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Whether an organisation is benevolent depends on the nature of its activities and the circumstances of the person to whom its activities are directed.

A public benevolent institution is defined as one which: a. has as its object, the relief of poverty, sickness, suffering, distress, misfortune, destitution or helplessness; b. is carried on without purpose of private gain for particular persons; c. is established for the benefit of a section or class of the public; d. the relief is available without discrimination to every member of that section of the public which the organisation aims to benefit; and e. the aid is given directly to those in need. (See Perpetual Trustee Company Limited v F C of T (1931) 45 C L R 224; Australian Council for Overseas Aid v F C of T 80 ATC 4575, 11 ATR 343 and Australian Council of Social Services Inc & Anor v Commissioner of Pay-roll Tax (N S W) 85 ATC 4235, 16 ATR394).

The decision in The Commissioners for Special Purposes of the Income Tax v John Frederick Pemsel 1891 AC 531; 3 TC 53 is authority for the view that a charitable organisation must fall under one of the following heads: a. for the relief of poverty; b. for the advancement of education; c. for the advancement of religion; or d. for other purposes beneficial to the community and not falling under any of the preceding heads. Therefore, an organisation whose activities are charitable is not a public benevolent institution unless it also meets, among other things, the definition in paragraph 3.