NAIROBI, Kenya – Kenya’s nonprofit sector has been granted a one-year extension to comply with sweeping legal reforms under the newly operationalised Public Benefit Organisations (PBO) Act, giving thousands of NGOs until May 13, 2026 to align their governance, financial reporting, and registration processes with the new law.
The reprieve, announced Thursday by the Public Benefit Organisations Regulatory Authority (PBORA), pushes the original deadline from May 2025 to May 2026, in what the government says is a move to ensure a smooth and inclusive transition from the outdated NGO Coordination Act of 1990.
“This Act ushers in a new regulatory framework that supports a dynamic civil society ecosystem while reinforcing mechanisms for accountability, sustainability, and transparency,” said PBORA Director General Laxmana Kiptoo during a media briefing in Nairobi.
According to PBORA, only 4,000 out of the 14,000 registered NGOs in Kenya have so far complied with the PBO Act requirements. Kiptoo urged the remaining organisations to use the extension wisely.
“It is shocking that out of the 14,000 NGOs we have registered, only 4,000 are compliant,” he said. “It is important that they comply with the law that is being operationalised for the benefit of all.”
New Legal Era for Civil Society
The operationalisation of the PBO Act on May 14, 2024, marked a turning point in nonprofit regulation, following more than a decade of delays caused by legal and bureaucratic wrangling.
President William Ruto officially announced the commencement of the law during the UN Civil Society Conference in Nairobi.
Under the new regime, all NGOs will automatically transition to the PBO framework but must apply for formal re-registration within one year from the Commencement Date.
Failure to do so within 30 days of receiving official notice from the authority will lead to loss of PBO status.
Organisations previously exempt under the old law are now required to register within three months, while international PBOs must appoint a local Kenyan representative to receive official communication.
Groups that operate from Kenya but do not directly implement programmes locally may seek special permits instead of full registration.
The Act also introduces benefits for compliant organisations, including tax exemptions, access to government funding, and preferential procurement treatment.
It also permits income-generating ventures, provided the profits are reinvested in the organisation’s mission.
New Standards for Financial Accountability
In a significant shift, all PBOs—regardless of size—must now submit both general and audited financial reports within six months after the close of their financial year.
This replaces the previous requirement, which only applied to organisations receiving over Sh1 million in funding.
“In the previous Act, PBOs receiving less than Sh1 million only filed a general report,” said Mercy Soy, PBORA’s Assistant Legal Affairs Manager. “But with the PBO Act, all PBOs will henceforth file both reports.”
To support implementation, the government and civil society are harmonising two sets of draft regulations through a public participation process set to run from June 19 to July 18, 2025.
The final framework will be submitted to Parliament in August and gazetted later by the Interior Ministry.
Independent Oversight and Sector Reform
A key innovation in the new law is the creation of an independent oversight body—PBORA—which replaces the NGO Coordination Board.
The authority now has the mandate to register organisations, monitor compliance, advise the government on policy, and investigate fraud.
The Act also introduces a PBO Disputes Tribunal to handle appeals and complaints, and establishes a National Federation of Public Benefit Organisations to coordinate registered entities and promote self-regulation.
Crucially, the new law opens the door to more groups by broadening eligibility: community-based organisations, trusts, and faith-based groups can apply for public benefit status without changing their legal identity.
To ensure inclusive rollout, PBORA will conduct public forums across all 47 counties between June and July 2025, alongside webinars, online consultations, and accessible materials in local languages and sign language.
Sector with Economic Muscle
The stakes are high. Kenya’s nonprofit sector employed nearly 80,000 people in the 2022/23 financial year, including over 36,000 salaried Kenyans and 38,000 volunteers.
It also contributed up to 1% of the country’s GDP, according to the Kenya National Bureau of Statistics.
Kiptoo described the implementation phase as “crucial” for setting a strong foundation for governance, transparency, and sustainability in a sector that plays a key role in Kenya’s development landscape.
