Non-Governmental Organisations (“NGOs”) in Kenya are governed by the provisions of the Non-Governmental Organizations Co-ordination Act, 1990 (the “NGO Act”) and the Non-Governmental Organisations Co-ordination Regulations, 1992 (the “NGO Regulations”). The Public Benefit Organisations Act, No. 18 of 2013 (the “PBO Act”) passed in 2013 is not yet in force and therefore has no force of law.
It is instructive to note that while registration is not mandatory under the PBO Act, Section 10(1) of the NGO Act makes it mandatory for all charitable/non profit organisations operating in the sectors outlined under Section 2 of the Act, namely, “the promotion of social welfare, development charity or research in the areas inclusive of, but not restricted to, health, relief, agriculture, education, industry and the supply of amenities and services” to register as NGOs under the NGO Act.
Section 22(1) of the Act provides that it is an offence for any person to operate an NGO in Kenya without registration under the NGO Act. Upon conviction, such person is liable to a fine not exceeding Ksh. 50,000/- (approx. US$ 500/-) or to imprisonment for a term not exceeding eighteen (18) months, or both.
Regulation 25 of the NGO Regulations further provides that upon registration as an NGO, the entity ceases to exist under any other law. Therefore, all previous registrations under other laws fall away and are of no legal effect.
Since the enactment of the NGO Act in 1990, there has been no strict enforcement of the above provisions by the NGO Board until now. As a result, many charitable/non profit organisations have been operating under registrations obtained through other laws such as Branches of Foreign companies and Companies Limited by Guarantee under the Companies Act, Trusts under the Trustees Perpetual (Succession) Act and Societies under the Societies Act. Branches of foreign companies and Trusts are the most common forms of registration used by such organisations.
We have lately noticed a determined effort by the NGO Board to reclaim its statutory mandate over the NGO sector by requiring entities operating outside the NGO Act to seek registration under the Act. Some recent examples that are in the public domain include International Foundation for Electoral Systems (“IFES”) and Africa Center for Open Governance (“AFRICOG”).
We are also aware that that the Department of Immigration Services has stopped issuing work permits to charitable/non profit organisations registered outside the NGO Act by demanding that such organisations must obtain prior clearance from the NGO Board notwithstanding the fact that they are not registered as NGOs.
We therefore advise clients whose activities fall within the definition of an NGO as defined above to seek registration under the NGO Act. Once the PBO Act is operationalised (and subject to such amendments as may be enacted), a decision can be made whether to remain in or opt out of the regulatory regime