Public Benevolent Institution Update

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The Australian Charities and Not-for-Profit Commission (ACNC) published new guidance for charities who identify as Public Benevolent Institutions (PBI) on 31 August 2023.

Prior to this recent statement, interpretation for what qualifies as a PBI had not been substantially updated by ACNC since 2016. 

A PBI is an institution that is organised, conducted, or promoted for the relief of poverty, sickness, destitution, helplessness, suffering, misfortune, disability, or distress.

Unlike many other charities which have clear charitable motives like health-promotion or environmental, PBI have been a broad charitable area which appeared to include a large variety of charitable goals under the misfortune umbrella. The High Court has continued to review PBI matters, which has assisted ACNC in creating some clearer indications of what types of organisations will be considered a PBI moving forward.

PBI classification allows a charity to apply to be a deductible gift recipient and be classified as a DGR which is coveted as a charity as this can entice more donors to give to an organisation as the donor will receive the tax benefit.

To be entitled to registration with the ACNC as a PBI, an organisation must also demonstrate that it meets all three elements of the description of a ‘Public Benevolent Institution’. The organisation must be:

  • ‘public’
  • ‘benevolent’, and
  • an ‘institution’


ACNC will determine if an organisation is public by determining whether the beneficiaries it aims to help form a ‘section of the community’ that is ‘appreciable’.

The new guidelines help further define this public definition. The criteria which an organisation uses to identify who it will help is a critical component of this first element.

The organisation must choose who to help based on criteria that are related to the need it aims to relieve. The organisation does not need to show that it can help all possible people who may need its assistance, but it must show that there is a clear criteria based on need.

ACNC has determined that whether a group of beneficiaries is ‘appreciable’ is a matter of degree that can be determined based on the purpose of the organisation and the ability to fulfill that purpose.

The number of beneficiaries is not necessarily a clear indicator of whether an appreciable number is met.  If only a small number of potential beneficiaries exists due to the nature of the need, that will not prevent the organisation from meeting this requirement.

ACNC presents the example of an organisation who aims to provide relief to those who suffer from a rare disease with only a handful of diagnoses each year. This small number will not preclude the organisation from being considered ‘public’ simply because the beneficiary size is small due to the particular purpose of the organisation.


A PBI must be ‘benevolent’.

The High Court has stated that an organisation will be ‘benevolent’ in the sense required to be a PBI if it is organised, conducted or promoted for the relief of poverty, sickness, destitution, helplessness, suffering, misfortune, disability, or distress. ^Perpetual Trustee Co Ltd v Federal Commissioner of Taxation (1931) 45 CLR 224, 233 (Dixon J).

It is insufficient for an organisation to be only ‘benevolent’ in the sense that it is conducted out of feelings of goodwill. There must be actual action to address a benevolent purpose.

The nature of what these purposes may be quite broad. A PBI’s activities may involve the provision of food or clothing to someone who cannot afford them. However, the relief does not need to be material in nature and may include moral support for people in financial need or those who are grieving losses.

However, the more indirect the connection between an organisation’s activities and the relief of its beneficiaries, the less likely it will be regarded as organised, conducted or promoted for benevolent relief. ^Global Citizen Ltd v Commissioner of the Australian Charities and Not-for-profits Commission [2021] AATA 3313, [115] (McCabe DP; O’Connell SM).

When organisations take steps to create a PBI, the purpose of the charity is important to consider. These purposes usually are manifested as objects in the Constitution for the charity. This new guidance on the ‘benevolent’ role of a PBI highlight the important of objects which have clear purposes and mechanisms to achieve the goals of helping their beneficiaries. As noted in the Global Citizen, it is not sufficient to have a noble benevolent purpose with little mechanisms for action attached. For the best chances to be approved as a PBI, a charity must have a sufficient connection between what an organisation does and the relief of its intended beneficiaries.


An institution is the easiest definition to understand.

ACNC has noted that an institution does not need to take any particular legal structure and can include:

  • a trust
  • an incorporated body such as a company, Aboriginal or Torres Strait Islander Corporation, 72 co-operative or incorporated association
  • an unincorporated body, such as an unincorporated association.

However, the distinction has been made that it cannot be a ‘mere fund’ or ‘mere trust’ which would be defined as an organisation that only exists to manage a trust fund and make distributions.

Next Steps

These new guidelines help charities determine their eligibility of whether they can become a PBI. There are additional nuances and examples in the guidelines which we will continue to share, so stay tuned for our future blogs. 

If you need assistance with your charitable organisation, contact our team today.

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