Public Benevolent institutions and the ACNC

Do you want to register your organisation as a charity with the ACNC? If so, you may encounter the term ‘public benevolent institution’. In this insight, we digress into what a PBI is and provide some useful examples of PBIs that operate.

What is a Public Benevolent Institution?

A public benevolent institution (PBI) is one of the categories or ‘subtypes’ of a charity that can register with the Australian Charities and Not-for-profits Commission (ACNC). Public benevolent institutions can apply for charity tax concessions and may be eligible to be endorsed as deductible gift recipients (DGRs) by the Australian Tax Office.

A PBI is a charitable institution whose primary focus is to relieve poverty, sickness, suffering or disability.

Accordingly, a PBI must be:

  • ‘Public’;
  • Benevolent; and
  • An institution.

Definitions:

‘Public’

The ACNC has expressed the view that generally to be public requires: the recipient of public funds, public control and accountability and/or connection with government.

The ACNC has expressed the view that an entity with three or more responsible persons that are unrelated to each other and that have a degree of responsibility in the community, are more likely to demonstrate the criterion of “public control and accountability”. By contrast, an entity with one or two responsible persons is less likely to do so. The latter entity may still be “public” for PBI purposes if it demonstrates the other criteria – receipt of public funds, connection with government, and especially if it demonstrates the main criterion, that the entity benefits an extensive class of individuals.

‘Benevolent’

A PBI is benevolent if it is working for the relief of poverty or distress (such as sickness, disability, destitution, suffering, misfortune or helplessness).

The degree (level) of distress is also important and your charity only meets the definition if its purposes try to meet a need that is:

  • significant enough (and the circumstances difficult enough) to arouse compassion in people in the community
  • beyond the suffering experienced as part of ordinary daily life, and
  • concrete enough – aimed at helping people who are recognisably in need of benevolence

Provided a charity’s main purpose is benevolent, it can also have other non-benevolent purposes that are incidental.

Examples of organisations that may be PBIs:

  • Disability service organisations.
  • Organisations providing crisis accommodations to people experiencing homelessness.
  • Not-for-profit aged care facilities.
  • Not-for-profit hospitals and hospices.
  • Not-for-profit community legal services targeted at relieving needs such as poverty.
  • Organisations that are part of a global international aid and development network, which primarily raise funds in Australia.

Examples of organisations that are unlikely to be PBIs:

  • Animal welfare societies
  • Marriage guidance and marriage counselling organisations
  • Religious organisations
  • Youth or social clubs

The unique circumstances of each organisation will be considered in determining whether it is best suitable for PBI status. You need to make your charities purposes and activities reflect the definition of providing benevolent relied as well as showing that you do assist a section of the community.

Choosing which category to apply for as charity can be overwhelming. The team at Warlows Legal can assist you with all your charity needs and provide your charity with on-going legal assistance.

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