Transcript

Matt Crichton:

Hello everyone and welcome to today’s webinar on Public Benevolent Institutions and Health Promotion Charities.

A bit of a mouthful of a title but I’m sure those of you who have come along to listen will get a lot out of it.

My name is Matt Crichton and I’m from the ACNC Education team here and joining me to go over these two important charity categories is Al MacIver who is a Technical Advisor at the ACNC. Hi Al.

Al MacIver:

Hi Matt.

Matt Crichton:

Before we get into the detail of both categories today, just a few things to run through. If you do have any audio troubles call the number in the email that you received upon registration.

There’s a code in there and you can use your phone to access the audio, sometimes there’s a better way if you’re having trouble via your computer or the internet browser, whatever you’re using.

Also if you’ve got questions throughout, we’re happy to answer them via text. In the Go To webinar navigation panel you should have an option in there to ask questions.

We’ve got a couple of colleagues standing by to answer all the difficult questions you have ready to throw at them, and that’s Nicola and Chris, so you’ll receive responses from either Nicola or Chris throughout the Webinar if you choose to take that path and ask a question.

Otherwise we will have some time for questions and answers at the end of the formal presentation whereby Al and I will answer some of the more general and the questions that are useful for everybody.

If we don’t get to your question, if many are coming through, don’t worry, we will make an effort to get in touch with you via email.

And of course keep your questions general, it’s a better rule rather than getting into the specifics of your particular organisation, in many cases that depends on many details that we don’t have at hand and you’re better off giving us a call and having a proper chat about the details of your organisation, what you need to do, rather than a question in a webinar forum.

And we do record these sessions and send a follow-up email to everyone within a day or two of having finished the webinar.

So need to scribble down every single note on the screen and every URL that we show you, that will be included in the follow-up email and you will have access to the slides from that email as well.

So look out for that in the next couple of days.

OK having said all that, let’s go through what we’ll cover today.

First we’ll have a look at the significance of both of these charity categories. We’ll have an explanation of both of them, Public Benevolent Institution and Health Promotion Charity.

As you can see there in brackets we’ve got the initials PBI and HPC. If we slip in to using the initials throughout, forgive us, Public Benevolent Institution and Health Promotion Charity both have a lot of syllables, it can be easier to say PBI and HPC.

So if you hear PBI, you know what we’re talking about. HPC likewise. We’ll go over some examples of what may and may not be considered charities for these categories.

And we’ll take a quick look at the registration requirements and the process in what the ACNC looks for in an application when we’re assessing these categories.

And of course, as I mentioned, at the end some audience questions.

OK before I throw over to Al to go through some of the details of each category, we’ll just touch on the significance of both of these categories and for many organisations it is tax concessions because both of them have a category set aside with the ATO to be endorsed as a deductible gift recipient, which means that organisations can offer tax deductibility on the donations that they receive from donors.

So it might be a valuable endorsement to have for many organisations. So if you’re registered with the ACNC as a PBI or an HPC it usually entitles you to endorsement as a DGR from the ATO.

But an important note, and we’ve got that on the screen there, is that registration as either of these categories does not affect your regular ongoing obligations, your reporting obligations to the ACNC.

Whilst it may open up the door to some tax concessions with the ATO it doesn’t give you any different reporting obligations to the ACNC. You still have to meet the regular reporting obligations as a registered charity.

If you want to have a look at more detail about some of this there’s some URLs down there at the bottom.

The ones from the ACNC website are a bit shorter, www.acnc.gov.au/obligations cover your regular charity obligations, and www.acnc.gov.au/DGR gives you an overview of the tax aspect as it is on our website.

But if you wanted to have a look at the ATO’s information about DGR and the categories, I’ve got a fairly long URL there, but as I said that’ll be in the follow-up email if you can’t be bothered writing that down now.

OK enough from me for the time being. Let’s have a look at the first category, Public Benevolent Institutions (PBIs) and I’ll ask Al to take over and give us a broad overview of what this category is.

Al MacIver:

OK thanks Matt.

So a PBI is an institution that provides benevolent relief as its main purpose and that relief is provided to people in need.

So first off it must be eligible for registration as a charity, so it must have an ABN, it must have only charitable purposes, it must be not-for-profit, all the usual requirements.

Then there are three additional aspects that it must satisfy, it must be public, it must provide benevolent relief and it must be an institution.

Matt Crichton:

OK there’s a bit to that. We’ll have a look at each of those aspects in a moment.

We’ll start with probably the easiest of the three, public. What do we mean when we say there’s a requirement that it’s public?

Al MacIver:

OK so the only essential requirement is that the class of beneficiaries must be extensive, so that means they must form a sufficient section of the community.

So if an organisation was only providing help to people from one family or employees of a particular company or members of private club, that would not be sufficiently public.

Matt Crichton:

Right, so it’s too restricted.

And even though in those cases that you just mentioned there may be the other requirements met, that they are not public enough would mean that they would fail on this category.

Al MacIver:

That’s right.

Matt Crichton:

How about institution?

This is a bit more tricky, it’s one that often trips up some people in thinking about applying for a PBI. What do we mean by institution and the requirement that an organisation is an institution?

Al MacIver:

An institution is an organisation which exists to translate the purpose as conceived in the mind of the founders into a living and active principle.

So that means the organisation must carry out a sufficient level of activities to kind of bring to life the purpose of the entity.

So a mere trust or fund is not an institution because a trust merely manages and then disperses or gives away the money, so that’s not a sufficient level of activity.

Matt Crichton:

OK so it needs to be… the organisation needs to be doing stuff, enough stuff, activities, to show that it’s bringing about the mission or the purpose as conceived by the people that started the organisation?

Al MacIver:

That’s right, yeah.

Matt Crichton:

So it can’t just, as you mentioned, a fund or a trust, simply is holding money and then giving off money, it’s not doing anything more to bring about this purpose or mission?

Al MacIver:

That’s right.

Matt Crichton:

And just quickly, before we move on, on institution, if an organisation is planning to apply as a PBI, how can they show that they are an institution? Are there any sort of classic things or activities that they can show that suggest they are more than just a mere trust or a fund?

Al MacIver:

Any range of activities that goes beyond that of a mere trust would be sufficient. So fundraising would be… active fundraising would be sufficient. Or actually delivering the relief themselves.

Matt Crichton:

OK.

All right, now just looking at the third option, the middle part of the phrase Public Benevolent Institution is this concept of benevolent relief.

Again it’s a tricky one, it trips up a lot of people when thinking about what their organisation does. Can you give us an overview of what we mean by benevolent relief?

Al MacIver:

Sure.

So this is the really key issue with PBI, so they need to be relieving needs that are beyond the suffering experienced in everyday life.

And they must be sufficiently targeted to people in need. And there must be a clear mechanism for the delivery of relief.

And relief does not have to be provided directly. And it has to be the main purpose of the entity.

Matt Crichton:

OK there’s quite a bit there for benevolent relief.

I might just take you back to one of the first things you said in explaining this, was that it has to be beyond the suffering of everyday life or daily life.

Can you just expand upon that for a moment? What do you mean by that?

Al MacIver:

Sure. So the courts have stated that the stress and pain encountered an ordinary human experience, such as failure or loss of status and reputation, and even bereavement if you lose, say, a grandparent for example, they are not serious enough to qualify as needs requiring benevolent relief.

Whereas, say, with bereavement, if a parent lost a child, that would generally be considered of such seriousness that it would arouse compassion or pity in the community.

And that’s the test that needs to be satisfied.

Matt Crichton:

OK right.

So there is a little bit of flexibility there and that will rest on the details of each particular organisation and what they’re set up to do.

Al MacIver:

That’s right.

Matt Crichton:

But it must show that the relief that they are aimed at helping is that which would bring about compassion, a sense of compassion or pity in the general community.

Al MacIver:

That’s right, yeah, it needs to be a serious need.

Matt Crichton:

And just on the second point here, specifically targeted to people in need. So just general support is not enough, you need to identify the people and the need.

Al MacIver:

Yes. So you might have a focus on social welfare issues but if you’re just educating the public, the general community on the issues, then that’s not targeting a group which is in need of benevolent relief.

So you would identify a group who is suffering such that they need a particular support or relief of the thing that they’re suffering from, and that would be the benevolent relief.

Matt Crichton:

Yeah that’s right. OK and a couple of more things to touch on before we move on to some examples. All purposes must be directed at benevolent relief. Does that mean everything that the organisation does?

Al MacIver:

So the courts have used the term “main purpose” or “dominant purpose” or “predominant purpose” and it’s slightly misleading in that actually all the purposes have to be directed to benevolent relief or if there purposes that are not directed at benevolent relief, they have to be just a means of achieving the benevolent relief.

They have to be ancillary or incidental in that way.

Matt Crichton:

OK so they can’t be independent purposes of themselves acting within the charity, they need to be aimed at that ultimate purpose of benevolent relief?

Al MacIver:

That’s right.

Matt Crichton:

OK. And the clear mechanism aspect here, this one can be often misunderstood by people applying. What do we mean by clear mechanism for providing for benevolent relief?

Al MacIver:

Right, so say activities such as lobbying government or awareness raising, education aimed at the general community, or research, they don’t have a clear mechanism for the delivery of relief.

So they may have a downstream consequence of relief of needs but any actual relief is not an automatic consequence of what the entity is doing.

Matt Crichton:

OK, so even though what they’re doing is good and may even be charitable and may even lead to some benevolent relief further down the line, those sorts of activities don’t have that clear mechanism that link between the activity and, as you describe, automatically, the automatic relief of the needs of the people that need it?

Al MacIver:

That’s right.

Matt Crichton:

But it can be part of a formal collaboration. The final dot point here says it doesn’t need to be direct.

So does that mean that an organisation doesn’t need to have people on the frontline or in the street doing the work, it can be part of an organisation, or a collaboration with others?

Al MacIver:

That’s right yeah. So it could be a fundraising entity providing funds to a related entity, as long as there’s a relationship of collaboration or a common benevolent purpose between the two.

Or an entity could be a peak body assisting member public benevolent institutions and itself could be a PBI. Or an organisation could contract agents to deliver the relief on its behalf.

Matt Crichton:

OK. But even in these circumstances the collaboration needs to be working towards benevolent relief, right?

Al MacIver:

Yes that’s right. There needs to be a clear mechanism for the delivery of relief.

So for a fundraising entity clearly the funds are given to the related entity and the related entity provides the services on their behalf, so there’s a clear mechanism.

Matt Crichton:

So in a fundraising agency it couldn’t be that the fundraising agency gives a lot of their funds or most of their funds to an organisation that they have an agreement with that does benevolent relief and then some other funds to another organisation, it wouldn’t be a PBI in that instance?

Al MacIver:

That’s right, yeah. It wouldn’t have a main purpose of benevolent relief if it has an independent right, non-benevolent relief purpose.

Matt Crichton:

OK, all right, I think that does a good job of clearing up quite a tricky aspect of this category and the requirements for this category.

If you want to read a little bit more, you can see down the bottom left there we’ve got a couple of URLs, www.acnc.gov.au/PBI is a fact sheet which… well it largely goes through some of the details that we’ve talked about here but you can read through it at your own pace.

And also www.acnc.gov.au/CIS which stands for Commissioner’s Interpretation Statement. That’s a statement that the Commissioner of the ACNC has put in writing about Public Benevolent Institutions, and other topics, but Public Benevolent Institutions is one of them which lays out how the ACNC understands the category and how it will apply the law as it currently stands.

So if you wanted to have a look at that statement I recommend going to the website there, forward slash CIS. Let’s move on.

OK some examples. So these are organisations that would all qualify… generally. Let’s assume that in most cases there aren’t some anomalies that prevent them, but in most cases these would qualify as PBIs.

They provide benevolent relief to a targeted group of people in need of that relief. Would you say these are the most common PBIs Al?

Al MacIver:

Yes, we get a lot of these types of entities.

And so to take homeless shelters as an example, it would be providing relief of poverty and distress by providing accommodation and meals to homeless people and it’s clearly targeting relief to people who meet that criteria of being homeless.

And it doesn’t restrict the people who can benefit, so it’s a significant section of the community.

And obviously the distress and poverty faced by those people is of such seriousness that it would arouse compassion in the community.

Matt Crichton:

OK. Let’s move on and have a look at Health Promotion Charities, or as we’ll probably refer to them from now on as HPCs because it’s quicker.

Again Al can you give us an overview of what a Health Promotion Charity is, an HPC?

Al MacIver:

Sure. So this is a slightly misleading name because it’s all about disease rather than health promotion.

So it’s an institution that has the principal activity of promoting the prevention or control of disease in human beings. So firstly, again, it must be eligible to register as a charity. It must be an institution.

And then it must promote the prevention or control of disease.

Matt Crichton:

So these first two are similar to PBI, right?

Al MacIver:

Yeah.

Matt Crichton:

The same requirements.

Al MacIver:

That’s right.

Matt Crichton:

But the third one here, as you mentioned, it focuses heavily on disease.

Can you… I now we all have a pretty sound understanding of what the word disease means, but can you give us an overview of what we’re looking at when we’re considering it within the context of Health Promotion Charity?

Al MacIver:

Sure. So disease doesn’t have a technical legal meaning, it just takes its ordinary meaning. So the Macquarie online dictionary defines disease as a morbid condition of the body or of some organ or part, or an illness, sickness or an ailment.

So that pretty much aligns with what we generally think of when we think disease.

Matt Crichton:

Right, there’s no hidden secret meanings that we apply when we assess an application for an HPC.

Al MacIver:

No.

Matt Crichton:

OK. And just on the third dot point here on the screen, although we mentioned also for the ACNC will be guided by the work of other leading health organisations, of course the ACNC itself isn’t a leading health organisation so we do rely on the expertise of others, some examples being World Health Organisation, the NHMRC.

But we’ve got here that not everything that affects a person’s mind or body is a disease even though the dictionary definition does say a condition of the body, or some organ or part, but not everything qualifies as disease.

Al MacIver:

Yeah that’s right.

So, say, pregnancy is a health condition but it’s not a disease. Likewise injury is not a disease.

Matt Crichton:

Right. The other aspect of Health Promotion Charity is this concept of promoting prevention or control of the disease.

So with a clear understanding of what we mean by disease which, as you mentioned, is pretty consistent with what most people think of disease anyway, what are we talking about when we say promotion, or promoting the prevention or control of disease?

Al MacIver:

Right, so again promote and prevention and control take their ordinary meaning, so they’re very broad meanings. Promote, we take to be quite an extensive range of activities.

So this is where HPC differs from PBI in that you could be undertaking lobbying government or awareness raising, education of the general public on disease or research, and these would all fall within the scope of what a Health Promotion Charity does.

So to promote includes all those types of activities.

Matt Crichton:

OK, so whereas a PBI we mentioned that those sorts of activities, lobbying government or broad awareness raising lack the clear mechanism for providing automatic relief of the needs that it was trying to relieve.

In the case of a Health Promotion Charity the word promote is important, so those sorts of activities can fall within it?

Al MacIver:

Yeah.

So the definition of prevention is obviously much broader than relief activities so it encompasses all of those types of activities that can have a downstream effect, like education and lobbying.

Matt Crichton:

Right. Just before we move on, the last dot point here I think is worth just clarifying a little bit.

Does not apply to general health and wellbeing programs, must relate to identified disease.

So in the case of an organisation that maybe promotes healthy eating and the benefits of regular exercise and offers some subsidised personal training classes, to promote general health, that wouldn’t fit within this category.

Al MacIver:

Yeah that’s right. So promoting exercise can have an effect of ultimately preventing disease but the actual activity, if it’s focused on exercise, it’s not the prevention, the promotion of the prevention and control of disease.

Likewise with mental health there’s some activities like positive psychology which are focused on improving everyone’s general mental health, and I’m sure we can all improve in that way but that doesn’t mean that we have a disease or a mental illness.

Matt Crichton:

Yeah right, OK. One more thing to look at for HPC is this concept of a principal activity.

In the PBI section just before we mentioned the idea of a main purpose and the need to show that the main purpose is directed at benevolent relief.

In the case of an HPC, a principal activity is an important consideration. Can you just describe what we mean by this?

Al MacIver:

Sure. So again this is less restrictive than with PBI in that you can have an independent purpose or activity that’s not focused on disease.

The principal activity just means the activity that outweighs all the other activity.

Matt Crichton:

OK. So if you took a tally of the stuff you do and the one that you do the most, that would fit the definition of principal activity?

Al MacIver:

That’s right.

Matt Crichton:

Right. So the second dot point here, an HPC can undertake other activities but the activity that promotes must be the principal… the other activities, are there any restrictions on the other activities that they can do?

Al MacIver:

Only that they have to be in furtherance of a charitable purpose in order to meet the requirements to be registered as a charity.

Matt Crichton:

OK. But it doesn’t have to be for health, so they could do some other things that are perfectly charitable, for example they advance education or they are advancing the protection of the natural environment, or something that is charitable but isn’t related to the health promotion activities, is that OK?

Al MacIver:

That’s right. Yeah that’s fine.

Matt Crichton:

And that’s where it does really deviate from the PBI requirements.

Al MacIver:

Yes.

Matt Crichton:

OK. Let’s have a look at… just before we move on actually, down the bottom here, I’ve been reminded by the URLs that have popped up, www.acnc.gov.au/HPC is a thorough fact sheet, a comprehensive fact sheet on the Health Promotion Charities category.

And again as I mentioned, the Commissioner’s Interpretation Statement on PBI, there is one for HPCs as well, so if you go to www.acnc.gov.au/CIS you will find a Commissioner’s Interpretation Statement on Health Promotion Charities.

Some examples of organisations that are commonly registered as Health Promotion Charities, medical research organisations that do research into disease, raising public awareness about a disease, its causes and how people can take action to avoid it, education, educating carers of people with a disease, even providing equipment or aids to help people suffering from a disease.

And you’ll notice the word disease in all of these dot points and that is, as Al has mentioned, it’s worth reiterating, it’s the aspect that sort of underpins the registration as an HPC, it really must be looking at an identified disease and how to either prevent it or control it.

There are a lot of applications that come in for HPC that might not get up as an HPC and might be disappointed it might be turned away.

Whilst it’s probably advancing health it’s not within this category. Can you give us some examples, Al, of some of the things that we often see?

Al MacIver:

OK. So if you’re promoting exercise and the benefits of exercise then that is, it’s related to health and it would qualify as promotion of general health but it wouldn’t qualify as preventing or controlling disease.

So it would have to be actually focused on a disease that is caused by a lack of exercise to be able to qualify as an HPC.

Matt Crichton:

And again as you mentioned, activities that are designed to just improve general wellbeing, because there’s a lot of that now, that people are aware of the importance of general physical and mental wellbeing, it often just falls short of this category.

Al MacIver:

Yeah that’s right.

Matt Crichton:

The hint, as we’ve got here, it may be helpful when thinking about this category in whether or not your organisation does do the things it’s required to for this category, it might be helpful to think about it as disease prevention or disease control rather than health promotion.

As Al mentioned at the beginning, Health Promotion Charities takes a slightly misleading name and it might be more helpful to call it a Disease Prevention Charity or a Disease Control Charity as a way just to shape your thinking and get you thinking in the right sense about this.

Let’s just have a quick look now at some of the ACNC requirements.

We’ve listed… this is a broad, a brief summary. So there are some more details that you can read up on of course but it’s worth going through these to give you an idea of what we’re looking at.

For both PBIs and HPCs it has to meet the standard requirements for charity registration which is, as Al has mentioned, being not-for-profit, having a charitable purpose, not being a government entity, having no disqualifying purposes. We’ll get on to institution in a moment.

But first, Al, can you take us through some of these, first not-for-profit. This might seem simple but it’s worth reiterating. How does an organisation show it’s not-for-profit?

Al MacIver:

OK, so it will usually demonstrate it through its governing documents with a clause that prevents any profit accruing to the members or any associated entities, and having a clause relating to winding up or when the entity finishes up, to give all of the assets to a charity or towards charitable purposes.

Matt Crichton:

OK, so no-one can… no people can benefit personally from an organisation closing down by taking on the assets and all the surplus funds?

Al MacIver:

That’s right.

Matt Crichton:

And just quickly on that, there’s often some confusion, this is not to say that an organisation can’t make a profit, it’s that people… they can’t distribute the gains of a profit to the people involved.

Al MacIver:

That’s right, yeah. So a for profit entity makes a profit and then distributes the profit to the private shareholders.

So a not-for-profit can make a profit but it has to put all of those assets towards its charitable purpose or its not-for-profit purpose.

Matt Crichton:

OK, important distinction to keep in mind. And charitable purpose, can you just give us a quick overview of this?

Because it is in legislation, isn’t it?

Al MacIver:

Yeah.

So a charitable purpose has been set out the Charities Act, the definition of charity, a charitable purpose Section 12 and that includes things like advancing health, advancing education, advancing social or public welfare, advancing religion and a variety of other categories.

Matt Crichton:

The third one here, it can get tricky and we’re not going to go into it too deeply because it could be a full webinar on its own I think, but a government entity, a charity can’t be a government entity.

What do we mean by that?

Al MacIver:

Yes, this is a very complex issue. It’s basically where an entity is a creature of government, so where it’s carrying out a government function or it’s under the control of government it may be a government entity.

But it’s very complicated and there’s a Commissioner’s Interpretation Statement devoted to the meaning of government and entity.

Matt Crichton:

And no disqualifying purposes, this would probably be an unfamiliar term to many people listening. What do we mean by disqualifying purposes?

Al MacIver:

Right, so that’s again set out in the Charities Act at Section 11 and it says it’s the purpose of engaging in or promoting activities that are unlawful or contrary to public policy, or the purpose of promoting or opposing a political party or a candidate for political office.

Matt Crichton:

Right. Again there’s a lot to this and disqualifying purposes can get quite detailed as well but broadly speaking though they are the two things to think about. Now evidence show that an organisation is an institution, not merely a fund or a trust.

We’ve gone over that and there a range of ways that you can demonstrate that your organisation is an institution. But that’s requirements for a PBI and an HPC, that wouldn’t be a requirement for just a regular charity.

Al MacIver:

That’s right.

Matt Crichton:

And PBI and HPC, Al, can you just give us a review of those main differences, the requirements for these two, which again are above and beyond that of a regular standard charity?

Al MacIver:

OK, so a PBI must be public, it must be providing benevolent relief and it has to be an institution. So with a benevolent relief it has to have a main purpose of provision of benevolent relief to people who have really serious needs.

So that means that all the purposes must be focused on the relief or must be ancillary or just a means to achieve that relief.

Matt Crichton:

And HPCs?

Al MacIver:

So they are focused on disease.

They have to demonstrate that they’re an institution and that they have a principle activity of promoting the prevention or control of diseases in human beings.

Matt Crichton:

And that’s one thing we haven’t really focused too much but the last two words on this slide, this in human beings, right.

So there are plenty of diseases that affect flora and fauna but we’re looking at diseases in human beings.

Al MacIver:

That’s right.

Matt Crichton:

We’ll have a look at how the ACNC registration process works. If you are applying for either of these two categories you have a fair idea.

There’s an online registration form of course, you fill in all the details, we receive that and have a look at the details of your organisation and then once we have made a decision on the category… well first on whether or not your organisation can be a charity and then under which types it can be registered, including PBI and HPC, we send off the details to the Australian Taxation Office who make a decision on the tax concessions.

From what I understand it, they don’t do another check of the charity aspect of it. They take the ACNC’s determination and then apply tax concessions based on that as a general rule.

Of course there may be the odd case where details suggest otherwise. But in general that’s the way it works.

Al, I’ll just have you explain that this isn’t collaborative process, right? It’s not as if hitting submit on the online application form closes the door and you don’t hear about anything for weeks?

Al MacIver:

No, it’s definitely a collaborative process.

So the analyst with your application will contact you and discuss the application and if they need any further information they’ll talk to you about that, and talk through any issues.

Matt Crichton:

And people have a chance to make any changes or adjustments to, say, their constitution or be able to clarify their activities and that sort of thing?

Al MacIver:

That’s right, yeah.

Matt Crichton:

OK. That brings us to the end of the formal presentation. Now we do have some time for questions. We’re not going to hold you up too long. I know that Nicola and Chris, our colleagues, have been busy answering many questions via text and a few good ones have come through that we thought were worth sharing with everyone.

So if you do have any questions that you’d like us to cover now that the formal presentation is done, send them through, we’ll try our best to get to all of them. But as I said, if many come through and we just simply can’t get to all of them, we will get in touch with you via email to answer your question.

But first, Al, one question that has come up in relation to PBI, and I guess it would apply to HPC as well, is whether or not activities overseas take any different requirements?

Al MacIver:

Right, so when an entity is doing activities overseas there’s additional risks involved with funds going overseas or assets going overseas.

So in order to ensure that an entity meets the governance standards we will ask additional questions relating to the risks associated with sending funds or assets overseas, or carrying out activities overseas.

So if an entity is dealing with children, there’s also additional risk involved there and we will ask additional questions to ensure the safety of the children.

Matt Crichton:

OK. So the ACNC will ask a few extra questions to make sure everything is as it should be but the bare bones requirements are pretty much the same, right?

They’re the concept of benevolent relief and in the case of an HPC, promoting prevention or control of disease.

Al MacIver:

That’s right.

Matt Crichton:

One more question has popped up on institution. Is there any minimum requirements for the number of people that make up an institution?

Do you have to have ten Board members? Does it take any particular requirements?

Al MacIver:

No there aren’t any minimum requirements but with PBI the public aspect of public benevolent institution, the courts have looked at the number of responsible persons or committee members there and we will sometimes look at that if there are questions about the public nature of the entity.

Matt Crichton:

Just one of the… I know we touched on it, we did speak a fair bit about it, this notion of collaboration for PBI, someone’s just asked about the details of this and they’ve mentioned a fairly famous case that steers much thinking about collaboration.

Can you just give us a broad overview of the Hunger Project and how that applies to PBI?

Al MacIver:

Sure. So that was about a fundraising entity and it was raising funds and then giving the funds to its associated Hunger Project entities overseas and they were carrying out the benevolent relief.

And the court decided that the fundraising entity was a PBI and it looked at another decision, Word Investments, and in that case an entity was raising funds to give towards religious purposes, advancing religion, and that was held to be a charity.

So following Word Investments, the judges and the Hunger Project decisions decided that they should take an approach putting substance over form and consider the consequence of fundraising and giving it to the associated entity, and decided that there was a clear mechanism for delivering relief and therefore the entity was a PBI.

Matt Crichton:

OK right. So the significance of that being that the entity in Australia was, as you described, a fundraising body.

It wasn’t… it didn’t have people on the frontline in Australia doing direct relief work within Australian cities.

Al MacIver:

That’s right.

It was just doing the fundraising aspect but because it shared a common benevolent purpose with the other entities overseas and it was distributing funds which were used solely for carrying out benevolent relief, then that was accepted as a PBI.

Matt Crichton:

I might just pick your brain on this topic for a little bit for the benefit of people, I think it might be worth touching on. For a fundraising entity then, does it have to have a sort of formal agreement?

If you’re an independent fundraising entity that gives to lots of charities and you make the decision about who you give to based on whatever processes you have but there isn’t particular formal arrangement or contract with charities doing benevolent relief, do you think… is it your sense that that might be a PBI as well?

Or does it really need to have that sort of formal arrangement?

Al MacIver:

It needs to have a common benevolent purpose with the other entity or entities, or it needs to have a relationship of collaboration where it’s clear that all the funds used will be used solely for benevolent relief purposes.

Matt Crichton:

OK. So it really does need a little bit more than just an independent isolated entity?

Al MacIver:

Yeah that’s right.

Matt Crichton:

And just another question that’s come through on Health Promotion Charity. You mentioned that it encompasses mental illnesses as well as physical illnesses but it doesn’t cover the concept of general health.

Someone’s asked about the concept of meditation and mindfulness and the clear health benefits that that has.

I’m not a health professional myself, I don’t know what the latest research is but is it your sense that something like that would sit pretty close to the entrance of HPC? Or is it a fair way off?

Al MacIver:

We would look to bodies like the National Health and Medical Research Council and research that they do, or the systematic reviews of studies on mindfulness or meditation in relation to particular mental illnesses to see if there’s enough evidence to show that that actually prevents or controls that disease.

Matt Crichton:

Right.

Oh and you mentioned disease again, so even in this case, this hypothetical case, the organisation would still need to put forward an identified disease that their meditation or mindfulness is preventing or controlling? It can’t just be the mindfulness and meditation without the disease?

Al MacIver:

That’s right, it would have to be depression or an anxiety disorder or post-traumatic stress disorder, or something like that.

Matt Crichton:

OK. And one more on HPC before we finish up because we’re pushing 45 minutes now and I don’t want to keep people too long over their lunch break.

With promoting diseases, how does the ACNC… actually this would apply to PBI as well… what sort of things does the ACNC ask for beyond the standard online application form for an organisation to prove that they promoting the prevention or control of disease for an HPC, or providing benevolent relief for a PBI?

What sort of things can an organisation provide beyond their sentences within the online application form?

Al MacIver:

We may need additional information depending on the circumstances, on the activity.

So we might request a more detailed description of the activities or might request annual reports or strategic plans or other documents that demonstrate how the entity is carrying out the purpose.

Matt Crichton:

OK, so it depends on the case?

Al MacIver:

That’s right, yeah.

Matt Crichton:

OK. A few questions coming through and we are trying our best to get through all of them. Some of them… the more specific ones, it may be worth giving our advice team a call on 132 262. In that case you’re much more likely to have the ins and outs of your particular organisation dealt with directly rather than through this public webinar forum.

And it might be worth noting that there isn’t a wait to get on the phone for one of our advice services, staff as well, so give them a call, 132 262, and they’re very friendly and knowledgeable and they’ll be able to help you out with the details of your particular organisation.

Of course there is lots of information on our website, acnc.gov.au is the homepage and then you can see some URLs here with some relevant information, PBI, HPC fact sheets, Commissioner’s Interpretation Statements, obligations, pages that cover DGR and even who can register, so that outlines the requirements of being registered as a charity.

The ATO also has a section on their website for non-profits which covers some of the tax concessions and in particular DGR and the requirements of several DGR categories.

I know that a lot of people are looking at these categories for the purposes of being registered as DGR with the ATO so they can offer tax deductible donations.

It might be worth going to that page and having a look at the DGR table which outlines all the categories that the ATO has.

OK, also stay in touch with the ACNC via a number of ways, there’s Commissioners Column and email updates, web guidance, video content, webinars such as this and give our advice services team a call if you have any particular questions about your organisation and its obligations to the ACNC or its registration as a PBI or an HPC, that’s 132 262, or you can email us, advice@acnc.gov.au and we’re pretty big on social media, Facebook, Twitter, YouTube and subscribe to our podcasts.

OK, that’s a lot of advertising and plugging for ourselves.

That’s it for today. Thank you very much Al for taking us through the intricate categories of PBI and HPC.

Al MacIver:

That’s great, thanks Matt.

Matt Crichton:

And thanks to Nicola and Chris who have been frantically answering all the questions via text as we’ve been going along.

Again, apologies if we don’t get to your question, we can only answer as many as we can answer and we will endeavour to send you an email to answer your question later on.

If you have any feedback for the webinars - this is separate to questions about PBI and HPC and your registration application - if you have any feedback about webinars specifically or any web guidance or anything like that, give us an email at education@acnc.gov.au.

And that’s it for today.