Experience shows that most clients associate public interest activities with the status of a public interest organization (PIO). However, this is a radical simplification, as the two institutions do not necessarily have to coexist.
Public Interest Activities – Who Can Conduct Them?
First, it is essential to explain what fundamentally constitutes this type of activity. A succinct definition includes three of its fundamental characteristics: public interest activities:
Thus, first and foremost, the social utility of the activity is decisive. Secondly, the activity can be carried out by organizations that are not, among others, units of the public finance sector or legal entities of the state and that do not pursue profit-making goals. Thirdly, the activity must focus on public tasks, a long list of which is outlined in Article 4 of the Public Interest Activity Act (i.e., social assistance, charitable activities, support for education, culture, art, and sports).
It is important to note that conducting public interest activities by an NGO does not automatically make this entity a public interest organization.
Paid Public Interest Activities vs. Economic Activities
Public interest activities can be paid or unpaid. Unpaid public interest activities occur naturally when the organization receives no remuneration from third parties. Paid public interest activities, on the other hand, apply to each of the following four situations, i.e., when the organization:
Very Important: Revenues from paid activities can only be used to conduct public interest activities. An economic activity and a paid public interest activity cannot be equated in any case. Certainly, they may be carried out in parallel by the same entity, but they remain distinct from one another. The management of a paid activity (that is not an economic activity) can be profitable for an organization from a fiscal and accounting perspective – it is generally simpler and less costly organizationally.
When does a public interest activity become an economic activity? Generally, when the remuneration obtained exceeds the costs of the activity (appearance of financial profits), or when the average monthly remuneration of a person employed in the statutory activity during the financial year exceeds three times the average monthly remuneration in the corporate sector. In other words, the organization must declare the commencement of commercial activity as soon as the aforementioned conditions are met.
Status of Public Interest Organization (PIO)
NGOs can apply for PIO status after meeting a number of conditions, the most important of which are:
Obtaining nonprofit organization status results in additional obligations but also privileges. Regarding obligations, they mainly concern the organization’s accounting and the need to submit relevant reports on its activities.
However, the most important privileges of public interest organizations are:
Public Interest Activities Are Not Necessarily Nonprofit Organizations
In conclusion, it is essential to distinguish between public interest activities (paid or unpaid) and the status of a public interest organization. In practice, public interest activities are most often carried out by foundations and associations. Indeed, their activities focus on socially useful areas and are not conducted for profit-making purposes.
The status of a nonprofit organization, on the other hand, is granted to organizations that meet a number of conditions and comes with additional opportunities and obligations