The ACNC Commissioner has just released the ACNC’s Interpretation Statement on Public Benevolent Institutions. The Interpretation Statement provides guidance on the ACNC’s interpretation of the law pertaining to Public Benevolent Institutions (PBI) and insight into how the ACNC and its staff will assess a charitable organisation’s entitlement for endorsement as a PBI. The Interpretation
Earlier today the Full Federal Court handed down its judgment regarding the Hunger Project Australia case and rejected the Commissioner of Taxation’s appeal (Commissioner of Taxation v Hunger Project Australia  FCAFC 69). The court has unanimously held that Hunger Project Australia (HPA) does not need to directly give aid…
On 3 July 2013 the Administrative Appeals Tribunal upheld the decision of the Commissioner of Taxation to refuse endorsement of Home Health Pty Ltd as a public benevolent institution or a charitable institution.
Home Health Pty Ltd (Home Health), a mental health services provider is a proprietary company incorporated on 9 June 1997. The Tribunal refused endorsement on the basis that Home Health is not an ‘institution’.
The Tribunal considered the elements of recognising a ‘public benevolent institution’ as set out in Perpetual Trustee Co Ltd v Federal Commissioner of Taxation  HCA 20. Perhaps self-explanatory, but significant nonetheless, a public benevolent institution must be: (i) public, (ii) benevolent and (iii) an institution.
Home Health satisfied the “public” requirement as the relief provided by the organisation was directed to a sufficiently large sector of the community.…
Many have an opinion about which charitable causes are more worthy of government support than others. However, the Australian Tax Office (ATO) has issued definite guidelines about which charities qualify as Public Benevolent Institutions (PBIs) and “deductible gift recipients” (DGRs) and can therefore grant tax deductible receipts to their donors. This is a critical endorsement for charities to obtain and the applicable principles which are applied must be carefully considered.
Example: The Bayside Leader article ATO must be dreaming by Jenny Ling (15 September 2011) raised the question “What kind of poverty, sickness, suffering, distress, misfortune, disability, destitution or helplessness arouses compassion in the community?”.
What type of DGR is involved?
One can only assume that the applicant applied for an endorsement of her organisation as a public benevolent institution. There would be no other DGR category that would apply. According to the ATO’s tax ruling on public benevolent institutions, such an organisation must direct its activities towards persons in need of relief. The test for the acceptance of an organisation into the category of public benevolent institution depends on the suffering in question arousing compassion in the community.
Continue Reading Are you a Public Benevolent Institution?