A public benevolent institution (PBI) is a type of charity that identifies its main purpose as the relief of poverty, sickness, suffering or disability for a group of people in need. It’s a particularly popular charitable subtype because, if a charity is endorsed as a PBI, it automatically obtains deductible gift receipt (DGR) status, allowing it to receive tax deductible gifts – with most subtypes this is a two-step process.
To become a PBI, a charity must provide evidence of the benevolent relief it provides and identify the group of people in need that its activities assist (PBIs cannot assist the general public).
Global Citizen case
The recent case of Global Citizen Ltd v Commissioner of the Australian Charities and Not-for-profits Commission considered if political lobbying and other activities ‘incidental’ to a charity’s benevolent purpose (eg education and advocacy work) could prevent a charity from becoming a PBI. Global Citizen is a global charity that seeks to end extreme poverty by 2030 via the UN’s Sustainable Development Goals. It engages in education of the public, government agency staff and politicians and lobbying for policy change.
Global Citizen was refused PBI status by the ACNC because it undertakes political advocacy work, arguing that Global Citizen’s educational and advocacy work does not directly provide relief to people in need.
The AAT decided that Global Citizen is a PBI and gave us these key takeaways.
- A PBI doesn’t need to have exclusively benevolent activities but benevolent relief needs to be your main purpose.
- A PBI can provide benevolent relief indirectly (along with directly).
- A PBI can engage with the political process and governments but it’s still undetermined if advocating for policy change alone is sufficient to ‘relieve poverty’.
- What constitutes a PBI should depend on the ordinary understanding at the time, meaning the concept should evolve and modernise.
For many PBIs, pursuing meaningful change requires policy changes, advocacy work and partnerships with governmental and non-governmental organisations. We think the definition of a PBI should be modernised to contemplate the broad scope of activities charities can and should pursue, in support of their ultimate benevolent purpose. In the wake of this decision, the ACNC has promised to give more detailed guidance on how it will define PBIs, so watch this space!