Kenya’s Shift in NGO Regulation: Unpacking the Differences Between Non-Governmental Organizations Act and Public Benefits Organization Act

Kenya’s legal landscape for public benefit organizations has undergone significant transformation with the implementation of the Public Benefits Organization Act (PBO Act) in May 2024. This new legislation replaces the Non-Governmental Organizations (NGO) Coordination Act of 1990, marking a crucial shift in how organizations engaged in public benefit activities are regulated and supported in the country. This article delves into the key aspects of both acts, highlighting their differences and similarities, and examines the implications of this change for civil society organizations in Kenya.

 

Evolution of Regulation: From NGO Act to PBO Act

The journey towards the PBO Act began with the introduction of the NGO Act in 1990. The NGO Act aimed at regulating and coordinating the activities of non-governmental organizations operating in Kenya. However, over time, it became apparent that the regulatory framework needed to be more comprehensive and tailored to the evolving landscape of public benefit organizations.

The PBO Act represents a significant advancement in Kenya’s legal framework for civil society organizations. It introduces a more nuanced approach to defining and regulating public benefit activities, reflecting the diversity and complexity of contemporary civic engagement.

 

Definition and Scope of Organizations

One of the primary differences between the two Acts lies in their definitions and scopes of application:

The NGO Act primarily focused on NGOs, which were broadly defined as organizations that were neither part of government nor private enterprises. It covered a wide range of organizations, including those engaged in public benefit activities, but also encompassed entities not necessarily focused on public benefits.

The PBO Act on the other hand introduces a more precise definition of a PBO as an autonomous, non-partisan, and non-profit group organized locally, nationally, or internationally, engaging in public benefit activities. The scope is narrower and focuses exclusively on organizations that are primarily engaged in public benefit activities.

 

Registration Process and Regulatory Authority

The registration processes for organizations under both Acts differ significantly.

Under the NGO Act, organizations had to register with the NGO Coordination Board. The registration process was relatively straightforward but lacked depth in terms of organizational structure and activity verification.

Under the PBO Act, organisations are required to register with the Public Benefit Organizations Regulatory Authority (the “Authority“). The registration process is more rigorous, including thorough vetting of organizational structure, financial transparency, and detailed descriptions of public benefit activities.

 

Tax Exemptions and Benefits

Both Acts offer tax exemptions and other benefits to registered organizations, but the PBO Act provides more comprehensive guidelines:

The NGO Act lacked clear guidelines on tax exemptions and benefits which led to inconsistencies and difficulties in enforcement.

The PBO Act offers tax exemptions specifically for registered PBOs and provides a more structured framework for determining eligibility for various benefits derived from registration.

 

Public Benefit Activities

The PBO Act introduces a more detailed and comprehensive list of activities considered public benefits as opposed to the NGO Act that did not provide a detailed list of eligible activities.

Some of the activities that qualify to be considered as public benefits include enhancing economic, environmental, social, or cultural development; protecting the environment; lobbying or advocating on general public interest issues; or promoting the well-being of the general public or specific categories of individuals or organizations.

 

Implications for Civil Society Organizations

The shift from the NGO Act to the PBO Act has significant implications for civil society organizations in Kenya as follows:

1. Clarity and Specificity: The PBO Act provides clearer guidelines and a more structured framework for organizations operating in public benefit sectors.
2. Increased Scrutiny: The more rigorous registration process under the PBO Act will lead to increased scrutiny of organizations, potentially benefiting those with transparent operations and clear public benefit objectives.
3. Focus on Impact: The act’s emphasis on public benefit activities encourages organizations to focus more intently on measurable impacts and outcomes.
4. Potential Challenges: Smaller organizations or those with less formal structures may face difficulties in meeting the more stringent registration requirements.

 

Conclusion

The transition from the NGO Act to the PBO Act represents a significant evolution in Kenya’s approach to regulating organizations engaged in public benefit activities. While the PBO Act offers a more comprehensive framework for supporting these organizations, it also introduces new challenges and requirements. As the PBO Act continues to be implemented, it will be crucial to monitor its impact on the landscape of civil society organizations in Kenya and to ensure that the benefits of registration are equitably distributed among all types of public benefit organizations.

The PBO Act’s focus on transparency, accountability, and the measurable impact is expected to contribute positively to the overall quality and effectiveness of public benefit activities in Kenya. However, it remains to be seen how organizations will adapt to the new regulatory environment and whether the benefits of registration will outweigh the potential challenges faced by some organizations in meeting the more stringent requirements.

At B M Musau & Co., Advocates LLP, we remain committed to supporting our clients through these evolving regulatory landscapes, providing the necessary guidance and expertise to navigate the complexities of the NGO sector.

Please note that this is a general commentary on public benefit organization law in Kenya and is intended to provide general information. It should not be taken as legal advice. For specific legal concerns or situations, clients should consult with a lawyer from B M Musau & Company, Advocates LLP directly.