Important - On 13 June 2014 the full Federal Court handed down its decision in Commissioner of Taxation v Hunger Project Australia  FCAF 69. This affirmed the decision in the first instance by a single judge of the Federal Court in The Hunger Project v Commissioner of Taxation  FCA 693. This factsheet has been updated to reflect the law as explained in the Full Court decision. For more information, read the Commissioner's Interpretation Statement: The Hunger Project case.
Factsheet: Public benevolent institutions and the ACNC
A public benevolent institution (PBI) is one of the categories or ‘subtypes’ of 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 (ATO).
Important - If you want your organisation to be endorsed as a DGR under the public benevolent institution category, your charity must first be registered as a charity with the subtype of ‘public benevolent institution’ with the ACNC and satisfy other requirements of the ATO.
Find out more about registering with the ACNC and applying for DGR status.
This factsheet explains what a public benevolent institution is. It sets out the key characteristics, but your organisation may have other characteristics that may still make it a public benevolent institution. Some of the words used may seem old-fashioned, but they are still used in charity law, which has developed over hundreds of years. We have tried to explain them.
What is a public benevolent institution?
A public benevolent institution is a type of charitable institution whose main purpose is to relieve poverty or distress.
Public benevolent institutions are recognised by the ACNC and ATO as a subtype of charity.
Is my charity a public benevolent institution?
Your charity may be a public benevolent institution if it:
- meets the legal meaning of charity
- is an institution that has benevolent relief as its main purpose, and that relief is provided to people in need.
What is an institution?
An institution is an establishment, organisation or association, that exists to promote some object, especially objects of public utility, or religious, charitable or educational objects.
To be an institution your charity must not be merely a fund. It must do more than just distribute funds to other organisations or individuals, or simply make property available for others (as a fund may do). It must have its own activities, engage others to undertake activities on its behalf or be part of a relationship of collaboration (such as being part of a structure of organisations) that is organised and conducted for or promotes benevolent relief (see below).
Your charity may need to have a separately identifiable structure to be an institution, but it does not need to have a particular legal structure to fit the definition. However, its size and permanence are also relevant to whether your charity is an institution.
What is a 'main purpose of benevolent relief'?
Benevolent relief includes 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 (see below).
The purpose does not have to be to relieve financial hardship or need caused by poverty, but can relieve other needs. For example, a charity that provides counselling services to people traumatised by a natural disaster, or one that provides education and activities to disadvantaged young people to help them gain skills in life may be a public benevolent institution.
As long as a charity's main purpose is benevolent, it can also have other non-benevolent purposes that are incidental.
Does my charity have to provide benevolent relief directly?
Your charity does not have to provide material help directly to those in need. Public benevolent institutions can engage others to undertake activities on its behalf or be part of a relationship of collaboration (such as within a structure of related organisations with shared objects) that is organised, conducted for or promotes benevolent relief.
For example, your charity may still be a public benevolent institution even if its principal (main) activity is raising funds that are used to provide benevolent relief, rather than directly providing the relief itself. On the other hand, if your charity is a fund that provides monies to different charities from time to time and some of these charities happen to have purposes of providing benevolent relief, this is unlikely to be sufficient.
To show that your charity is still a public benevolent institution if it does not directly provide the material help, you need evidence that the activities your charity does undertake are still organised and conducted for the purpose of relieving the poverty or distress of people in need. For example, you may provide details how your charity’s funds are directly channelled to programs that provide benevolent relief, through a collaborative arrangement with another organisation that delivers those programs. Your charity may also provide other support in collaboration within a network of organisations that all share a purpose of relieving poverty or distress, such as sharing strategic planning, administrative or professional services support.
Who does my charity have to provide benevolent relief to?
The relief provided must only be for people. Your charity must also show that it works for a section of the community that clearly needs help, in other words 'people in need'. General or abstract purposes such as benefiting the whole community is not enough.
An example may be a charity that provides assistance to homeless people within a certain community. If it can show that the community it works for is in need of assistance, it can be a public benevolent institution.
Examples of public benevolent institutions
Examples of charities who may be public benevolent institutions include those that:
- directly provide relief to people in need, such as:
- some hospitals and hospices
- some disability support services
- some aged care services, or
- providers of low rental or subsidised housing, for people in need
- directly engage others to provide relief to people in need, such as a charity that promotes benevolent relief by entering into contracts with service providers to deliver that relief in different areas, or
- provide relief within a relationship of collaboration, such as a charity that raises funds in order to channel these funds to specific programs that provide benevolent relief, through a collaborative arrangement with another organisation that delivers those programs.
Read this factsheet together with:
Contact the ACNC
Phone: 13 ACNC (13 22 62)
Mail: Advice Services, Australian Charities and Not-for-profits Commission, GPO Box 5108, Melbourne VIC 3001
Fax: 1300 232 569