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Charitable Trusts Act 1957

Schemes in respect of certain charitable trusts

32: Property may be disposed of for other charitable purposes

You could also call this:

“You can use charity money for a different good cause if the first plan doesn't work out”

When you have property or money that’s meant to be used for a good cause (which we call a charitable purpose), sometimes things don’t go as planned. If it’s impossible, too hard, or not a good idea to use it for the original purpose, or if there’s not enough money, or if the purpose has already been achieved, or if it’s against the law, useless, or unclear, then the property or money can be used for a different good cause instead.

The same thing can happen if there’s too much property or money for the original good cause. In that case, the extra can be used for another good cause.

However, this doesn’t apply in two situations: if the gift would normally fail completely and couldn’t be used for any other good cause, or if the property or money can be dealt with under Part 4 of this law.

This rule can also be used when the original good cause was set out in a plan approved by a court or by the Attorney-General. In these cases, you might be able to go back to the original purpose, with or without changes.

These rules apply to trusts and plans that were made both before and after this law came into effect.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM309960.

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Part 3 Schemes in respect of certain charitable trusts

32Property may be disposed of for other charitable purposes

  1. Subject to the provisions of subsection (3), in any case where any property or income is given or held upon trust, or is to be applied, for any charitable purpose, and it is impossible or impracticable or inexpedient to carry out that purpose, or the amount available is inadequate to carry out that purpose, or that purpose has been effected already, or that purpose is illegal or useless or uncertain, then (whether or not there is any general charitable intention) the property and income or any part or residue thereof or the proceeds of sale thereof shall be disposed of for some other charitable purpose, or a combination of such purposes, in the manner and subject to the provisions hereafter contained in this Part.

  2. Subject to the provisions of subsection (3), in any case where any property or income is given or held upon trust, or is to be applied, for any charitable purpose, and the property or the income which has accrued or will accrue is more than is necessary for the purpose, then (whether or not there is any general charitable intention) any excess property or income or proceeds of sale may be disposed of for some other charitable purpose, or a combination of such purposes, in the manner and subject to the provisions hereafter contained in this Part.

  3. This section shall not operate to cause any property or income to be disposed of as provided in subsection (1) or subsection (2)—

  4. if in accordance with any rule of law the intended gift thereof would otherwise lapse or fail and the property or income would not be applicable for any other charitable purpose:
    1. in so far as the property or income can be disposed of under Part 4.

      1. Subject as aforesaid, this section shall extend to cases where the charitable purpose affecting any property or income is defined by a scheme approved by the court under this Part or otherwise or approved by the Attorney-General under Part 4, and in any such case the original purpose or purposes may be restored, with or without modifications.

      2. The provisions of this section shall apply with respect to trusts created, and to schemes approved, before or after the commencement of this Act.

      Compare
      • 1908 No 164 s 15
      • 1951 No 29 s 2