• Charities registered as or seeking to be registered as a PBI.



  • Review your organisation’s activities, governance documents, publicly available information (website) policies, procedures, strategic and business plans, relationships with other organisations and agreements to ensure that it continues to meet the requirements of a PBI

The ACNC determines whether a charity qualifies as a public benevolent institution (PBI). This decision is then considered by the ATO in determining available tax concessions including entitlement to endorsement as a deductible gift recipient (DGR). The ACNC has published a Commissioner’s Interpretation Statement: Public Benevolent Institutions (CIS) setting out the factors the ACNC will consider when assessing an organisation’s eligibility as a PBI.

The CIS confirms the long understood criteria for a PBI. An organisation is benevolent if it is organised, promoted or conducted for the relief of poverty or distress (sickness, disability, destitution, suffering, misfortune or helplessness). The poverty or distress relieved must be ‘of such seriousness as to arouse community compassion and thus engender the provision of relief.’

Some of the more difficult issues relating to qualification as a PBI and some of the nuances associated with these issues are drawn out by the CIS.

Main purpose

An organisation must be able to demonstrate that its main purpose is benevolent, but it may have other purposes that are ancillary or incidental to its main benevolent purpose.

An example given in the CIS is an organisation whose main purpose is the advancement of religion which has activities which advance religion and also activities which provide benevolent relief may not qualify as a PBI. In comparison an organisation whose main purpose and activity is the direct relief of people in need which also has a minor purpose/activity of promoting religion may qualify.

How the relief needs to be delivered

Before the ACNC, the ATO assessed the eligibility of an organisation to be endorsed as a PBI. The ATO requirement was that an organisation had to itself provide direct benevolent relief to be a PBI.

The CIS states that provided the organisation’s activity is directed towards relieving a benevolent need, this can be achieved by the organisation:

  • itself directly giving or providing the benevolent relief;
  • providing the relief via, or in coordination with, related or associated entities;
  • providing some of its services by agents or contractors; or
  • funding another PBI.

The effect of this is that some organisations which were not previously able to qualify as a PBI will now be able to do so.

Can prevention provide relief?

The activity of the PBI must be targeted to relieving a need, for example poverty or distress.

One of the issues discussed in the CIS is to what extent does activity which is aimed at preventing a need from arising (for example, programs aimed at preventing ill health, poverty or distress) qualify as PBI activity.

At what point does the outcome of an activity get described as prevention and become too remote to be considered as providing relief. For example, compare suicide prevention which usually does qualify as a PBI activity to programs aimed at education about healthy eating habits to prevent obesity in the general community.

Preventative work must be targeted at people in need as opposed to the community at large and it must actually provide relief to the needy otherwise it will be considered to be too remote.

Operating overseas

An organisation established and operated in Australia which provides benevolent relief to people in need in an overseas country may by endorsed by the ACNC as a PBI.

The ACNC requires charities that operate overseas to demonstrate how risks such as the misuse of funds provided will be monitored and managed to ensure compliance with the ACNC Governance Standards.

Importantly, even if the ACNC registers an organisation as a PBI, this does not automatically entitle that organisation to be endorsed by the ATO as a DGR. It is therefore possible that an organisation which does not meet the ATO ‘in Australia test’ could be registered with the ACNC as a PBI but not the ATO, meaning it would not be a DGR. Therefore, depending on activity and ability to comply with the ‘in Australia test’ it may still be better for some organisations to apply for endorsement as an overseas aid agency rather than a PBI.