21. Sports Charities

 If you think the information on this blog is useful, please click on the advertisements on this webpage (at the right) before you leave.  If you really like the blog you can click multiple times!  Every ad click – which earns me about 14 cents - helps pay for the late night coffees I went through writing it and is much appreciated J .  You can also check out the CharityWatchNZ contents page if you want quick access to all my charity blog topics. 

Introduction

The NZ charities register currently has over 6,000 charities that operate in the “sport / recreation” sector.  Approximately 1,700 of these charities, representing 6% of all NZ registered charities, have recorded “sport / recreation” as their main sector of operation.  They range from golf clubs (with fees exceeding $5,000) to bridge and chess clubs, sports stadiums and marinas.  This approach differs markedly from the charity regulator across the Tasman, which has only registered 175 charities with sports as a main activity.

The question of whether sports activities are charitable is both complex and controversial.  In February 2015 the NZ Herald published an editorial “Charity status of sports good for all parties” which raised concerns the NZ charity regulator could be about to deregister hundreds of sporting bodies that promote elite athletes or a sport “as an end in itself”.  Loss of charitable status could mean the loss of funding from some philanthropic trusts and gaming machine societies.    

The NZ Charities Act 2005 was amended in 2012 to clarify that although the promotion of amateur sport is not a charitable object of itself, it may be charitable if it is the means by which another charitable purpose is pursued. The regulator subsequently published guidance “When are sport and recreation organisations charitable?”   To meet the public benefit test, it explained that sporting charities must be directed towards amateur sports and not to professional or elite sporting; it states that a sports club must not have exclusive membership or high fees, the sport must not be excessively dangerous and the club must not focus on social activities.  The guidance also states that promotion of sport in and of itself is not a charitable purpose – it must be the means by which a charitable purpose is pursued, for example to advance education or promote health. 

One of the hottest sporting charity topics in NZ at present involves governing sports bodies.  As recently as September 2015 the charities regulator published its decision to deregister the NZ Rowing Association Incorporated.  The Charities Registration Board acknowledged that NZ Rowing had purposes to promote rowing as a means of promoting public health and advancing education.  However it also found it had a purpose of promoting rowing as an end in itself (ie it was a sports promotor / governing body) and it had a purpose to promote success in rowing at an elite level, both being non-charitable purposes.  The reasons for this decision were consistent with the reasons for deregistering Swimming NZ Incorporated in September 2014.

It is worth noting that many sports clubs in NZ are exempt from income tax under a specific amateur sports body provision of the Income Tax Act 2007.  For these clubs, registration as a charity will not bring additional income tax exemption benefits.  Section CW 46 of the Income Tax Act 2007 provides an income tax exemption if clubs are established mainly to promote any amateur game or sport, for the recreation or entertainment of the general public.  Consequently there are many incorporated sports clubs that have decided not to register as charities and instead file annual incorporated society returns with the Companies Office, which are publicly available on the Companies Office Other Registers webpage.  This means analysis of sports club information on the Charities register will not provide a comprehensive picture of all sports clubs in NZ.

Despite the abovementioned limitation, the purpose of this paper is to sift through data on the Charities Register and identify lessons that may be useful for sports organisations that are, have been or may be registered charities.

Summary

Based on my analysis of information contained on the NZ and Australian charities registers, here are eight insights about sporting charities:

1. What types of sports groups register as charities?  Although you might have expected rugby and netball clubs to dominate the types of sports on the NZ charity register, in fact golf clubs top the list, followed by tennis clubs, rugby, surf lifesaving, cricket and cycling.  However the assortment of sports charities is very wide, with well over 40 types of sports appearing such as bridge, chess, skiing, yachting, equestrian, croquet, water polo, judo and marching.  There are a number of stadiums and even marinas.
 

2. Is the number of sports charities increasing or decreasing?    Just over 2,000 charities with sport/recreation as their main sector have been registered since 2007 and 325 (16%) of these have been deregistered.  One third of these deregistrations were voluntary and two thirds were initiated by the regulator, almost all because of failure to file annual returns.  2015 (January to October) is the first year the number of sports charities declined overall, with 62 new registrations but 88 deregistrations.

3. What is the preferred legal structure for a sports charity? 64% (1,118) of sports charities are incorporated societies, which is the preferred structure for sports charities.  30% (523) are trusts, 1% (22) are limited liability companies and 5% (94) are unincorporated or do not specify their structure.

4. How do sports charities earn most of their money? 55% of sports charities earned trading or service provision income in 2014, which brought in $131m.  This makes up one third of sports charity income by dollar value.  Sales of wine, food and sports clothing is common for small, medium and large sports charities.  So is renting out venues, hiring gear, and charging for advertising.  Service provision includes income from gate takings, rep team fees, league fees and tournament fees.

5. Are donations from the public very common for sports charities?  The raw data suggests that in 2014 just over half (51%) of sports charities received donations, which brought in $19m.  If this was accurate, it would confirm the benefit of donee status awarded to most charities, where sports clubs can provide donors with donation tax credit receipts.  However on closer examination most of this money was from government and non-government grants that the charities had mistakenly classified as donations.  The grant sources were what you would expect, for example various community trusts, the Lion Foundation, First Sovereign Trust, NZ Lotteries, Councils and Pub Charity.  Donations from individuals or businesses were much harder to find.  Three themes that stood out were: (i) people would donate for recreation reserves and parks; (ii) they would donate to a charity they settled themselves; and (iii) they would donate if the sports charity was linked to another organisation they were involved with (for example, to a charitable foundation that funded a sports club).

6. Many sports clubs have decided not to register as a charity – so is it worth it?  Using golf clubs as an example, only one quarter of  NZ’s 384 golf clubs that are incorporated societies decided to register as charities.  The rest did not.  Instead they continue to file annual incorporated society returns with the Companies Office and still benefit from the amateur sport tax exemption under section CW 46 of the Income Tax Act.  They also avoid the red tape of having to inform two regulators – DIA and the Companies Office – when members or governing documents change, and they will not be required to apply the new accounting standards for charities.  The lesson for all sports charities is therefore to make sure registration as a charity brings tangible benefits (such as access to new sources of funding).  If it doesn’t, then registration as a charity may not be worthwhile.

7. Is the NZ regulator’s approach to sports groups different to the Australian regulator?  Like NZ, Australia does not recognise amateur sport to be a charitable object in itself - an organisation’s sporting activities must be part of achieving a recognised charitable purpose in order for the organisation to be charitable.  Despite this similarity, there is a marked difference between NZ and Australia in respect of registering sports bodies as charities.  Very few (less than half a percent) of Australian registered charities record sport as a main activity, compared to 6% in NZ.  And almost all of those sports groups in Australia are directly involved with sickness or disability, which aligns with guidance published by the Australian Tax Office about the limited circumstances when a sports organisation will be charitable.  This is far different to NZ which has registered many ordinary sports clubs. The conclusions I have drawn are that more sports clubs in NZ than Australia have identified benefits from being a charity (for example, if certain funders will only provide money to registered charities) and therefore more applied to register, and / or the NZ regulator has taken a more liberal interpretation about whether sporting activities achieve other charitable purposes.

8. Do most sports charities pay staff or just rely on volunteers?  Just over half of the sports charities in 2014 had no paid staff and relied solely on volunteers.  If you are a typical charity in that category you will probably have about 11 volunteers and a gross income around $60,000. However the larger you get the more likely you are to have at least part time employees – one third of sports charities incurred salary expenses in 2014.  If you only have paid staff and no volunteers at all you are more likely to be a governing body or a significant charity such as a sports stadium, with income averaging $1.7 million.

The details
1. Registration and income trends

The total number of registered sports charities that have ‘sport/recreation’ as their main sector has increased every year since 2009, as shown in Graph 1 below.  However, there has been a reduction in the number of returns filed in 2014, largely due to an increase in 2014 delinquent filers.

The trend in gross income reported by sports charities has been consistent with the trend in volume of sports charities that have filed returns over the last six years.  It has grown from $268m in 2009 to a high of $437m in 2012, and fallen to $415m in 2014. 

Graph 1

 

Table A shows a year-by-year breakdown of sports charities registered and deregistered, distinguishing the deregistered charities by voluntary deregistrations and deregistrations initiated by the regulator.

From 2007 to 2015 the regulator registered 2,082 charities with sport / recreation as the main sector. 

Over the same period, 16% or 325 have been deregistered, leaving a net total of 1,757 currently on the register (as at October 2015).  From 2007, an average of one third of deregistrations were voluntary and two thirds were initiated by the regulator, the latter being largely due to failure to file the annual return.  The number of regulator deregistrations increased significantly in 2015, which appears to be due to an increased focus on deregistering charities that have not filed their annual returns, rather than a focus on whether sports charities have a charitable purpose.  So far this 2015 calendar year, 84% of sports charity deregistrations were initiated by the regulator.

Table A

 

2. Types of sports clubs on the register

Sports charities are not required to categorise their sporting activity on the NZ Charities Register so for the purpose of this paper I filtered the names of the charities that have recorded “sport / recreation” as a sector they operate in, looking for common sports words.  The result in Table B, showing the 30 most common sports charities, is not comprehensive, but gives an indication of the types of sporting activity that has been registered.  

Table B

No. of charities	Word in Name	No. of charities	Word in Name
85	Golf	20	Squash (excluding squash and tennis, which are included in tennis)
80	Tennis	17	Skiing
76	Rugby	17	Tramping
73	Surf Life Saving	16	Badminton
53	Cricket	15	Canoe
51	Biking / Cycling	14	Yacht
51	Swimming	11	Alpine (excluding ski)
50	Football / Soccer (excluding rugby football, which are included under Rugby)	11	Equestrian
47	Bowling	10	Baseball / Softball
45	Hockey	10	Croquet (excluding croquet and bowling, which are included in bowling)
35	Rowing	10	Deerstalkers
33	Netball	8	Boxing
33	Bridge	8	Dancing
30	Gym sports / Gymnastics	7	Harrier
28	Basketball	7	Chess

In addition to these sport-specific charities, there are 16 charities with “stadium” in their names, and 4 with “marina” (Orakei, Whangarei, Tutukaka and Whangaroa).  Many of the remaining charities could be associated more with recreation rather than sport per se (for example 232 had “centre” in their name, ranging from recreation and craft centres to seniors centres), or a range of sports (there were a large number of trusts and organisation names that were solely or primarily sports related, but the name gave no indication of the sports involved).

3. Sources of income

The source of income reported by charities with ‘sport/recreation’ as their main sector is dominated by “income from service provision / trading operations”, with an average of one third of gross income from that source over the last six years.  This is followed by income from “government grants / contracts” (19%), “all other grants and sponsorship” (19%) and “membership fees” (11%).  Donations to sport/recreation groups accounted for only 4% of gross income.  Not surprisingly, bequests were the least common source of income, with only 20 charities out of 1,505 reporting bequest income in 2014.  The six-year average breakdown is shown in Graph 2.

Graph 2

4. The “top 10” charities (based on income)

As shown in Table C, below, three sport/recreation charities reported gross income of more than $10m in 2014 – the Auckland YMCA, Wellington Regional Stadium Trust and The Home of Cycling Charitable Trust.  The charity ranked fourth on the list, the NZ Rowing Association, was deregistered in September 2015 on the basis that it had non-charitable purposes (ie sports promotion at an elite level).  Wellington Zoo featured in the top 10 because it classified its main sector as recreation (Auckland Zoo did not appear because it classified its main sector as “environment / conservation”).

Table C

	Top 10 Sport/Recreation Charities ranked by 2014 Gross Income	$m
1	Young Men's Christian Association Of Auckland Incorporated	19
2	The Wellington Regional Stadium Trust Incorporated	16
3	The Home Of Cycling Charitable Trust	11
4	New Zealand Rowing Association Incorporated	9
5	Southland Indoor Leisure Centre Charitable Trust	8
6	Auckland Sport	8
7	Millennium Institute of Sport and Health	7
8	Tennis Auckland Region Incorporated	6
9	Sport Northland	6
10	Wellington Zoo Trust	6

5. Sources of income from “Service Provision / Trading Operations”

825 out of 1,505 sport/recreation charities (55%) reported income from “service provision / trading operations” in 2014, which was the largest source of income by dollar value ($131m).  Sports stadiums ranked high on the list with three (Wellington, Christchurch and Marlborough) in the top 10, as shown in Table D. 

Table D

	Top 10 Sport/Recreation Charities ranked by 2014 Service Provision / Trading Income	$m
1	The Wellington Regional Stadium Trust Incorporated	16
2	Young Men's Christian Association Of Auckland Incorporated	11
3	The Manukau Counties Community Facilities Charitable Trust	6
4	Mana Community Grants Foundation	5
5	Millennium Institute of Sport and Health	3
6	Christchurch Stadium Trust	3
7	Wellington Zoo Trust	3
8	Remuera Golf Club Incorporated	2
9	New Zealand Water Polo Association Incorporated	2
10	Marlborough Stadium Trust	2

To get an insight into the nature of the service provision / trading income of small/medium charities, I reviewed the financial accounts for 30 charities which disclosed this type of income in 2014, ranging from $5,000 to $200,000.  Here is what I found:

·        Sales of wine, food and sports clothing is a common way for sports charities to make money.  At the small end some charities buy wine and sell it, they take a fee from food vendors, or members will volunteer for bar work and donate proceeds to the charity.  They also sell uniforms, sports gear or t-shirts to members. As they get bigger, charities run their own bars, canteens and clothing pro-shops.

·        Renting or hiring space or gear is a common income source.  Smaller charities rent their rooms when they are not using them; a bowling club hired out its turf maintenance gear to other clubs.  Bigger charities hire out their gyms, halls or turf.  Venue hire is a source of income for the stadiums.

·        Advertising income can be lucrative for some charities, ranging from signage to website placement.

·        Small charities recorded income from the sale of calendars, cards and stamps.  

·        Charities with a sport oversight/promotion role tended to earn trading income from gate takings, rep team fees league fees and tournament fees.

·        The most unusual source of trading income in the sample was a bowling club recording income from the sale of bonds.

6. Membership fees and donations

Membership fees are often a modest but important source of income for sports charities.  They can also be problematic if the charities regulator believes they are set so high that an organisation is exclusive and does not meet the public benefit test.  Similarly, problems may occur if a charity categorises its membership fees as donations and draws the attention of Inland Revenue, who will want to ensure donation tax credits are not claimed if the amount paid results in membership benefits.  From a practical perspective, deciding whether an amount received should be classified as a donation or a grant in the charity regulator’s annual return is clearly also difficult for many charities, with no consistency in the approach (based on my sample).

906 out of 1,505 sport/recreation charities (60%) reported income from membership fees in 2014, which brought in $48m.  A smaller number, 762 (51%) reported income from donations, which brought in $19m.  Golf clubs ranked high on the membership fee list with three (NZ Golf Incorporated, Remuera Golf Club, Christchurch Golf Club) in the top 10, as shown in Table E.   A foundation linked to the Royal Wellington Golf Club also made it into the top 10 for donations, as shown in Table F.

Table E

	Top 10 Sport/Recreation Charities ranked by 2014 Membership Fees	$m
1	Young Men's Christian Association Of Auckland Incorporated	5
2	New Zealand Golf Incorporated	3
3	Millennium Institute of Sport and Health	2
4	Remuera Golf Club Incorporated	2
5	Young Men's Christian Association Of Taranaki Incorporated	2
6	The Scout Association of New Zealand	1
7	Tri Star Gymnastic Club Incorporated	0.8
8	Sport Northland	0.7
9	Christchurch Golf Club Incorporated	0.7
10	Pakuranga Country Club Incorporated	0.7

Table F

	Top 10 Sport/Recreation Charities ranked by 2014 Donations	$m
1	Southland Indoor Leisure Centre Charitable Trust	4
2	Tai Shan Foundation	4
3	The Bruce Pulman Park Trust	3
4	RWGC Golf Foundation	1
5	Sport Bay Of Plenty Charitable Trust Board Incorporated	1
6	SPIRIT OF ADVENTURE TRUST	1
7	Akarana Marine Sports Charitable Trust	1
8	Bay Oval Trust	0.3
9	The Te Mata Park Trust Board	0.2
10	Fiordland Community Swimming Pool Association Incorporated	0.2

 To get an insight into the type of people and organisations who donate to sports and recreation charities, I reviewed the financial accounts for the above 10 entities.  Here is what I found:

·        The Southland Indoor Leisure Centre financial statements show the donation income is actually the total of six grants from various councils.  It appears to be a misclassification and would have been more appropriately classified as government grants.

·        The Tai Shan Foundation received its donation of $3,525,000 from its trustee Frank Pearson, who also donated $1.9m in 2013.   The foundation appears to have been set up by Mr Pearson, an investment banker and the former head of BNZ, in 1985 with the purpose of encouraging and promoting social equity and harmony in NZ.  The charity has accumulated funds of $7m and in 2014 made donations itself of $63,410.

·        The Bruce Pulman Park Trust financial accounts record the $3,009,037 figure as “Donations and Grants Received” and disclosed all four payers – Manukau Counties Community Facilities Charitable Trust, ASB Community Trust, Counties Manukau Sports Foundation and Probus.

·        The RWGC Golf Foundation provided a one page extract of its 2014 financial accounts and an audit report.  It recorded 2014 donation income of $839,000 ($1.2m in 2013) which, according to past accounts, is all received from members of the Royal Wellington Golf Club.  The accounts show that almost all of the charity’s assets ($3,933,000 out of $3,951,000) are represented by a loan to the Royal Wellington Golf Club.   The accounts state the objects of the Trust are to promote the game of golf with particular reference to the golf courses operated by the Royal Wellington Golf Club.  The latter is not a registered charity which may be because it would not qualify due to its relatively high fees and exclusive nature (the website shows its annual fee for full playing members is $2,250).   This structure would appear to be a way for sports club members to claim donation tax credits for “donations” to a foundation that ultimately funds their own non-charitable sports clubs.

·        Sport Bay of Plenty Charitable Trust disclosed its $741,902 donations were made by six charitable organisations – Rotorua Energy Charitable Trust, NZ Community Trust, BayTrust, Lion Foundation, First Sovereign and Tauranga Energy Consumer Trust.

·        The Spirit of Adventure Trust did not disclose the source of its $517,372 donations in its 2014 financial report.  However it has a full list of its major and supporting contributors (without amounts) on its website which include the Ministry of Youth Development, NZ Community Trust, Pub Charity, The Lion Foundation, and the Community Organisation Grants Scheme.

·        Akarana Marine Sports Charitable trust’s 2014 financial accounts show that its only income was from $499,943 donations.  The charity began in late 2012 so is relatively new and raising funds to build the $12m Hyundai Marine Sports Centre, as reported in the media on 22/06/2015.  It did not disclose the source of donations apart from noting $7,643 was from the Royal Akarana Yacht Club, a related party as the trustees are members of the yacht club’s committee (the club donated $174,332 the previous year).  The Royal Akarana Yacht Club is not a registered charity, however its website says it receives funding from The Lion Foundation, NZ Community Trusts, Four Winds Foundation Ltd and the Trillian Trust.

·        The Bay Oval Trust’s purposes are to promote and facilitate cricket in the Bay of Plenty.  Its financial statements provide names of its 11 donors for $281,688 donations.  They are mostly individuals and private businesses, some of which are explained further in a related party note.  This charity also reported receiving grants of $1.4m, which it (correctly) classified as grants rather than donations. It listed their source – NZ Community Trust, Lion Foundation, First Sovereign Trust, NZ Racing Board, NZ Lotteries, TECT, Tauranga City Council and Pub Charity.

·        The Te Mata Park Trust Board disclosed the names of five donors, with the sixth donor of $25,000 being anonymous. Two donors were linked to tramping (the charity owns 95 hectares of land in Hawke’s Bay including Te Mata Peak).

·        The Fiordland Community Swimming Pool Assn disclosed $214,495 donations but did not provide any further information in its financial accounts.  However, the vice president was quoted in the media on 11/10/2013 saying that donations for the pool’s structural repairs were received from Lotteries, Community Trust of Southland, Kepler Challenge, Te Anau Community Board and Southland District Council.

7. A close look at golf clubs

In 2014, 65 golf charities filed annual returns with the regulator (there are approximately 85 golf charities registered in total).  The number which filed returns is approximately the same number of Inland Revenue approved donee organisations with 'golf' in their name (64)).  These charities controlled assets valued at $136m and recorded gross income of $27m which included membership fees of $12m.  They recorded 658 volunteers, 156 full time and 96 part time employees (total salaries/wages were $8m). 

The 14 most significant golf charities, either by virtue of their asset size, gross income size, or membership income, are listed in Table G below, along with an indication of their annual membership fee if available on their website.  It would be interesting to know whether the regulator has considered if any of these fees are significantly “high” to fail the public benefit test.

Table G

As mentioned earlier in this paper, amateur sports clubs such as golf clubs do not need to register as a charity to obtain an income tax exemption.  The Incorporated Society Register, maintained by the Companies Office, currently shows 384 active registered golf clubs.  This indicates approximately 300 or three quarters of all golf clubs made the decision not to register as charities, and instead they only file incorporated society annual returns with the Companies Office.

8. Volunteers and paid staff

The number of volunteers and employees assisting sports charities in 2014 is shown in Graph 3 below.  In total there were 32,517 volunteers, 1,550 full time staff and 2,504 part time staff.  501 of the 1,505 charities (33%) paid salaries which totalled $108 million.  The largest salary expense by far was $11 million paid by the YMCA of Auckland, followed by the Wellington Zoo which paid $4 million.

53% of sports charities relied solely on volunteers, with 11 volunteers being the average for this group and $63,000 being the average gross income of the charity. Six of these charities reported having over 100 volunteers – five being football/rugby clubs and the sixth was the Canterbury Sheep Exhibitors and Breeders A&P Association.  In contrast, 75 charities in this group reported just one volunteer and most had income under $10,000.

 30% of sports charities relied on both volunteers and paid staff, with an average of 52 volunteers (the Scout Association of NZ and the Auckland Netball Centre both recorded over 5,000 volunteers; if they were excluded, the average number of volunteers would be 28).  The average full time and part time staff were 3 and 5 respectively and the average gross income of the charities was $472,000.

12% of sports charities reported having no employees or volunteers at all.  That may be true for the trusts – which accounted for over half of the 12%.  However one third may just not have answered the question (they received income so are likely to have drawn on at least some volunteer or paid resource). 

5% of sports charities relied solely on paid staff, with 5 full time and 5 part time staff being the average for this group and $1.7m being the average gross income.  These charities included stadiums and governing bodies such as the NZ Rowing Association (now deregistered), NZ Golf, Basketball NZ, Tennis NZ, The Home of Cycling, Auckland Sport, Sport Southland, etc.

Graph 3

9. The approach across the Tasman

The Australian Charities and Not-for-profits Commission (ACNC) began to regulate charities from 3 December 2012.  Approximately 56,000 charity records were transferred from the Australian Tax Office at that time and from that point the ACNC began to register new charities.  2,558 new charities were registered in the year ending 30 June 2015 according to its recent 2015-2018 Strategic Plan. At the time of writing this paper there were 54,185 charities on the register, a reduced number because the ACNC also revoked registration of charities that no longer operate or did not comply with their reporting obligations. 

The ACNC issued a factsheet for sporting groups in July 2015 which explains that generally sporting clubs do not meet the legal meaning of charity unless the sporting activities are part of achieving a recognised charitable purpose such as advancing education or social or public welfare.   This approach is consistent with the ATO’s previous interpretation (refer to the ATO’s 2011 Decision Impact Statement for Bicycle Victoria vs Commissioner of Taxation where the Tribunal found that promoting cycling for the purpose of promoting fitness was a charitable purpose).  The ATO’s exemption checklist for sporting organisations  reiterates that the vast majority of sporting clubs are not charities.  It cites three examples where sports clubs are charities:

·        a club wholly integrated in a school or university and furthering its educational aims

·        a club that primarily uses a game or sport to help rehabilitate the sick, and

·        a club that primarily uses a game or sport to relieve disability.

In their Annual Information Statements (AISs), each charity must record the type of activities they undertook in the previous year.  Sport is an activity category.  Based on the 2013 AIS data, 1,434 out of 49,010 charities which filed an AIS conducted sporting activities (3%).  However only 175 charities identified sport as their main activity (0.4%), far less than the 1,700 (6%) that identified “sport / recreation” as their main sector in New Zealand.  Surf lifesaving clubs accounted for 31 of these charities.  Almost all of the remainder made it clear that sports were associated with sickness or disability.  For example, Australian Rules Football for people with intellectual disabilities; running for vision impaired people; horse riding for disabled people; sports for deaf people; equestrian for people with disabilities; blind bowlers, dragon boat racing for cancer sufferers, etc.  General sporting organisations such as golf clubs are not registered charities in Australia.

Similar to New Zealand, Australian not-for-profit sports clubs are exempt from income tax, as explained in the ATO’s exemption checklist for sporting organisations.  So there are no income tax advantages for them to register as charities.  However as the ATO points out, if a sports club qualifies as a charity it must register as a charity because it will no longer be eligible for the general sports organisation income tax exemption (which is not the case in NZ). 

If the ACNC registers charities as a Public Benevolent Institution (PBI) or Health Promotion Charity (HPC), they will generally receive additional GST, Fringe Benefit Tax and Deductible Gift Recipient (DGR) tax benefits.  Out of the 175 charities with sports as a main activity, approximately 89 are approved PBIs and 6 are approved HPCs.  There may be other reasons for sports clubs to seek charity registration in Australia, for example the tax office requires some organisations to be registered charities before approving donations to them to be tax deductible (ie approving DGR status). 

Data references

Data for this paper was extracted from the New Zealand and Australia charity registers between 13 and 28 October 2015.  The Australian data was made available to data.gov.au on 4 October 2015.

Disclosure

My contract as the Director of Compliance and Reporting at the Australian Charities and Not-for-profits Commission ended in August 2015.   The above analysis does not take into account any protected information obtained during my time at the ACNC.  Any errors are mine and opinions do not represent the views of my previous employers.

Further reference
You can find more data about charities on the following sites:
www.data.gov.au
www.charities.govt.nz
You can also follow my regular data insights about charities on twitter at
https://twitter.com/StuDonaldsonNZ

You can find more information about NZ sports charity issues at:

Sport NZ:  “Charitable registration for sport and recreation organisations - update December 2014”
NZ Law Society: “Is sport charitable any more?” 10 April 2015 (Maria Clarke)