Q & A
 

Public benefit organizations 

Very often a question occurs what the public benefit organizations are and whether their existence is enabled by our legal regulations. We have tried to give a detailed answer to this question:
The article 12 from the Law for civic organizations and foundations projects an opportunity for the civic organizations and foundations to carry out public authorization. This provision‘s objective is to provide a special status to the organizations, which can give services of wider public benefit.

This privilege of the civic associations and foundations is usually related to tax and customs authorizations, with using budget assets etc.

However, apart from this regulation, one of the most mentioned appendices and changes of the Law for civic associations and foundations is defining public benefit organizations, as well as passing a special law for them.

In order to increase the role of the public benefit organizations (PBO) in the society, to promote their public benefit activities, to promote transparency and reporting, as well as to provide the government with a direction to use the public benefit organizations while purchasing benefit services for the general public, there is a need to pass a special law for the public benefit organizations.

A public benefit activity is any legal activity, which either supports or promotes the public benefit through supporting or promoting one or more activities. According to the model – regulations of the PBO Law which has been prepared by the International Center for Non-profitable Right, several public benefit activities are listed as: amateur athletics, art, help or protection of physical or mentally handicapped people, aid for fugitives, charitable goals, civic or human rights, culture, democracy, ecology and environmental protection, education, ethnicity, poverty decrease, science, social solidarity, social aid and any other activity determined by the Commission for Public Benefit to support or promote public benefit.

PBO is any non-profitable organization (NGO), which is registered according to the appropriate law (civic association or foundation). Determining whether the NGO is organized and managed primarily for being engaged in public benefit activities is going to be based upon the NGO applying for registering and its activities, if they exist.

The factors which should be taken into consideration while determining whether the NGO is organized and managed primarily for engaging in public benefit activities include the following:

a)      That the NGO provides some significant benefit wider to the public and the target group of users while the group is deprived of rights in relation to the population in whole, or the community gains a significant value while providing a special benefit for the target group. (For example, the Commission for Public Benefit should determine that one organization which promotes economic development only in an advanced area would not be qualified as PBO. An organization which promotes economic development in an underdeveloped area in the country, or in the whole country, if the overall population can be considered “underdeveloped”, will have the right of PBO status);

b)      That the NGO provides a significant amount of goods and services on the level or below the level of costs;

c)      All other factors, which imply that the NGO is organized and managed primarily for being engaged in public, benefit activities.


According to the model – rules, a body which determines the public benefit organization’s status is the Commission for public benefit which is established as an independent administrative organ consisting of representatives of the government, the PBO community and the public. The Commission operates as an organ for registration, monitoring and sanctioning. The key benefit of uniting these organs in a specialized commission is the quality and consistency in making decisions by the members of the commission who are experts for PBO.

The PBO can carry out economic activities, but only if the economic activities which are not related to the public benefit activities are not the PBO main activity. The PBO can freely be engaged in research, education, publication and representing all the issues which influence the public interest, including a critic of the political or state activities or some clerk or organ. The organization can also express its views on any issue or politics, which have been debated or can be debated or discussed during a political campaign or elections.

The PBO cannot be engaged in collecting assets or in campaigns for supporting or against a political party, or for naming or an election of a candidate for a public institution, nor it can propose or register candidates for an election of public institution.

General reporting and asking for transparency. Each PBO whose incomes overcome the stated amount of money for the recently past fiscal year, should submit a report on the activities and a financial report to the Commission and the appropriate organs. The reports will also be accessible if the public asks for them for not more than a reasonable sum.

 

Reference: Comment on the law for civic associations and foundations
                   Model – regulations for laws which influence public benefit organizations (ICNL edition)