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Robust law for charitable sector benefits all
Charities are now allowed to engage in income-generating activities through the establishment of social economic enterprises.
What you need to know:
- The Public Benefit Organisations (PBO) law makes registration of organisations simpler, convenient, non-restrictive and affordable.
- The law makes it easier for stakeholders to access information possessed by the regulator or individual PBO without restrictions.
Kenya’s regulatory regime for charitable organisations since independence has arguably been among the few in the region considered progressive. Until 1992, when the Non-Governmental Organisations Co-ordination Act of 1990 was operationalised, charitable institutions were loosely registered under various ministries or departments and were hardly regulated.
However, this law was viewed by many to be deficient in some key areas. It lacked some key ingredients of best practices such as protection of charities’ assets, public interest safeguards, transparency and accountability mechanisms, and a robust self-regulation mechanism. In fact, the Act did not expressly provide for an appeals mechanism in cases of declined registrations or regulatory disputes. Unsuccessful applicants for registration were reduced to mere recipients of information.
In my view, Parliament addressed most of these deficiencies when it passed the Public Benefit Organisations (PBO) Act in 2013, which was operationalised last year following a directive by President William Ruto.
Easier to access information
Perhaps one of the most progressive provisions of the PBO law is the fact that a proposed charity will be deemed to have been duly registered if the Authority fails to list it within the set time. Following the automatic registration, the regulator is compelled to include the new organisation in the charities register.
A keen analysis of the registration provisions of the PBO Act leaves no doubt as to its strict conformity to Article 36 of the Constitution on freedom of association. Article 36 (3) prohibits authorities from withholding or withdrawing registrations unreasonably and requires them to charge reasonable fees.
The PBO law makes registration of organisations simpler, convenient, non-restrictive and affordable.
The law makes it easier for stakeholders to access information possessed by the regulator or individual PBO without restrictions. For example, the register can be inspected by any interested person, which improves accountability. Where charges are levied, the law prescribes that they should be reasonable. This means it will be easier to access information. This provision could improve public trust in charities, thereby leading to increased support from local philanthropists, which is welcome in view of dwindling aid from international donors.
Efficiency in service provision
Further, the Act empowers the regulator to institute an inquiry against rogue organisations, a provision that could help mitigate against regulatory breaches, poor governance, fraud and any other form of abuse. Most importantly, the thousands of PBO beneficiaries in whose name donor support is sought are protected by this section of the law.
Charities are now allowed to engage in income-generating activities through the establishment of social economic enterprises. This is a major breakthrough for the organisations, it could be critical in the quest for sector sustainability. Tax exemptions and other incentives for charities are now more predictable and facilitative in the new legal framework. Collaboration among PBOs and the government and networking within the sector has been given legal backing.
The law requires the regulator to build the capacity of the PBOs for effectiveness and efficiency in service provision by sector players. And the grace period for handing in annual reports and audited accounts has been increased from three to six months.
The PBO law provides a firm foundation for a robust charitable sector that can meet the needs of the poor and the vulnerable.
Dr Kiptoo is the Director-General/CEO of PBORA. [email protected]
