By Ogada Obila and Joy Kawira
The Public Benefit Organizations (PBO) Act, 2013 officially came into effect on May 14, 2024, repealing the Non-Governmental Organizations (NGO) Coordination Act of 1990. With this change, all previously registered NGOs must now transition to Public Benefit Organizations (PBOs) within a 12-month period to remain compliant with the law.
This new legislation provides a structured legal framework for the establishment, registration, and operation of public benefit organizations in Kenya, enhancing transparency, accountability, and government support for the sector.
Key Highlights of the PBO Act
1. NGOs to PBOs: A Change in Identity
Under the new law, NGOs will now be officially referred to as Public Benefit Organizations (PBOs). According to Section 5(1) of the Act, a PBO is defined as:
“A voluntary membership or non-membership grouping of individuals or organizations that is autonomous, non-partisan, non-profit-making, and operates locally, nationally, or internationally while engaging in public benefit activities and is registered as such by the Authority.”
2. Mandatory Registration Requirements
To register as a Public Benefit Organization (PBO), local entities must submit an application to the Public Benefits Organizations Regulatory Authority, along with:
- A constitution and other constitutive documents of the organization.
- Names and addresses of the founders.
- A statement of the public benefit purposes of the organization.
- A description of the principal activities the organization will engage in.
- The postal and physical address of the principal place of business.
- Payment of the prescribed registration fee.
For international organizations seeking PBO registration in Kenya, additional requirements include:
- Proof of legal registration in another country.
- The organization’s address in Kenya.
- A written statement from the headquarters’ representative detailing the purpose and intended activities in Kenya.
- At least one-third of the directors must be Kenyan citizens and residents.
Upon approval by the Authority, the organization receives a Certificate of Registration within 60 days. If the application is rejected, the applicant must be informed within 14 days, with the right to appeal the decision before the Public Benefits Organizations Dispute Tribunal.
3. Establishment of the National Federation of PBOs
The Act establishes a corporate umbrella body called the National Federation of Public Benefits Organizations. This federation:
- Represents the interests of PBOs.
- Promotes self-regulation and sectoral governance.
- Coordinates and monitors compliance with the Act.
4. Role of the Public Benefit Organizations Regulatory Authority
The Public Benefit Organizations Regulatory Authority is tasked with:
- Registering and de-registering PBOs.
- Maintaining an official registry of recognized public benefit organizations.
- Interpreting and enforcing the national policy on PBOs.
- Receiving and reviewing annual reports from PBOs.
- Advising the government on sectoral matters.
5. Establishment of the Public Benefit Organizations Disputes Tribunal
The Act also creates a Public Benefit Organizations Disputes Tribunal, appointed by the Chief Justice and approved by the National Assembly. The Tribunal is responsible for:
- Hearing complaints related to violations of the PBO Act.
- Handling appeals concerning registration decisions or regulatory disputes.
Implications for NGOs Under the Former NGO Coordination Act
Organizations previously registered as NGOs under the NGO Coordination Act will now be classified as PBOs but must formally re-register within 12 months. NGOs that were previously exempt from registration must apply for PBO registration within three months of the Act’s commencement.
Failure to meet these deadlines will result in loss of PBO status and associated legal benefits.
Benefits of Registering as a PBO
Registered PBOs gain access to several advantages, including:
- Tax exemptions on specified categories.
- Direct government financial support.
- Preferential treatment in public procurement and contract bidding.
- Legal recognition for operations within Kenya.
Conclusion
The Public Benefit Organizations Act, 2013 marks a significant regulatory shift for NGOs in Kenya. To continue operating legally, all existing NGOs must transition to PBO status within the prescribed timeframes. Compliance ensures legal recognition, financial incentives, and operational legitimacy under the new regulatory framework.
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