NZARC Blog

The New Zealand Association Resource Centre Trust (NZARC) blog is a place for board members, partner organisations, and subscribers to contribute articles and discuss issues of relevance to the non-profit sector. Contributions are welcome and encouraged.

New Copyright Act

Commerce Minister Simon Power drove through the Copyright Bill a few months ago. It gets enacted on 1 September, but as of now (today) illegal filesharing will count towards penalties. Labour supported it in order to keep the termination clause inactive.

InternetNZ (Internet New Zealand Inc) has launched a new website 3strikes.net.nz to help people and organisations get ready for the new copyright law

What’s the new law about?

The law is called the Copyright (Infringing File Sharing) Amendment Act 2011. It amends the Copyright Act 1994 to provide owners of copyrighted works such as movies, TV shows and music a quicker and easier way to penalise people infringing their copyright via online file sharing. The intention of the law changes is to crack down on peer-to-peer file sharing.

You get 2 notices (warnings) and then, following the 3rd notice, the copyright owner can take you to the Copyright Tribunal. Depending upon circumstances, generally the minimum penalty is $275 and maximum $15,000, payable to the copyright owner.

The person who owns the Internet account (account holder) is liable, even if he or she wasn’t the person who broke the law. Allegations of copyright infringement made against you (the account holder) by the copyright owner are presumed to be correct unless you give evidence or reasons why you aren’t guilty.

When does the new law start?

The law comes into force on 1 September 2011.

However, notices can be sent for alleged infringements occurring in the 21 days before the notice. Therefore, allegations of infringements from 11 August 2011 onwards count under the new law.

What’s covered by the law changes?

Only online file sharing that infringes copyright. “File sharing” is defined by the new law as:
  • material uploaded or downloaded from the Internet (and) using an application or network that enables the simultaneous sharing of material between multiple users.
  • Anything that doesn't meet both parts of this definition is not covered by the new law.
The intention of the law changes is to crack down on peer-to-peer file sharing (see details in InternetNZ press release). This means using peer-to-peer protocols like Gnutella and BitTorrent with peer-to-peer software like uTorrent, BitComet, FrostWire, Ares, LimeRunner, and Vuze.

While the intention of the law changes is to target peer-to-peer infringing file sharing alone, the definitive word on what’s covered and what’s not will depend upon decisions of the Copyright Tribunal and Courts if the scope of the law is ever tested.

Remove unneeded P2P software

Peer-to-peer (P2P) software is used to exchange (download and upload) files between people. P2P allows users to download files such as music, movies, and games using a file sharing software client that searches for other connected computers (called ‘peers’). Similarly, other computers on the Internet are able to search for files on your computer.

Examples of P2P software includes uTorrent, BitComet, FrostWire, Ares, LimeRunner, and Vuze. There are many others and the list keeps changing.

Having P2P software is legal and can be used for many legal file exchanges. However, you need to keep in mind that the new law specifically targets P2P (see details in InternetNZ press release). Unless you are an advanced Internet user, can manage the risks, and use P2P for legitimate purposes, the law changes makes P2P too risky for most people. Remove all P2P software from your computer. Make sure you remove it completely, including any directories and files associated with the software. This step on its own will hugely reduce your risks from the new law. If you’re an advanced Internet user and decide to continue using P2P, you must understand the risks and take sensible steps to manage them.

Recognise the seriousness and resources of copyright owners

Many copyright owners take detection and prosecution of copyright infringement very seriously. Some like the Motion Picture Association or the Recording Industry Association of America have significant resources and determination to go after infringers. If anything, they can be overzealous so don’t underestimate the seriousness of the new law.

There are many ways that copyright owners detect infringement of their work. Sophisticated technologies include digital fingerprinting/watermarking, automated webcrawlers, and countermeasures.

Three common detection methods used are:
  1. Using law enforcement and court action internationally to obtain lists of IP addresses of people infringing their copyright
  2. Setting up fake websites to lure unsuspecting people
  3. Using third party expert services such as Bay TSP, Peer Media Technologies, and Copyright Enforcement Group
By Jenny Kirk

Retaining and Attracting new members

As we see changes in global industries, we can’t possibly think we are immune from the way our members look to us for advice, guidance and information to assist them navigate the tough times. We are only too keenly aware that some associations are striving to retain and attract new members. 

We thought an article recently written by Gregory Bondar in the August 2011 Third Sector magazine had some very practical advice. He identified five forces that he believes will be important considerations over the next decade shaping how an organisation will see threats and opportunities.

His top five potentially disruptive forces are:

  • Technology – how will this impact upon your membership base?
  • Institutional restructuring – how are you reviewing your aims objectives and constitutions?
  • Demographic changes – how are you aligning what you offer with younger potential constituents?
  • Changes in the environment – responding to swiftly changing compliance and legislative issues?
  • Shifting societal values – how do you respond to the needs of member segments with differing needs?

How you manage human resources – what you told us.

In August you may recall we sought respondents to a survey about human resources practices in the non-profit sector.

With a response that exceeded our expectations we can share the summary findings of this research. The areas where respondents felt they most needed assistance will also guide us to what content we investigate for our upcoming HR conference which will be held around mid-June 2012. Over the next couple of months we will explore some of these areas in a little more detail.

  • Although having an attractive employment proposition can sometimes prove tricky, NFPs are able to attract people with the right attitude and appropriate fit for their organisation.
  • NFP organisations surveyed tend not to use assessments as part of their selection processes. And, those that did i.e. competencies, structured interviews etc. found a better ‘people’ fit.
  • When inducting a new staff member or volunteer, clear role descriptions and social support were used by those who considered their induction process to be effective.
  • Most organisations surveyed thought employment law was a clear strength, with alignment to employment relations, human rights act, privacy act etc.
  • Most respondents agreed they work towards a common goal, keeping employees engaged and informed through team meetings, promoting a high level of commitment
  • NFPs value leadership, learning and development, encouraging stakeholders in all areas of their organisations, however it would appear tools are not well used for ongoing assessment
  • Although NFPs consider themselves good at ‘rewarding’ good performance, it would appear that those who contribute the most are not rewarded any more highly
  • Respondents thought they had good clarity around values, mission and strategic goals, however there appears to be an opportunity for board members to provide better direction for the organisations.

We still have a bit of analysis to complete and a full breakdown will be available on our website soon. If you would like any further information about this survey please call Rosemary Mahoney in the first instance. Ph: 09 4190042

Is your constitution registered and up to date?

There’s one sure way to risk the integrity of an association/charity and that is not to register the constitution or trust deed. As the founding document, and the basis for all compliance decisions, it is critical that your document is registered! It defines who you are, how you operate, who your constituents are and your organisation’s rules and regulations.

We have witnessed a situation recently where an association spent a lot of time and energy ‘overhauling’ their most recent constitution, only then to find out it was not even registered in the first place. The association was acting ‘ultra vires’ – this means:
  • All their decisions, having been based on the most recent constitution were in fact beyond their authority
  • Any decisions could be challenged, leaving the organisation vulnerable to potential legal actions by employees or other parties

The outcome was that members became polarised by the possibilities of two different constitutions, it created a lack of confidence in the Executive Committee and caused a number of member resignations. It meant the Association had some serious ‘fire-fighting’ to do – distracting it from its core activity.

We strongly suggest you ensure your constitution/trust deed is registered and that its contents meet the needs of your association or charity.


Or email Colette on colette@associations.org.nz for more information.


Corporate Social Responsibility – what’s the return on investment?

The concept of corporate social responsibility (CSR) can find its roots right back in the late 60s and early 70s. CSR embraces an organisation’s actions and outcomes and how these impact upon its employees, key stakeholders, the environment, consumers and communities.

There are arguments for and against a company having a focus on CSR, however there are opportunities from a number of aspects. If a company chose to embrace CSR, there are ways in which they could approach this without distracting from core activities.

As reported recently in Corporate Secretary, another way of looking at this is by redefining it as Environmental, Social and Governance (ESG) – this defines the basic areas that are affected.

Taking that further - the opportunity for a company and a non-profit organisation is to partner up, finding common ground where they can assist each other to gain return on investment. Social partnerships between business and non-profits can be seen as important new strategies which could bring significant benefits to wider stakeholders

There are already great examples of this working effectively in more high profile partnerships, for example:

These opportunities need not be just for the high-profile, larger operators. A smaller non-profit with a good sense of organisational self can realistically partner with a business that has a good ‘fit’ – creating a win-win for both parties. For more information please contact Rosemary Mahoney Ph: 09 419 0042.

Is there room for a Third Sector Roundtable?

We pose the questions of whether a there is a local requirement for a Third Sector Roundtable. We are suggesting a new amalgam, at a high and therefore influential level, with the purpose of attracting movers and shakers in our industry who collectively can make a meaningful difference in advancing our interests and public perception. 

New Zealand is lacking a credible representative body like the Australian Association Forum and Not-for-Profit Network. This idea was suggested by a notable charity chairman in a recent issue of Management magazine. He promoted setting up of a body of leading volunteer leaders, not unlike the New Zealand Business Roundtable, to serve as a think tank and ideas generator for both strands of non–profit association and charity interests. There are at present two organisations set up to serve association executive and charity trustees, but neither can lay claim to being singularly successful in establishing a representative membership base. 

One of our trustees attended the recent Australian Association Forum annual conference in Brisbane, which attracted 460 participants. This is an extension of previous conversations we have had with our Australian colleagues as we work together to align more closely. We anticipate that this will enable us to provide you with a way to access a range of facilities and services with international connections. We would welcome enquiries for further information on these subjects.

From the floor:

Consider the following scenario posed by one of our subscribers:
  • 80% membership from the available sector
  • Large and rapidly growing associate membership (suppliers and others related to the industry sector)
  • Currently holding a very successful conference
  • Successful topic-specific seminars
  • Good take up of sponsorship opportunities
  • Paid advertising for self-generated newsletters and magazines
  • I am sure that I have a significant proportion of the readership saying – ‘how can I get me some of that!’.

What we find very encouraging is that the manager of this particular entity is not happy to sit on his/her laurels. Rather they are asking – how can I make this even better? So, I have agreed to put it out to our subscribers to feed back to us if you would be so kind:
  • What other revenue-generating avenues are there
  • How to cut costs without cutting services

Your feedback is greatly appreciated. We can also publish your response without reference – so come on, forward your suggestions and we can get a consolidated approach to helping make your associations and charities more effective and efficient. Send your responses to rosemary@associations.org.nz

Are you finding it hard to attract younger members?

We are getting a lot of feedback that many association and charities are finding it harder to attract the interest of Gen X and Gen Y. It seems that everyone has his or her own theory or scenario about why the upcoming generations are less inclined to join up or be active participants in common pursuits. 

The downstream effect is that it is equally difficult to field a good executive team of inspired and capable individuals, ideally with good connections and plenty of spare time. For the more middle-of- the –road sized non-profit, it is really hard to attract people ‘behind the head table’ who are leading lights in their respective occupations, professions and industries. This inevitably places a greater responsibility on any paid chief executives and managers to become both the de facto head and virtual glue - with the accompanying blame if matters take a turn for the worse. 

The question is: What can you do about this? 

Many associations and trusts are hamstrung by the rules and guidelines in their founding documents. Before embarking on any new initiatives, there is a need to review the objects clauses in their constitution and / or trust deed. Is the trust deed or constitution in tune with a potential new membership profile – is it relevant to both existing and prospective new members? We recognise the complexities of satisfying an existing membership who may be quite happy with the status quo. However, the status quo may be the exact obstacle to attracting a younger and more invigorated membership with different needs and ways of communicating.

If you have any doubts about the relevance of the terms of your constitution with the current challenges of today’s environment, we may be able to help you. We can talk with you about your particular situation and advise you about what you can do for your association or trust to become more attractive to a younger prospective membership or constituency. Please contact Rosemary Mahoney on 09 4190042 for assistance.

Incorporated Societies Act review – have your say with us!

The move to ‘overhaul’ the Incorporated Societies Act of 1908 provides an ideal opportunity for feedback around what improvements could be made.

While it can be argued that the present Act (in spite of its simplicity by modern standards) has stood the test of time, we perceive there is a growing need to bring it more into line with other corporate legislation. The volunteer governed non-profit sector is no longer immune from the complexities of contemporary commercial practice. 

There are many challenges we face today that simply weren’t a factor over 100 years ago. It is arguable whether its compliance regime should be brought more into line with the Companies Act considering the prominence of craft, industry, trade and professional interests represented by incorporated societies. 

As we experienced in putting forward a multitude of ideas and recommendations to the legislature, we are inviting input from those associations wishing to submit collectively, We believe this will achieve greater substance in terms of shared experiences and practical examples.

Matters that come to mind for the current Act are:
  • its failure to deal with internal issues like conflicts between members and the executive,
  • disputes between members and the association and power struggles at governance level.
  • the lack of provision to invoke the Registrar’s authority in resolving acrimonious relationships without recourse to the Courts
  • We have prepared a more explicit discussion paper on this subject headed “New Rules for Incorporated Societies?”, which we would be happy to forward to you. If you could please email Colette at colette@associations.org.nz for a copy. We also have a guide that we can forward to you if you are happy to contribute to the joint submission we will be making.

If you would like to make a submission yourself, please click here


Charities Commission role debate continues….

Borne out of a perceived need for an independent body to support charities, the Charities Commission was founded in 2005. The basic requirement was a commission to ‘promote public trust and confidence in the charitable sector’ - as recently pointed out by Dave Henderson of ANGOA, the Association of Non-governmental Organisations of Aotearoa.

Prior to this, the IRD would decide if an organisaton had donee status, giving advice around how this may apply to the charity.

Now the process is:
  • The Trust deed is written and then incorporated
  • The Registrar of Charitable Trusts in the Ministry of Economic development will incorporate the trust based on the trust deed that has been submitted
  • Application is made to the Charities Commission for registration
  • IRD has the final say around tax status

The Charities Commission at this stage can challenge the applicant after the trust is incorporated and therefore override the Registrar. We question if this is an acceptable process. For smaller charities looking apply for charitable status, it can sometime be quite an arduous process. Just as an overview:
  • The assessment and approval process can take between 6-8 weeks.
  • If the applying charity is ‘knocked back’ then the response process can be a time consuming and costly matter
  • If final resort is through the high court, cost is a prohibitive factor for most

There has been some concern and recent high profile cases around certain charities being deregistered. This highlights one of the current roles of the Commission, which is to monitor the activity of charities and carry out whatever action is required as a result. The Charities Commission has ‘copped a lot of flack’ for this, but let’s face it – it’s a dirty job, and someone’s got to take responsibility for it.

So then, how does the independent nature of the Commission remain so if it is absorbed into Internal Affairs? Will it solve some of the issues that are being experienced currently? We see merit in change, and look with interest to see how this change is managed.

To read the full article by Dave Henderson click here

Managing risk for a governing board

How has your board of trustees managed with the generally greater pressure for tighter controls and a sharper focus on risk management. Is this producing a more effectively run board and should they in fact be managing or governing risk? This question is posed by David Anderson, president of Anderson Governance group (Toronto based). 

We agree with David – proper risk management is shared across the principles of:
  • Leadership
  • Accountability
  • Remuneration
  • Internet technology

In doing this there is recognition of the many faces of risk management – balancing a more widely accepted management function with a generally less-understood governance function. This is in turn balanced with the ability to achieve objectives, while managing the risk of doing so.
  • Candidly reporting risk
  • Make an effort to understand risk and reduce liability
  • Focus on collective outputs rather than personal interest

We characterise good governance as the following:
  • Accountability – who is affected by the organisation’s decisions or actions
  • Consensus-oriented – mediation of different interests to reach consensus on best interests
  • Effective and efficient – processes produce results with sustainable use of resources
  • Equity and inclusiveness – all groups have opportunities to improve or maintain their well being
  • Participation – democratic representation with freedom of association and expression
  • Responsiveness – serving all stakeholders within a reasonable timeframe
  • Rule of law – fair legal frameworks
  • Transparency – decisions are freely available and accessible to those affected by decisions and enforcement