Brethren-run charities under investigation over $300m farmland assets

A network of Open Brethren-run charities, valued at over $300 million in farmland, is under investigation by the Charities Service. The scrutiny follows complaints that the tax-free status of these organizations grants them an unfair competitive advantage. The investigation centers on Trinity Lands, a dairy and kiwifruit conglomerate primarily based in the Waikato.

The inquiry was sparked by a detailed five-page anonymous letter in 2015. It raised concerns about the financial operations of a network of registered charities, limited partnerships, and companies. These entities are linked to Trinity Lands, which has grown into a significant agricultural enterprise.

Gray Baldwin, a trustee of Trinity and chairman of the shareholding charity Longview Trust, expressed willingness to cooperate with the investigation. He acknowledged the privilege of operating tax-free and emphasized the importance of demonstrating value to wider society.

Trinity controls a dairy herd nearing 12,000, hundreds of hectares of forests, and orchards that produced over a million trays of kiwifruit in the previous year. The charitable company was formed in 2012 through the merger of three trusts established decades ago by Open Brethren members to “farm for God.” These trusts aim to advance the Christian religion and support causes such as Bible colleges and Christian school camps.

Peter McBride, who runs Trinity, has become a notable figure in New Zealand’s kiwifruit industry. He is the largest shareholder in Zespri and has served as chairman of the kiwifruit marketer since 2012. A review of Trinity’s financial statements, along with those of its shareholder Lichfield Land and the Hillview and Longview trusts, revealed tax-free profits of $21.6 million between 2012 and 2016.

These profits were partly distributed to charitable shareholders ($10.25 million) and then allocated to various causes or directly donated ($2.5 million) for purposes such as an ambulance for the South Waikato. Reinvesting the remainder of its profits, along with an appreciation in farmland value, increased Trinity’s net assets from $100 million to $174 million during that period.

McBride stated that Trinity’s policy is to reinvest half of its profits and distribute the remainder. He described this approach as prudent commercial practice, reflecting the agribusiness environment they operate in. He also noted that the 2017 financial year faced difficult trading conditions, resulting in a loss, but Trinity took on more debt to ensure its shareholding continued.

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