Frequently Asked Questions: Charitable Trust

How long has the Ngāi Tahu Charitable Trust been in existence?

The Ngāi Tahu Charitable Trust (NTCT) was established by a Deed of Trust dated 23 March, 1994. Before this, the Ngāi Tahu Māori Trust Board (NTMTB) was the Body Corporate constituted by Section 4 of the Ngāi Tahu Trust Board Act 1946.

The NTMTB was concerned that the old trust under the Trust Board Act was an inadequate vehicle for promoting and developing our educational and cultural aspirations. It was simply too limited in its scope. As a result, a new Charitable Trust Deed was developed and the new body now holds substantial assets.

Where did the money come from to establish NTCT?

The NTMB donated $100 to NCTC in 1994. The bulk of the original funds however, were loaned to NTCT in 1998 when Ngāi Tahu reached agreement to settle its historical Treaty of Waitangi claims. At that time, Te Rūnanga o Ngāi Tahu had to make a decision about what to do with the cash component of the settlement ($170m).

In line with our tribal whakatauki : Mo tatou, a, mo ka uri a muri ake nei – for us and our children after us, it was decided that these funds be put into NTCT, meaning these funds would be used for charitable purposes for the benefit of Ngāi Tahu Whānau. Te Rūnanga o Ngāi Tahu continues to place funds received from settlements into NTCT and as at the end of the 2024 financial year $336m was on loan to NTCT.

How much has the NTCT distributed since 1994?

There were no significant transactions from 1994-1999. Since 1999 however, NTCT has invested in income-generating businesses which has enabled it to distribute $764m to charitable outcomes. Te Rūnanga o Ngāi Tahu has also distributed $242m to non-charitable activities during this period such as Whai Rawa, the tribe's managed investment scheme established to uplift the financial wellbeing of Ngai Tahu Whānau.

What kinds of charitable purposes are supported by NTCT?

We have a wide range of charitable programmes that are continuing to improve the health and wellbeing of Ngai Tahu Whānau. Not only in a health and social services sense but also in the way that we contribute to environmental programmes, and programmes uplifting some of the remotest communities in Aotearoa. We invest in the capability and education of people by investing in scholarships and industry-based training programmes; we provide cadetships and internships, we provide comprehensive incentives for our people to learn te reo Māori, and we fund cultural and community-based initiatives that help our people, and their communities, grow.

We also provide grants to charitable entities that have been set up by our Papatipu Rūnanga (and to Papatipu Rūnanga themselves if they are charitable entities). These grants are steadily increasing and enable charitable activities to be carried out at a local level throughout the Ngai Tahu takiwā. 

How does the wider community benefit from the activities of NTCT?

NTCT carries out a wide range of charitable activities in the cultural, educational, health and environmental sectors and 100% of the trust funds are used for these charitable purposes. Historically many of our people were in lower socio-economic groups (often in remote regions), with poor educational and health outcomes. Ultimately the aim of NTCT is to improve outcomes for our people in all areas where there is a disparity between Ngāi Tahu and non-Māori on a range of social indicators provided this is a charitable activity. This also benefits wider society and there is less draw on the taxpayer and Government tofund these charitable initiatives. Since settlement, social indicators for Ngai Tahu Whānau are improving.

We also run businesses which pay GST and PAYE tax, employ large numbers of people, bring funds into Aotearoa through export earnings and tourism businesses; engage contractors and third parties to complete projects such as property sub-divisions, and enrich Aotearoa through our Ngāi Tahu cultural activities and perspectives.

Why do you operate commercial entities that are charitable?

The role of each of our commercial entities is to generate pūtea (income) to enable charitable activities to be carried out by the NTCT. Put simply, more income means more pūtea available for distribution for charitable purposes. NTCT has several options to generate income for distribution. A pathway followed by many charitable trusts is to be a relatively passive investor in stocks and shares and property.

The Trustees of the NTCT have chosen to run active operating businesses asthey provide higher cash returns (on average) when compared to more passive investments. NTCT’s founding businesses of tourism, fishing, farming and property are also consistent with rebuilding a Ngāi Tahu presence within our tribal area. The businesses also provide employment, governance and training opportunities for Ngai Tahu Whānau.

What are the advantages having commercial entities under NTCT?

The advantage of operating commercial entities under the NTCT structure is that income tax is not required to be paid on the profits of these entities. It should be noted that the same would be true if Ngāi Tahu invested in government bonds.

The ultimate shareholder of all these entities is NTCT. No profit or distribution from these companies goes for individual or private gain. Whilst our charitable entities are not obliged to pay income tax they do have an obligation that non-charities don’t have, that additional obligation is to carry out charitable activities. As was mentioned above, more than $764m has been distributed for charitable purposes by NTCT and these funds were largely generated by our charitable entities.

This means more money for distribution for charitable purposes. The government has specifically recognised this as a public good and is consistent with the provisions in the Charities Act 2005 and with other jurisdictions around the world.

This does not mean Ngāi Tahu never pays tax. Whenever Ngāi Tahu undertakes activities or provides distributions that are not charitable (according to the charities law), the appropriate taxes are paid, either by Te Rūnanga o Ngāi Tahu or by the recipient. These include direct distributions to whānau via our iwi savings scheme Whai Rawa.

We pay PAYE and KiwiSaver on behalf of our employees, GST for goods and services we obtain and we do have investments (listed investments or via Private Equity Managers), that pay whatever tax is appropriate in their own right as a company.

What are the disadvantages of having the companies running under NTCT?

As was mentioned above, our charitable entities have an obligation that other non-charitable entities don’t have. That additional obligation is to make charitable distributions. As was mentioned above more than $764m has been distributed for charitable purposes by NTCT and these funds were largely generated by our charitable entities.

NTCT itself faces restrictions on the activities it can carry out with the funds that are generated for distribution which it would not face if the funds were generated by tax paying entities. For example, NTCT cannot carry out any activity that is for the personal benefit of any individual.

Do the commercial entities of Ngai Tahu have an advantage over the competition because they operate under a charitable trust structure?

There are advantages and disadvantages of the Ngai Tahu’s commercial entities being charities. And these are set out above. In short, the advantage is being exempt from income tax. The disadvantage is what happens to the profits or retained earnings. A tax paying entity will pay tax on its profits and then have the freedom to do as it wishes with the pūtea remaining. This is not so for a charitable entity, which must allocate its profit to its charitable purposes over time. The profits of a charity cannot be used for personal or individual benefit.

It should be noted that just because a company is not a charitable entity does not automatically mean that it pays tax. There have always been a range of entities in New Zealand who do not pay tax or at least minimise tax liability.

Do the entities carry out charitable activities?

As a general rule, they do not directly carry out charitable activities. The main role of the commercial entities is to generate income for distribution by NTCT. These entities also endeavour to add value in the communities where they operate. Several of our tourism entities undertake work in conservation and species management. As an example, Rainbow Springs is the largest kiwi hatchery in New Zealand and Dart River Safaris works with the Department of Conservation on predator trapping to improve outcomes for Mohua.

It should be noted that there is no rule that requires charities to generate income from activities that are themselves charitable in nature. If this were the case then many charitable trusts, including the larger community trusts, would not be able to generate income by investing in stocks and shares or even in government bonds.

Is NTCT keeping money aside and not using it for charitable purposes?

No, we are not putting money away for the sake of creating a mega-fund. Our businesses need to make a return of more than 8% per annum just to retain the real value of the portfolio. We have a spending rule where a target rate of distribution is set based on the market value of all assets. This means as the businesses grow in value our distribution increases. In the past 10 years our received distribution has grown from $37m to $85m (NTHC distribution). This means that the way we operate is sustainable in the long term.

Our spending rule approach is similar to the many of the larger Community Trusts in New Zealand and with the Yale and Harvard Endowment Funds, so we compare well with nationally and internationally recognised standards.