Insights on the Kenyan Public Benefits Organization Act

The Public Benefits Organisations Act 2013 (the PBO Act) came into force on 14 May 2024. The operationalisation of the PBO Act brings a myriad of changes to regulation of non-governmental organisations and public benefit organisations.

Important definitions of the PBO Act

A Public Benefit Organisation (PBO) is a voluntary membership or non-membership grouping of individuals or organisations, which is autonomous, non-partisan, non-profit making, and which is:

• organised and operated locally, nationally or internationally;
• engages in public benefit activities; and
• is registered as such by the Public Benefit Organisations Authority.

A public benefit activity is an activity that supports or promotes public benefit by:

• enhancing or promoting economic, environmental, social, or cultural development;
• protecting the environment;
• lobbying or advocating on issues of general public interest; or
• advancing the interest or well-being of the general public or a category of individuals or organisations.

Effect on national non-governmental organisations (NGOs) and change of regulator

The Act repeals the Non-Governmental Organisations Coordination Act, 1990 (the NGO Act), the purpose of which was to govern the registration and regulations of NGOs. 

The NGO Act provided for the Non-Governmental Organisations Co-ordination Board (the NGO Board) which acted as the regulator in the NGO sector. The PBO Act constitutes a new regulator, specifically the Public Benefit Organisations Authority (the PBO Authority) which shall take over the functions of the NGO board. 

The functions of the PBO Authority, among others, include:

• registration and de-registration of PBOs;
• maintenance of a register of PBOs with the precise sectors, affiliations and locations of their activities;
• receiving and reviewing annual reports of PBOs;
• advising the government on the activities of PBOs and their role in development within Kenya;
• instituting inquires to determine if the activities of PBOs comply with the PBO Act; and
• providing advice and training to PBOs.

Status of NGOs

NGOs registered under the NGO Act are required to seek registration as PBOs under the PBO Act within one year from 14 May 2024 i.e. by 13 May 2025. Their PBO status will cease to exist if they do not apply for registration under the PBO Act within thirty days after a specific notice has been issued to them by the PBO Authority.

The NGOs that were exempt from registration under the NGO Act are now required to apply for registration under the PBO Act within three months from 14 May 2024.

Registration of public benefit organisations

The PBO Act provides for mandatory registration of all PBOs in Kenya. 

An organisation shall not claim to be a PBO or receive benefits a PBO would enjoy unless it is registered under the PBO Act. Some of the benefits that PBOs enjoy include:

• indirect government support in the form of exemption of specified categories of taxes;
• direct government financing; and 
• preferential treatment in public procurement.

Application for registration as a PBO shall be made to the PBO Authority accompanied by:

• the PBO’s constitution;
• founder’s name and address;
• PBO’s physical and postal address;
• public benefit and principal activities;
• prescribed fee; and
• any other information that the PBO Authority may request. 

The PBO Authority may either approve or reject the application, and where it rejects the application it shall cite reasons.

International public organisations

An organisation which is registered outside Kenya that intends to operate in Kenya shall apply to the PBO Authority for a certificate to operate in Kenya. 

The registered international organisation must:

• ensure that one third of its directors are Kenyan citizens residing in Kenya; and 
• maintain an office in Kenya.

The PBO Act introduces a new requirement for international organisations to have an authorised Kenyan agent who is a Kenyan citizen who is resident in Kenya. This authorised agent is authorised to receive official summons, notices and inquiries on behalf of the international organisation.

The PBO Authority may exempt internal organisations from registration provided that the organisations does not intend to:

• engage in direct implementation of any activity or program in Kenya or operate from Kenya to implement any activities or programs in another country; or
• raise any subscriptions or engage in any other form of fundraising in Kenya

The public benefits organisations tribunal

The PBO Act establishes the PBOs tribunal which shall determine appeals from members of the public or PBOs against the decisions of the PBO Authority and complaints arising out of a breach of the PBO Act.

Conclusion

The PBO Act improves the regulatory framework over PBOs. We anticipate that regulations will be published in the near future to operationalise implementation of the PBO Act and enable compliance.

If you have any questions, please contact Mati Munuve.