ICNL logo

The International Journal
of Not-for-Profit Law

Volume 8, Issue 2, November 2005

A publication of the International Center for Not-for-Profit Law

Table of Contents

Letter from the Editor

Public Benefit Commissions

The Public Benefit Commission: A Comparative Overview
David Moore

Charity Commission for England and Wales
Richard Fries

Moldovan Certification Commission
Ilya Trombitsky

Armenian Governmental Commission Regulating Charitable Programs
Tatshat Stepanyan


From Elections to Democracy in Central Europe: Public Participation and the Role of Civil Society
Susan Rose-Ackerman

Reinventing Liberia: Civil Society, Governance, and a Nation's Post-War Recovery
J. Peter Pham

The Law of Zakat Management and Non-Governmental Zakat Collectors in Indonesia

The Power Shift and the NGO Credibility Crisis
James McGann and Mary Johnstone

Annus Horribilis for Smaller Nonprofits: Restoring Hope Through Building Donor Resiliency
Charles Maclean and Jim Moore


Understanding Organizational Sustainability Through African Proverbs: Insights for Leaders and Facilitators
By Chiku Malunga, with Charles Banda
Reviewed by Emeka Iheme

- - - - - - - - - -

Download this issue (PDF) | Editorial Board

The Public Benefit Commission: A Comparative Overview

By David Moore1

Fundamental to an active civil society is the right to pursue any legal purpose, including both mutual benefit and public benefit interests. The legal framework for non-governmental, not-for-profit organizations (NGOs) typically permits organizations to be created in different forms and to pursue a broad range of legitimate goals.

Most countries, however, identify a subset of NGOs as deserving a range of state benefits, based on their purposes and activities. By providing benefits, the state seeks to encourage certain activities, usually related to the common good or public benefit. NGOs pursuing such purposes and activities may be given various labels, including “tax-exempt organizations” or “charities” or “public benefit organizations.” Further, although some countries may not explicitly define such status in the law, they nonetheless link state benefits to certain purposes and activities. Here we use the term “public benefit” to refer to this special status – however described in the national context – and the term “public benefit organization,” or PBO, to refer to organizations legally recognized as having this status.

Who decides which organizations qualify for public benefit status? What, if any, discretion is allowed in making this decision? These questions have critical implications for the regulation of public benefit organizations and the entire nonprofit sector. The decision-maker has the authority to grant public benefit status, often the authority to revoke public benefit status, and in some countries the authority to supervise and support the work of public benefit organizations. By granting public benefit status, the decision-maker lays the foundation for distinct regulatory treatment – treatment that entails both benefits (usually tax exemptions) and obligations (more stringent accountability requirements).

There is no single right answer to the question of who should make the public benefit determination. Instead, countries have adopted a variety of approaches. In some countries, this authority is vested in the tax authorities. In other countries, the judiciary or a governmental entity, such as the Ministry of Justice, confers public benefit status. Still others empower independent commissions to decide the question. What makes sense in a given country depends on local circumstances.

One innovative approach is the public benefit or charity commission. Although very few countries have adopted the commission model, it is a source of ongoing interest to countries around the world that are drafting, amending, and refining laws and regulations to govern public benefit organizations or charities. The longest-running and most famous example of the independent commission is the Charity Commission of England and Wales. In Moldova, the 1996 enactment of the Law on Associations established a Certification Commission responsible for recognizing qualified organizations as PBOs. For a third variation on the public benefit commission we turn to Armenia, where a governmental commission qualifies projects – not organizations – as public benefit.

Poland and Latvia offer examples of a different kind of public benefit commission. Poland’s 2003 Law on Public Benefit Activities establishes a Council for Public Benefit Activities. The Council is not the decision-maker, but rather “an opinion, advising and supporting body” for the Ministry of Social Security, the responsible decision-maker. Similarly, the 2004 Latvian Law on Public Benefit Organizations contemplates the creation of a Public Benefit Commission; the Latvian Commission, like its Polish counterpart, acts as an advisory body for the Ministry of Finance, which is the decision-making body.

The following articles provide overviews of the three decision-making commissions in Europe and the neighboring areas of the former Soviet Union: England & Wales, Moldova, and Armenia.2

The overviews highlight the similarities and differences between the three nations' approaches, including the following:

The Role and Purpose of the Commission

The Measure of Independence of the Commission

The Accountability of the Commission


1 David Moore is a Program Director for the International Center for Not-for-Profit Law. This special section on Public Benefit Commissions was made possible through support provided by the U.S. Agency for International Development, under the terms of Award No. EDG-A-00-01-00002-00. The opinions expressed herein are those of the authors and do not necessarily reflect the views of the U.S. Agency for International Development.

2 Also note that Scotland enacted the Charities and Trustees Investment Act in July 2005 (to be effective in 2006), which creates the Scottish Charity Regulator (OSCR). Looking beyond Europe, the New Zealand Charities Commission was established by the Charities Act (2005) (www.charities.govt.nz).


Copyright © 2012 The International Center for Not-for-Profit Law (ICNL)
ISSN: 1556-5157