Australian Charities and Not-for-Profits Commission’s (ACNC) Interpretation Statement for eligibility as Public Benevolent Institution (PBI)

30 Oct 19

The ACNC’s Interpretation Statement (“the Statement”) provides guidance to ACNC staff, charities and the public on how the ACNC comprehends the law that applies to charities. The Statement is binding on ACNC staff to ensure consistency and fairness. This article aims to summarise the key points in the Statement.

What is a PBI?

For ACNC purposes a PBI is a charitable institution with a main purpose of providing benevolent relief to people in need.

Additionally, to be eligible for registration as a PBI subtype of charity, an entity must also be eligible for registration as a ‘charity’ under the Australian Charities and Not-for-profits Commission Act 2012 (the ACNC Act).

To be registered as a charity, an entity must meet the definition of a ‘charity’ in s.5 of the Charities Act 2013 (Cth) (Charities Act) and therefore must have a ‘charitable purpose’ as set out in section 12 of the Charities Act, be a not-for-profit entity, and conform with the governance and external conduct standards;


As to whether a PBI satisfies the “public” limb of the definition, the main criterion is the breadth of the class of individuals that the entity benefits.

The other criteria include:

  • receipt of public funds;
  • public control and accountability; and,
  • connection with government.

The main requirement is that the PBI benefits certain members of the public that are in need.


In simple terms, a PBI must have benevolent relief as its main purpose, and that relief must be specifically targeted at people in need and provided to relieve the needs of those people.

A PBI’s services must be actually directed towards relieving the poverty or distress experienced by the people it assists. It is not enough that the entity’s services are targeted at people in need.

The ACNC takes the view that those that have “significant needs” will generally be considered “people in need”. The ACNC also accepts that the term “at risk” can refer to people who are already in need. This will be the case if the risk factors they experience or their condition is such that the community’s compassion is aroused – for example, if they are suffering from illness or disability, or are in poverty.


A new organisation that is yet to commence operating may be eligible for registration as a PBI. To qualify, it must demonstrate that it has concrete plans to operate in the foreseeable future (within one year of establishment) in order to evidence the bringing of its founders’ purposes and intentions into being.

The provision of an operational, strategic or business plan (two or more pages) outlining what it proposes to do, the resources it requires and how it will obtain them, the personnel it will engage, its financial projections and the third parties it may involve.

The provision of agreements with other organisations setting out how the organisations intend to work together to provide benevolent relief. In addition, evidence of in-principle financial support or seed funding will be advantageous. The more rigorous the above documents are, the more readily the organisation will be able to evidence that it was established to bring the purposes and intentions of its founders into being.

Ongoing Compliance

Once PBI status is granted to an entity or trust, there are ongoing obligations. If a registered PBI:


  • contravenes a provision of the ACNC Act or has not complied with a governance standard or external conduct standard; and
  • the contravention or non-compliance is significant; and
  • as a result, the entity is no longer entitled to be a registered charity or a registered PBI subtype of charity;


the entity is required to notify the ACNC of any of the above circumstances pursuant to Division 65 of the ACNC Act.

Deductible Gift Recipient

An organisation that is registered by the ACNC as a PBI subtype of charity, must meet additional conditions before it will be eligible for endorsement as a deductible gift recipient (DGR). This assessment is made separately by the Australian Taxation Office.


In summary, the regime for being classified as an eligible PBI is quite rigorous and hopefully the above provides greater clarity to organisations or trusts that wish to apply for and maintain PBI status with the ACNC and ATO.

This article was written by Philip Evangelou of Salvos Legal. Salvos Legal is an award-winning social enterprise that is experienced in not-for-profit, all areas of commercial, property and migration law. All of its profits from its commercial legal services are used to fund Salvos Legal (Humanitarian) which provides pro bono services to the disadvantaged community.