Connecting the Dots: Targeted impact and Public Benevolent Institution DGR status

The Australian Charities and Not-for-profit Commission (ACNC) has recently clarified and expanded the scope of the charitable subtype Public Benevolent Institution (PBI), making it easier for some charities to register as PBIs and access the coveted automatic eligibility for deductible gift recipient (DGR) endorsement that comes with it. It’s a change that reflects how dynamic the legal framework for charities can be, rapidly making this subtype more accessible for those seeking PBI registration and aligning to modern social values of what ‘benevolent relief’ entails.? ?

To register as a PBI (in addition to the general requirements of a charity), the organisation must meet the following criteria:

1. Public: ?the organisation must assist an appreciable portion of the community. The key consideration is who might benefit from the charity’s activities. If the charity provides relief to anyone who experiences the needs it aims to relieve, this criterion will generally be met. ?
2. Benevolent: the organisation’s activities must be principally directed to the relief of poverty, sickness, destitution, suffering, misfortune, disability or distress – collectively, ‘benevolent relief’. The ACNC considers that relief of poverty is automatically benevolent relief. However, for the other categories of benevolent relief, it must be shown that the targeted issue causes suffering or distress beyond “everyday” pain and suffering. For instance, providing psychotherapy for mental illness may qualify as benevolent relief whereas marriage counselling generally will not. ?
3. An Institution: the organisation must be a body created to conduct activities in furtherance of its purpose of benevolent relief, meaning it does not exist merely to manage funds or make distributions.

Whilst the eligibility criteria for PBI appears relatively prescriptive compared with other charitable subtypes, we often find that the interpretation of benevolent relief is applied quite broadly. Generally, where the organisation can demonstrate that its charitable activities focus on alleviating the suffering of a specific, disadvantaged segment of the community, PBI may be an available option.

This subtype is particularly beneficial for charities who engage in education-based activities. Many charities falling under the ‘advancing education’ subtype are not eligible for DGR endorsement due to the lack of directly corresponding DGR category. However, if their educational activities are targeted at helping specific groups in need (for example, Aboriginal and Torres Strait Islander people or individuals with disabilities) DGR may be available through the PBI pathway.

Similarly, PBI is advantageous for entities involved in providing development assistance activities that promote the long-term wellbeing for disadvantaged groups. This is particularly true for overseas charitable activities, as the ACNC has recognised that where those activities take place in developing countries where large parts of the community live in poverty, development activities will generally be considered benevolent relief.

At first glance, the eligibility criteria for this subtype may appear difficult for prospective charities to satisfy. However, often it is simply a matter of carefully considering the nature of the beneficiaries, and whether the charitable activities can be reframed to be considered ‘benevolent relief’.

Questions? Looking to register as a charity and want to understand how you can get DGR status? Give us a call.