be used for the private gain of the trustees or trust members and therefore, the trust is in-scope for the NPI satellite account.

Health Care Aotearoa Inc. (HCA)
Health Care Aotearoa is an incorporated society, being a national network of primary health providers which are not-for-profit and community controlled. Its mission statement is “to be a highly effective support and lobbying network for not-for-profit, community-controlled primary health care providers in Aotearoa.” It has 54 member organisations and 15 associate members. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members in terms of the structural-operational definition, HCA is in-scope for the NPI satellite account.

New Zealand Foundation for Child and Family Health and Development
As the Children’s Health Camps Board, this organisation was primarily funded through contracts with the Crown, was required to report to Parliament and be audited by the Auditor General. However, in April 2000 the Board was dissolved by an act of parliament and became an independent charitable trust, the New Zealand Foundation for Child and Family Health and Development. It is therefore in-scope for the NPI satellite account.

This example also demonstrates that the scope of the NPI satellite account changes over time. Any time series for the satellite account aims to record this. Although now in-scope, when constituted as the Children’s Health Camps Board, this organisation would have been out-of-scope as not being independent of government.

Intellectually Handicapped Society (IHC)
The IHC advocates for the rights, inclusion and welfare of all people with an intellectual disability and supports them to lead satisfying lives in the community. It is an incorporated society and its controlling body is privately appointed. Although a large proportion of its funds is sourced from government grants, the funding is contractual and the society must bid for the contracts. It therefore charges the government (through district health boards) for its services at market prices still. Yet it remains an organisation that is not profit-oriented, as it continues to raise a significant proportion of funds from donations, has a large voluntary labour force and any surplus cannot be used for the private gain of members. It therefore is in-scope for the NPI satellite account.

Hepatitis Foundation
The Hepatitis Foundation of NZ is a charitable trust governed by a board of trustees in terms of the Charitable Trusts Act 1957. The Foundation is now contracted to the Ministry of Health as the national provider for long-term follow-up of hepatitis B carriers in New Zealand. In recent years, increasing numbers of hepatitis C carriers have also registered with the Foundation for follow-up and information. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members, the Hepatitis Foundation, in terms of the structural-operational definition, is in-scope for the NPI satellite account.

Royal New Zealand Plunket Society
The Plunket Society is an incorporated society, providing well-child and family health services in New Zealand. It provides a mix of a professionally educated workforce working hand-in-hand with volunteers throughout New Zealand. Plunket programmes aim to support families with young children by providing appropriate clinical and support programmes, educational activities and so on. They are the only non-profit organisation in New Zealand to provide these facilities to New Zealand families. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members in terms of the structural-operational definition, Plunket is in-scope for the NPI satellite account.

Non-profit service providers: Social Services

This group includes NPIs providing social services, emergency and relief; and income support and maintenance, where the organisations in question meet all five criteria of the structural-operational definition.

Table 6: Examples of Social Service Providers

Example	Organi- sation	Not-for- profit	Private	Self-governing	Non-com-pulsory
Presbyterian Support	√	√	√	√	√
Barnardos New Zealand	√	√	√	√	√
Women’s refuges	√	√	√	√	√
Age Concern New Zealand	√	√	√	√	√
Volunteer fire brigades	√	√	√	√	√

Specific cases:

Presbyterian Support New Zealand
Presbyterian Support is an incorporated society made up of seven autonomous regional organisations. Service emphasis varies between the regions but the core activities concentrate on assisting youth in need, children and families, and elderly people through residential and community services. Presbyterian Support regional organisations are incorporated societies registered under the Charitable Trusts Act 1957. Although Presbyterian Support shares a common heritage with the Presbyterian Church it is independent, and responsible for raising its own funds for its services and determining the direction of those services. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members, Presbyterian Support, in terms of the structural-operational definition, is in-scope for the NPI satellite account.

Barnardos New Zealand
Barnardos is a charitable trust and is New Zealand’s largest children’s organisation. Barnardos provides a range of care, education and support services developed specifically for New Zealand children and their families, aimed at providing all children with the very best start to life. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members, Barnardos, in terms of the structural-operational definition, is in-scope for the NPI satellite account.

Women’s Refuge Auckland
Women’s Refuge Auckland is an incorporated society run by women for women and children. It is one of 51 local women's refuges that are part of the National Collective of Independent Women's Refuges Inc. On average, the various refuges employ two paid workers plus unpaid advocates. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members, the Auckland refuge, in terms of the structural-operational definition, is in-scope for the NPI satellite account.

Age Concern New Zealand
Age Concern New Zealand is a not-for-profit, charitable organisation, registered as an incorporated society. Its mission is to promote the quality of life and well-being of older people, advocating positive healthy ageing for people of all ages. As a national organisation it is a federation of local Age Concern councils, which each provide information and services in cities and most major provincial centres around the country, Age Concern NZ operates as a strategic national body for the local Age Concern Councils. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members in terms of the structural-operational definition, Age Concern is in-scope for the NPI satellite account.

Volunteer fire brigades
To operate as brigades, associations are required to register with the crown entity, the Fire Service Commission. Furthermore, the brigades have to meet public criteria of efficiency in organisation and operation, monitored by the Fire Service Commission, and can be deregistered accordingly. Separate to their registration with the Fire Service Commission, the associations are also incorporated societies and are therefore independent of the Commission in terms of both governance and finance.

So while in their day-to-day operations they must meet government administered standards, on the other hand they remain independent of government and are in-scope for the NPI satellite account.

Non-profit service providers: Environment

This group includes NPIs engaged in environment and animal protection, where the organisations in question meet all five criteria of the structural-operational definition.

Table 7: Examples of Environment and Animal Protection Organisations

Example	Organi-sation	Not-for-profit	Private	Self-governing	Non-com-pulsory	In
RNZSPCA	√	√	√	√	√	√
Veterinary clubs	√	√	√	√	√	√
Forest and Bird Society	√	√	√	√	√	√

Specific cases:

Royal New Zealand Society for the Prevention of Cruelty to Animals
The RNZSPCA is an incorporated society which, through its district branches, provides help to animals and owners. The national governing body of the organisation is the National Council, elected at the AGM by representatives from the districts. Each of the 54 local SPCAs incorporates in its title the name of the district in which it operates. For example, the Waikato Branch RNZSPCA, Canterbury Branch RNZSPCA, and so on. Not all local SPCAs are ‘branches’. A small number are member societies. These member societies do not use ‘RNZ’ in their name (eg Wellington SPCA, Otago SPCA).

Each of the 54 local SPCAs runs its own affairs and handles its own finances. A voluntary committee controls the activities. The larger SPCAs have some paid staff, but most rely on unpaid personnel. Each has one or more warranted inspectors, paid or unpaid, to investigate complaints of cruelty and to enforce the Animal Welfare Act 1999. Funding comes from donations, bequests and the society’s own fund-raising efforts. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members in terms of the structural-operational definition, the RNZSPCA is in-scope for the NPI satellite account.

Veterinary clubs
Veterinary clubs and associations are incorporated societies. They exist in rural areas, being a community-based partnership between farmers and veterinarians to ensure the provision of veterinary services in their area. Under the club concept, the veterinarian is paid a salary (as opposed to a private practice where the veterinarian shares in the profits). While the dominant form of veterinary service is now private practice, there are still about 30 such community-based practices throughout the country, employing 135 -140 veterinarians.

As constituted, veterinary clubs are in-scope for the NPI Satellite Account. However, some clubs are now moving to profit sharing. Under the Income Tax Act, income derived by the club is exempt if none of its funds is used for “private pecuniary profit”. If profit sharing by the veterinarian is deemed not to be part of the contractual payment to the veterinarian (eg a bonus), but instead a reduction in the club’s income exempt from income tax, then the club will move out-of-scope.

Royal Forest and Bird Protection Society
Forest and Bird, as it is referred to, is an incorporated society. Its objectives are to preserve and protect the indigenous flora and fauna and natural features and landscapes of New Zealand, for their intrinsic worth and for the benefits of all people. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members, this society, in terms of the structural-operational definition, is in-scope for the NPI satellite account.

International aid and relief organisations
This group includes NPIs engaged in international activities, such as promoting economic development or poverty reduction in less developed areas, where the organisations in question meet all five criteria of the structural-operational definition.

Table 8: Examples of International Aid and Relief Organisations

Example	Organi-sation	Not-for-profit	Private	Self-governing	Non-com-pulsory	In
Oxfam	√	√	√	√	√	√
World Vision	√	√	√	√	√	√
Pacific Leprosy Foundation	√	√	√	√	√	√

Specific cases:

Oxfam New Zealand
Oxfam NZ is a charitable trust and an affiliate of Oxfam International (OI). The OI secretariat, based in Oxford, UK, coordinates the strategy and international advocacy programmes of the 12 Oxfam affiliates who are bound by its constitution and code of conduct. Oxfam NZ is affiliated to the Council for International Development (CID), the NZ umbrella group for development and humanitarian agencies. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members, Oxfam NZ, in terms of the structural-operational definition, is in-scope for the NPI satellite account.

World Vision New Zealand
World Vision is an international Christian humanitarian aid and development organisation, involved with development and relief projects in 96 countries. World Vision New Zealand is a fundraising office which partners with other World Vision entities to carry out programmes focusing on community development, emergency relief, rehabilitation and disaster mitigation, and advocacy and education. As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members in terms of the structural-operational definition, World Vision is in-scope for the NPI satellite account.

Pacific Leprosy Foundation
The foundation (formerly the Leprosy Trust Board) is a national, charitable organisation working within New Zealand and the South Pacific region. The foundation is nondenominational and registered under the Charitable Trusts Act 1957. Its purpose is “the elimination of leprosy as a public health risk in the Pacific and the continuing care of patients with disability or social disadvantage due to past active leprosy.” As a private, self-governing NPI, for which any surplus cannot be used for the private gain of members, the Leprosy Foundation, in terms of the structural-operational definition, is in-scope for the NPI satellite account.

Arts and cultural organisations
This group of NPIs includes organisations such as film societies, community theatres, community libraries, historical associations, garden societies, operatic societies, youth orchestras, pipe bands and Māori performing arts groups, where the organisations in question meet all five criteria of the structural-operational definition.

Table 9: Examples of Arts and Cultural Organisations

Example	Organi- sation	Not-for- profit	Private	Self-governing	Non-com-pulsory	In
Canterbury Museum Trust	√	√	√	X	√	N
Wellington Zoo Trust	√	√	X	√	√	N
Riccarton Bush Trust	√	√	X	√	√	N
Repertory theatres	√	√	√	√	√	√
Brass bands	√	√	√	√	√	√

Four of New Zealand’s six special purpose local authorities are arts and cultural organisations, namely: Aotea Centre Board of Management, Canterbury Museum Trust Board, Council of the Auckland Institute and Museum, and Otago Museum Trust Board. (The other two are the Masterton Trust Lands Trust and the Greytown District Trust Lands Trust.)

Specific cases:

Canterbury Museum Trust Board
The Canterbury Museum Trust Board is a non-profit-making institution for which the current establishing legislation is the Canterbury Museum Trust Board Act 1993. The board of 11 comprises six appointed by local authorities, but with no local authority having a majority. The Christchurch City Council has four members. The board is principally funded by way of levies from the five local authorities represented, who include funding for the levy in their rates. The Christchurch City Council provides 90 percent of the levy income.

Whether the Board is institutionally separate from local government or not, it does not quite pass the decision question regarding government appointees having veto power or not. Section 16 of the Canterbury Museum Trust Board Act gives either the Christchurch City Council or two or more of the remaining contributing authorities the right to object to the level of levies proposed in the Board’s draft annual plan. Furthermore, the local authorities can vary the amount of the levy independently of the Board if not less than three of them agree, or the Christchurch City Council can do so alone. On the major issue of funding, the Christchurch City Council has power beyond its representation on the Board and therefore the Board is viewed as part of the local government sector and out-of-scope for the NPI satellite account.

Wellington Zoo Trust
Although established as a charitable trust, this is a council-controlled organisation (as defined by the Local Government Act 2002), 100 percent owned and controlled by the Wellington City Council. It is therefore out-of-scope. (See also chapter 2 above.)

Riccarton Bush Trust
A public entity under the Public Audit Act 2001, the trust was incorporated under a 1914 Act of Parliament. Under the act, the Trust has the power to levy the Christchurch City Council for funding to maintain and operate Riccarton Bush, Riccarton House and its grounds. The Christchurch City Council appoints six of the nine members on the Trust Board. Since the majority of the board is appointed by a local authority the