Public Benefits Organizations Act in Kenya: Complete Guide, Recent Developments, and Legal Implications
- Muhoro & Gitonga Associates
- May 14, 2024
- 6 min read
Updated: Nov 12
Table of Contents
Background and Purpose of the PBO Act
Registration and Transition of NGOs to PBOs
Governance and Compliance Requirements
Rights, Benefits, and Obligations of PBOs
Recent Developments and High Court Judgement
The Otieno v Attorney General Case (2024–2025)
Data Protection and Donor Privacy
Draft PBO Regulations and Future Reforms
Legal Compliance Checklist for PBO Boards
Implications for Donors and Partners
Enforcement, Penalties, and Dispute Resolution
Strategic Guidance for NGOs and Lawyers
PBO Compliance Checklist (2026 Edition)
1. Introduction
The Public Benefit Organizations Act (PBO Act) is Kenya’s primary legal framework governing nonprofit and charitable organizations. It regulates registration, governance, and the benefits available to entities advancing social, educational, environmental, and humanitarian objectives.
Following its long-awaited implementation in 2024 and several landmark judgements in 2025, the PBO Act now defines the operational landscape for NGOs, foundations, and trusts in Kenya.
2. Background and Purpose of the PBO Act
The PBO Act was enacted in 2013 to replace the outdated NGO Coordination Act of 1990. It was designed to modernize oversight, enhance accountability, and harmonize the regulation of Kenya’s vast nonprofit sector.
Its purpose is to promote transparency, protect the freedom of association, and ensure that public funds and donor contributions are properly utilized. The Act provides a legal identity for organizations that operate for public benefit rather than private gain.
3. Key Provisions of the PBO Act
The PBO Act introduces several transformative elements:
Establishment of the Public Benefit Organizations Regulatory Authority to oversee registration and compliance.
Recognition of public benefit organizations as a unified category for nonprofits, trusts, and associations.
Creation of the Federation of PBOs to promote self-regulation.
Annual reporting and financial disclosure obligations.
Eligibility for tax benefits, public contracts, and partnerships upon registration.
These provisions mark a shift toward more structured and transparent civil society governance.
4. Registration and Transition of NGOs to PBOs
All NGOs previously registered under the NGO Coordination Act automatically transitioned to PBOs when the new law came into force. Initially, the State required all NGOs to reapply for registration under the PBO Act, but this requirement was challenged in court.
The High Court ruled in 2025 that mandatory re-registration was unconstitutional, affirming that NGOs remain validly recognized under the new framework. Organizations must, however, align their constitutions and operational policies with the provisions of the Act to fully enjoy its benefits.
5. Governance and Compliance Requirements
Governance under the PBO Act is built on transparency, integrity, and accountability. Each PBO must:
Have a competent Board or Council with clear decision-making procedures.
Hold at least one annual general meeting.
Maintain updated records, including minutes and financial statements.
Submit annual returns to the PBO Authority.
Comply with anti-money laundering and counter-terrorism financing rules.
Boards are encouraged to adopt written policies on conflicts of interest, internal audits, and whistleblower protection.
6. Rights, Benefits, and Obligations of PBOs
Once registered, PBOs gain numerous benefits, including:
Legal personality and the ability to own property.
Access to tax exemptions under the Income Tax Act and Value Added Tax Act.
Recognition by donors and the government as credible development partners.
Access to public funding and partnership opportunities.
However, these privileges come with strict compliance requirements such as reporting, ethical fundraising, and financial transparency.
7. Recent Developments and High Court Judgements
In 2025, the High Court delivered a pivotal judgment addressing constitutional concerns within the PBO Act. The Court struck down provisions that required compulsory membership in a national federation, mandatory re-registration of NGOs, and the disclosure of personal donor data.
The judgement affirmed that the State must regulate nonprofits in a manner consistent with the Bill of Rights, particularly the rights to privacy and freedom of association. This has since altered how the PBO Authority and Cabinet Secretary implement the Act.
8. The Otieno v Attorney General Case (2024–2025)
In Otieno & 2 others v Attorney General & another; Katiba Institute & 9 others (Interested Parties) (Petition E519 of 2024) [2025] KEHC 8557 (KLR) (Constitutional and Human Rights) (30 April 2025) (Judgment), several civil society organizations challenged the implementation of the PBO Act. The petitioners argued that certain provisions violated constitutional freedoms.
The Court held that:
NGOs registered under the repealed law automatically became PBOs.
Mandatory re-registration was unconstitutional.
The government must respect constitutional rights while implementing the Act
This judgement continues to guide the interpretation and enforcement of nonprofit regulations in Kenya.
9. Data Protection and Donor Privacy
The PBO Act intersects with Kenya’s Data Protection Act, 2019, particularly regarding the collection and sharing of donor and beneficiary information.
The High Court affirmed that donor and member data are protected under the right to privacy. PBOs must now:
Limit the disclosure of donor names and contact details.
Store personal data securely and restrict access to authorized officers.
Obtain consent before publishing identifiable information.
Report data breaches to the Office of the Data Protection Commissioner.
Implementing a clear data protection policy is now a mandatory governance requirement.
10. Draft PBO Regulations and Future Reforms
In 2025, the Ministry of Interior and the PBO Authority released Draft Public Benefit Organization Regulations for stakeholder consultation. These regulations are intended to:
Clarify registration procedures.
Define categories of PBOs (local, international, umbrella).
Outline tax exemption processes and inspection rules.
Set dispute resolution procedures between the Authority and PBOs.
The final regulations, expected later in 2025, will complete the operational framework of the Act.
11. Legal Compliance Checklist for PBO Boards
Every board should ensure the following steps are completed annually:
Confirm that your registration certificate and constitution are compliant with the PBO Act.
File annual returns and audited financial statements on time.
Hold at least one properly minuted annual general meeting.
Review donor agreements for compliance with the Data Protection Act.
Maintain clear internal financial controls.
Train staff on governance and record-keeping.
Ensure directors declare and manage conflicts of interest.
Keep your organization’s mission within the objects listed in the constitution.
12. Implications for Donors and Partners
Donors and funding partners must adjust their compliance practices in light of the new legal landscape. While transparency remains essential, privacy concerns require funders to avoid requesting sensitive personal data.
Due diligence should focus on:
Legal registration certificates.
Recent audit reports.
Tax exemption documentation.
Board governance and accountability systems.
Collaborations between donors and compliant PBOs are now encouraged through structured public-private partnerships.
13. Enforcement, Penalties, and Dispute Resolution
The PBO Authority has investigative and enforcement powers, including suspension or cancellation of registration for non-compliance. However, enforcement must align with constitutional rights following the 2025 court decision.
Disputes can be resolved through the PBO Dispute Resolution Committee or directly through judicial review in the High Court. PBOs should document all regulator communications and seek legal advice before taking any administrative action.
14. Strategic Guidance for NGOs and Lawyers
Maintain up-to-date compliance files and registration certificates.
Monitor ongoing appeals and legislative amendments.
Engage with the PBO Authority constructively through formal correspondence.
Adopt a privacy-first approach in donor communications.
Seek legal assistance when responding to inspection or compliance notices.
Law firms advising NGOs should also help clients develop template constitutions, compliance manuals, and privacy policies aligned with current Kenyan laws.
PBO Compliance Checklist (2026 Edition)
Area | Key Requirement | Action Point |
Legal Status | Registered under the PBO Act or transitioned from NGO Coordination Act | Keep valid certificate and registration documents |
Governing Documents | Constitution or Trust Deed aligned with PBO Act | Review and amend clauses on objectives, dissolution, and membership |
Governance | Board structure, meetings, and policies | Hold at least one AGM; adopt board charters and conflict policies |
Financial Management | Annual audit and transparent accounting | Engage licensed auditor; file returns with Authority |
Reporting | Annual report, minutes, and returns | Submit within prescribed timelines |
Data Protection | Compliance with Data Protection Act | Develop privacy policy and secure data storage |
Donor Relations | Transparency and ethical fundraising | Disclose funding sources responsibly; avoid data breaches |
Tax Compliance | Apply for exemptions where applicable | Keep KRA clearance and compliance certificates |
Communication | Stakeholder and public engagement | Maintain accurate website and reporting transparency |
Legal Advisory | Continuous compliance review | Retain legal counsel for updates and training |
This checklist can be printed and used by PBO boards during internal compliance reviews or annual audits.
16. Conclusion
The Public Benefit Organizations Act marks a new era for civil society in Kenya. With its full implementation, judicial clarifications, and upcoming regulations, it promises to strengthen accountability while safeguarding fundamental freedoms.
Organizations must now strike a careful balance between transparency and privacy, ensuring compliance without compromising donor trust. Engaging qualified legal counsel and adopting robust governance systems will ensure long-term stability and credibility under the evolving PBO regime.
17. Frequently Asked Questions
1. Do NGOs need to re-register under the PBO Act?
No. NGOs registered under the old law are automatically recognized as PBOs.
2. What is the impact of the 2025 High Court Judgement?
The Court invalidated certain unconstitutional provisions, ensuring automatic recognition of existing NGOs and greater data privacy protections.
3. Are PBOs eligible for tax benefits?
Yes. PBOs can qualify for tax exemptions once registered and approved by the Kenya Revenue Authority.
4. How can a PBO ensure data compliance?
By developing a privacy policy, limiting access to personal data, and training staff on Kenya’s Data Protection Act.
5. What should NGOs do now?
Update their constitutions, ensure timely filing of returns, and implement the compliance checklist provided above.
For more information, please consult the Public Benefits Organizations Act.
