Succession planning with a twist

Originally published in the Waikato Business News, Tuesday 5 August 2025.

By David Christiansen, Executive Officer, Momentum Waikato.

At Momentum Waikato we grow endowment funds that provide perpetual support for local charities and communities, to realise our goal of ‘A better Waikato, for everyone, forever’.

‘Forever’ is quite a long time, and the ultimate long-term view when it comes to succession planning.

It is not just businesses, farms or families that need to plan beyond their current people’s lifetimes – incorporated societies and charitable trusts, sometimes decades old, often struggle to see how their mission can be continued into the future.

David Christiansen

Under the new Incorporated Societies Act passed in 2022, all existing incorporated societies must re-register by 5 April 2026. This comes with new requirements, which are generally reasonable, but may add more complexity and responsibility than some are willing to take on, such as new rules on dispute resolution and membership management.

If a society’s registration lapses next April, it will no longer be a legal entity, which will expose its committee and members to personal liability for its debts and other obligations, and possibly lose them control of its assets.

Faced with this, some societies’ committees may decide they cannot continue, especially if they are also facing other challenges such as a dwindling and ageing membership or rising operational costs.

These same challenges have also been affecting charitable trusts for some years. Similar law changes a decade ago requiring greater accountability by trustees prompted an uptick in the already growing flow of trusts closing down.

Whether it’s caused by increased legal responsibilities or a lack of successors, a committee disestablishing its trust or incorporated society needs to ask itself – how can its capital and other assets be used to continue its purpose after the legal entity is gone?

Answering that question is one of the key roles for community foundations like Momentum Waikato – through receiving trust and society transfers or ‘re-settlements’.

What happens is, through a Deed of Gift, the expiring organisation’s realised capital becomes a ‘community fund’ endowment at Momentum Waikato, which will grow its income and therefore grant-making capacity faster than the entity’s own previous investments, due to the scale of our total portfolio.

For a closing-down trust that has existed to make charitable grants, Momentum Waikato then simply continues that purpose.

For an incorporated society coming to an end, transferring its assets to open a new Fund at Momentum will generate perpetual income that can then be granted out for whatever charitable purpose the outgoing board chooses, such as maintaining the community infrastructure it created, or resourcing a similar group’s activity, or providing scholarships or other support to now-former members.

Therefore, if you are on a committee of a trust or society struggling to continue, Momentum Waikato can be your society or trust’s succession plan.

Momentum chair Neil Richardson at the launch of the Cambridge Endowment Fund. Photo: Mary Anne Gill.