If you’re leading a charity or not-for-profit organisation, you might have heard the term Public Benevolent Institution (PBI). But what does it mean and is it the right fit for your organisation? This article explores what defines a PBI, how it differs from a Health Promotion Charity (HPC) and the key factors to consider when deciding which registration best suits your purpose. 

What is a PBI?

A PBI is a specific type of charity recognised by the Australian Charities and Not-for-profits Commission (ACNC). To qualify, your organisation must meet the following requirements: 

1. Public: Aiming to benefit a significant section of the community. 

1. Benevolent: Focused on relieving poverty, sickness, suffering, distress, misfortune, disability or helplessness. 

1. An Institution: Established with a clear organisational structure and purpose. 

Examples of PBIs include disability support services, aged care providers, housing organisations offering subsidised accommodation and some community care organisations, hospitals and hospices. 

The benefits of being a PBI

Becoming a PBI can unlock several benefits including: 

• Tax Concessions: Eligibility for various tax exemptions and concessions. 

• Deductible Gift Recipient (DGR) Status: Ability to receive tax-deductible donations. 

• Fringe Benefits Tax (FBT) Exemptions: Potential savings on employee benefits. 

• Attracting Support: Enhanced credibility can help in fundraising and attracting volunteers. 

Unlike many other charities, which are either not entitled to Deductible Gift Recipient (DGR) status or only have it for part of their organisation, PBIs are eligible for DGR status across the entire organisation. This means all donations made to them are tax-deductible. 

In addition, very few charities qualify for the Fringe Benefits Tax (FBT) exemption. Most are only entitled to the FBT rebate. The FBT exemption available to PBIs offers significant savings and makes salary packaging arrangements far more tax-effective for employees. 

Is PBI status right for you? 

Not all organisations are suited for PBI status. The ACNC assesses each application based on: 

• Primary Purpose: Your main activities must focus on providing benevolent relief. 

• Connection to Relief: Activities should have a clear link to alleviating need, not just addressing symptoms. 

• Public Benefit: Efforts must aim to assist a significant portion of the community, not just a select group. 

Recent updates to the ACNC’s guidance have clarified that organisations engaged in advocacy or preventative work can qualify as a PBI, provided their activities are closely connected to delivering benevolent relief. 

Health Promotion Charities vs PBI’s

While Public Benevolent Institutions are the most well-known type of charity with access to full tax concessions, Health Promotion Charities (HPCs) are entitled to the same tax benefits, including DGR endorsement, FBT exemptions and other concessions. The key distinction is their purpose: an HPC’s primary objective must be to promote the prevention or control of diseases in humans.  Disease covers both physical and mental illnesses. 

Examples of HPCs include organisations that raise public awareness about a specific disease, its causes and methods of prevention, undertaking medical research related to the disease or provide education and support to carers of affected individuals. Organisations that focus more broadly on promoting healthy lifestyles or general wellbeing initiatives are unlikely to qualify as HPCs. 

Although fewer HPCs are established compared to PBIs, this may reflect lower awareness of the HPC category rather than stricter eligibility requirements.  

If your organisation’s work centres on health education or preventing particular diseases, including mental health conditions, a HPC status may be a better fit than a PBI. 

Next steps

If your organisation is dedicated to supporting those in need or promoting better health outcomes in the community, applying for PBI or Health Promotion Charity (HPC) status could be a strategic step forward.  

Both designations offer significant tax and funding advantages that can strengthen your organisation’s impact and sustainability. Determining which status best fits your purpose depends on whether your primary focus is providing direct benevolent relief or promoting disease prevention and health education.  

For tailored guidance or assistance with the application process, our team can help you navigate the requirements and maximise the benefits available to your organisation.