About changes at the Porirua Community Trust
Why is the Porirua Community Trust making changes to its structure?
The Porirua Community Trust (PCT) has a rather complex history which has evolved through differing Acts of Parliament, including the Licensing Trust Act, the Sale and Supply of Liquor Act and the Charities Act. More recent times has seen two entities operating, one operating under the Sale & Supply of Alcohol Act and the other under the Charities Act.
The Trust was set up under quite different conditions as a Licensing Trust during the local authority elections of 1956. At the time Licensing Trusts were established to operate and manage liquor sales in local areas, under exclusive rights which were abolished locally in 1995.
As a result the Trust’s structure has evolved to be quite complex. The parent body, the Porirua Community Trust (which held no assets), had the sole purpose of enabling public election of Trustees triennially. These Trustees were then appointed to the Board of Trust Porirua, a subsidiary charitable Trust, which held around $5m in public assets. Further, the Trustees also act as a Net Proceeds Committee for Trust House Foundation, making recommendations to Trust House Foundation for the distribution of gaming proceeds from venues in Porirua City.
Prior to the relationship with Trust House Foundation PCT used to operate its own gaming society, Mana Community Grants Foundation (or MCGF). This gaming society was wound up in 2015 as legislative requirements were becoming too complex for a gaming society of its size. This change exposed PCT to many costs which were previously shared with MCGF, including large public election costs and large administration overheads.
These factors, combined with elected Trustee fees totalling $40k per annum, meant that the current structure of PCT has been proving to be financially unsustainable for a Trust of its size and not returning a good amount back to the community, defeating the very purpose for which the Trust exists.
What options did the Porirua Community Trust look at?
Through feedback from the public consultation process in early 2018 Trustees endeavoured to look at a range of options for the future, including the original idea of setting up a modern, streamlined charitable Trust structure, as well as ideas which came from public submissions. Some of these ideas included merging operations with other local Trusts (namely the Hutt Mana Charitable Trust, the Porirua Foundation and Nikau Foundation).
Trustees agreed to appoint an independent consultant to assess the options and undertook a thorough selection process, considering four different consultants. In May Trustees appointed independent Trust consultant Mark Cassidy to look at all options and report back.
What were the Terms of Reference for the review of the options?
Mark Cassidy’s independent review had to take into account the following considerations.
The new Trust structure must:
- Be of a sufficient size to provide lower administrative costs through efficiencies gained from economies of scale
- Have the capability and capacity to continue to grow the fund over time
- Have the resources and skills to develop and administer effective granting programmes that continue to meet the current and future needs of the Porirua Community
- Have an effective governance and management team that can provide and implement both strategic and tactical leadership
- Ensure that the funds are safeguarded and continue to be exclusively for the benefit of the Porirua Community
- Have a transparent process for the appointment and retirement of Trustees that ensures that people with the right skills, diversity of background and knowledge of the community are appointed
- Have the legal powers, governance and management capabilities to administer a Sub Trust, solely for the benefit of the Porirua community
- Be prepared to establish a local group of community representatives as an advisory group to the Trustees to promote the fund and provide a “voice for the community” in the development and implementation of the granting strategy.
As well as this independent report a number of expert legal opinions have also been sought over the past year, providing guidance as to the best way to structure the future management of these community assets and protecting the Porirua community’s interests.
Why Nikau Foundation?
Mark Cassidy’s report indicated several key areas which identified a District Fund with Nikau Foundation as the best option for the future.
- Nikau Foundation has experienced, specialist committees with appropriate policies in place including:
- an Audit, Risk and Investments Committee
- a Grants Committee and
- a Governance Committee
- Nikau Foundation have four staff with significant experience across a range of disciplines
- Nikau Foundation has the capacity to grow over the coming years with a pipeline of significant committed bequests
- The growth of Nikau Foundation in recent years has enabled them to gain economies in administration costs
- Nikau Foundation is focused on strategic grant funding, with grants made for the benefit of the purposes of a particular fund (so a Porirua District Fund will have the purpose of benefitting the Porirua community)
- One of Nikau Foundation’s strategic goals is to grow philanthropy in the community, and this will include growing the size of the Porirua District Fund through attracting additional donations and bequests
What will the Nikau Porirua District Fund provide grants for?
Grants will be approved for a wide variety of organisations with charitable purposes and applications will be invited from registered charities, incorporated societies as well as other organisations.
There will be one grants round per year and there will be an annual grants event held in Porirua.
Grants may include:
- Capital expenditure
- Operating costs
- Programme costs
- Fundraising costs
- Travel and accommodation
Grants may not include:
- Activities which benefit an individual in a commercial sense
- Political parties
- Divisive religious activities
- Emergency relief, except where a major crisis affects the local community
- Activities outside the Porirua area, unless ancillary to primary Porirua benefits
- Retrospective project
Are Nikau Trustees paid?
No, Nikau Foundation Trustees are appointed to serve their community on a voluntary basis, as all Community Foundation Trustees around New Zealand are appointed. The Porirua District Fund committee will also be appointed on a voluntary basis, ensuring maximum returns to the community.
From 2019 it has been agreed that there will be a Porirua representative on the Nikau Foundation Board
What is a Community Foundation and how is it different to a Community Trust?
Nikau Foundation is a Community Foundation, and a member of Community Foundations of New Zealand, part of a global network. Community Foundations are the fastest growing form of local philanthropy in the world.
Community Foundations are different from a Community Trust. How? Quite simply Community Foundations are growing a pool of funding, essentially from the generosity of local people.
As well as inspiring generosity Community Foundations are increasingly looking after assets from dormant Trusts and those struggling with viability and compliance requirements, ensuring that the original purpose of the Trust continues.
As a local charitable Foundation they run a very lean and transparent model. They have to, for a very simple reason: it gives donors the confidence to give.
The Porirua District Fund with Nikau Foundation will be lean, transparent and give Porirua people the means to give back to their own community in a strategic way.
How will the Porirua District Fund Committee be appointed?
Current Trustees at the Porirua Community Trust are working through an appointment process to ensure wide and diverse community representation for the future. They are committed to ensuring that the District Fund committee can represent the communities that make up Porirua and have a good demographic mix.
Porirua Committee members will make recommendations to the Nikau Foundation Board. Committee members will not be paid, ensuring maximum returns to the community.
Announcements on how the appointment process will work will be made in the new year 2019.
Can Porirua community groups continue to apply for Trust House funding?
Yes! This decision does not affect Porirua Trust House Foundation funding, for which the Porirua Community Trust Trustees currently make recommendations. Community groups in Porirua should continue to apply directly through Trust House Foundation.