A recent Federal Court decision has opened up the door for more organisations to access both PBI status, gaining exemption from fringe benefits tax, and Deductible Gift Recipient (DGR) status.
The Full Federal Court of Australia case Commissioner of Taxation v Hunger Project Australia  FCAFC 69 is probably one of the most significant cases in determining what is a "public benevolent institution" (PBI).
The key issue was whether an institution must provide services directly to those in need to be a PBI, or whether an institution that supports other institutions that provide the services can itself be a PBI.
In paragraph 67 the court found that, "Such an institution is capable of being considered to be an institution organised or conducted for the relief of poverty, sickness, destitution and helplessness." So, for example, an institution that supports other organisations deliver services in the relief of poverty, etc, can be classified as a PBI.
The Australian Tax Office has announced it will not be appealing the decision however there is the possibility that the legislation will be altered to reflect the status quo. Clayton Utz, who acted for the Hunger Project in the original case and the appeal, has provided an overview of the decision and its implications for the sector and the ACNC has given this guidance to staff regarding the decision .
Myles McGregor-Lowndes, Director of The Australian Centre for Philanthropy and Nonprofit Studies, QUT, a member of the ACNC Advisory Board and ATO's Not-for-Profit Advisory, says the significance of the decision should not be underestimated and writes here about what might happen next .