A New Dawn for Public Benefit Organizations (PBOs) in Kenya

The Public Benefit Organizations Act, 2013 (PBO Act) has officially replaced the Non-Governmental Organizations Coordination Act, CAP 134 (NGO Act). This change, as outlined in the Kenya Gazette Supplement No. 100, under Legal Notice No. 78, was enacted by the Cabinet Secretary for Interior and National Administration, Hon. Kithure Kindiki. The PBO Act comes into effect today, May 14, 2024.

Public Benefit Organizations Act, 2013: From Inception to Implementation in 2024

The Public Benefit Organizations Act, 2013 was passed by Parliament in December 2012 and received approval from former President Mwai Kibaki in January 2013. Despite its passage, the Act remained inactive until May 9, 2024. On this date, the Cabinet Secretary for Interior and National Administration exercised the powers granted by Section 1 of the PBO Act, designating May 14, 2024, as the date for its implementation.

 

Public Benefit Organizations Act, 2013: A Detailed Overview and Analysis

The Public Benefit Organizations Act, 2013 (PBO Act) defines a “public benefit organization” (PBO) as a voluntary grouping of individuals or organizations, which can be membership-based or non-membership-based, and is characterized by being autonomous, non-partisan, and non-profit. According to the PBO Act, a PBO must:

1. Be organized and operate locally, nationally, or internationally.
2. Engage in public benefit activities in any of the areas outlined in the Sixth Schedule.
3. Be registered as such by the Authority.

Key Enhancements Under the PBO Act:

1. Introduction of the Public Benefit Organizations Regulatory Authority:
   • The Authority, under Section 34, is responsible for registering and de-registering PBOs, advising the government on their activities, maintaining the register, reviewing annual reports, ensuring compliance, and providing advice and training.
2. Clear Guidelines for Registration:
   • Section 8 specifies requirements for registration, including necessary documentation for applications, registration criteria for international NGOs as PBOs, and constitutional information for PBOs.
3. Defined Timelines for Registration Processing:
   • Section 9 mandates the issuance of certificates within 60 days of application receipt, providing more clarity than the NGO Act.
4. Reduced Administrative Discretion in Registration:
   • The Act requires the Authority to notify applicants in writing if their application is unsatisfactory, detailing reasons and providing up to 30 days to comply, promoting transparency compared to the NGO Act.
5. Establishment of the Public Benefit Organization Disputes Tribunal:
   • Section 50 creates the Tribunal to handle complaints and appeals related to the Act, offering a non-judicial resolution mechanism.
6. Formation of Self-Regulation Forums:
   • Section 20 allows organizations to form forums for self-regulation, tasked with developing and enforcing conduct standards.
7. Creation of the National Federation of Public Benefit Organizations:
   • This Federation serves as an umbrella entity for registered PBOs and self-regulation forums, monitoring performance and advising the Authority.
8. Provision of Government Support:
   • The Second Schedule outlines government support including tax exemptions, incentives for donations, direct financing, preferential public procurement treatment, and access to training.

Potential Challenges Under the PBO Act:

1. Complex Registration Process:
   • The detailed requirements in Section 8 may result in a lengthy and complex registration process.
2. Uncertain Registration Costs:
   • The registration fee is yet to be prescribed, adding uncertainty to the registration costs.
3. Tedious Financial Reporting Requirements:
   • Section 30’s requirement for maintaining proper books and preparing annual statements with independent auditor opinions could be burdensome.
4. Notification of Organizational Changes:
   • Section 8(8) requires notification to the Authority within 60 days of changes in membership, governing body, or constitution, which may be tedious for organizations.

We hope this overview clarifies the implications of the Public Benefit Organizations Act, 2013. For specific legal advice or further information on compliance, please contact us at info@wka.co.ke or visit our website www.wka.co.ke. You can also reach us at +254 798 03 580 or visit our Nairobi Hub at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.