New Interpretation Guidance for Public Benevolent Institutions (PBIs)

When not-for-profits want Public Benevolent Institution (PBI) status, the first stop is the Australian Charities and Not-for-profits Commission (ACNC), and they have guidelines about what is required to get this status. The ACNC publishes the criteria it uses. 

In future, NFPs should look at the new Commissioner’s Interpretation Statement (CIS). The ACNC must use the statement when determining whether to endorse charitable organisations as PBIs. The old Taxation Ruling 2003/5 is now out of date.

What is a PBI?

A PBI is a subset of a charitable institution that has benevolent relief as its main purpose and provides relief that is:

• specifically targeted at people in need; and
• given to relieve the needs of those people.

PBI status – Tax Concessions

Charitable organisations with PBI status are endorsed as Deductible Gift Recipients (DGRs):  Donors can receive tax deductions for their donations. DGRs can also receive other tax concessions.

Do you need to provide direct relief to be a PBI?

No – the charity is under no obligation to directly provide or give benevolent relief.

Relief can be provided by associated entities, agents or contractors that are not PBIs, as long as the PBI has clear mechanisms of delivering the relief for the fulfilment of benevolent purposes.

Can a new organisation be registered as a PBI?

Yes – to be registered as a PBI, your organisation must demonstrate that it has concrete plans to operate within 1 year of establishment to show that you intend to fulfil your benevolent purpose.

Can charities operating overseas still be considered PBIs?

Yes – the charity is eligible for PBI status as long as its main purpose is to provide benevolent relief to people overseas.

If you have any questions or require assistance with PBI endorsement, contact Peter McNamara today.

You can access the statement here.