ACNC clarifies position on PBI

The Australian Charities and Not-for-profits Commission (ACNC) has clarified its position on Public Benefit Institution (PBI) status for charities ahead of a pending court challenge with big tax implications for many organisations.

The regulator has published a new Decision Impact Statement (DIS) aimed at making clear the law on PBI "as it stands.”

The statement aims to clarify existing rules for the estimated 3200 PBIs in Australia, most of which benefit from special tax status.

Charities with PBI status may be eligible to be endorsed as deductible gift recipients (DGRs) by the Australian Taxation Office, allowing them to receive tax deductible donations.

The DIS makes clear the current law while the ACNC waits on the results of a Federal Court challenge.

The ACNC acknowledged those guidelines could change depending on the outcome of the court challenge by LGBTQI+ organisation Equality Australia, which is fighting to be classified as a PBI.

Equality Australia applied for PBI status to reflect the nature of its advocacy and to “streamline" donations.

To qualify, it needed to demonstrate “relief of distress” and show that members of its LGBTIQ+ community were “in need of benevolence.”

The ACNC earlier this year rejected the organisation’s bid to change its existing charity sub-category from “advancing public debate”.

The ACNC ruled Equality Australia had a “non-benevolent” purpose of engaging in advocacy to agitate for law reform and social change.

Equality Australia appealed the decision, but the Administrative Appeals Tribunal (AAT) ruled in favour of the ACNC, prompting Equality Australia to take the matter to the Federal Court.

While that decision is pending, the decision impact statement adds to a “Commissioner's interpretation statement“ issued in August.