Kenya's Public Benefit Organisations Act was passed in 2013. For over a decade, it sat on the shelf — replaced for operational purposes by the NGO Coordination Act of 1990. In May 2024, all of that changed. The PBO Act was operationalised. The NGO Coordination Act was repealed. And every non-governmental organisation in Kenya found itself navigating a new legal framework with significant governance, compliance, and operational implications.
In June 2025, the government published Draft PBO Regulations for public comment. A High Court ruling in the same month created some legal uncertainty — but with parts of that ruling stayed pending appeal, organisations cannot afford to wait for judicial resolution. The compliance deadline is 13 May 2026. That is not far away.
This article explains what the PBO Act means for your organisation, what the new regulations require, and what you need to do — starting now.
The PBO Regulatory Authority (PBORA) replaces the NGO Coordination Board as the primary regulator of civil society organisations. The shift is not merely cosmetic. PBORA has significantly expanded powers compared to its predecessor: registration authority, monitoring and evaluation, compliance enforcement, investigation, and crucially — deregistration.
In December 2024, PBORA announced it was moving to cancel the registration of 2,802 NGOs for non-compliance. This is not a threat. It is an active enforcement posture.
The Act also introduces a new regulatory category — the Public Benefit Organisation — which carries specific entitlements (tax exemptions, preferential access to government procurement, recognition in law) and specific obligations (enhanced reporting, governance standards, restrictions on political activity).
In June 2025, the High Court issued a ruling that created important legal developments for NGOs. The court held that existing NGOs automatically transition to PBO status without needing to re-register from scratch. It struck down provisions requiring compulsory disclosure of donor and membership data. It invalidated mandatory membership of the PBO Federation.
This sounds like good news — and in many ways it is. However, the Attorney General has applied for a stay of the ruling pending appeal. Parts of that stay have been granted. The legal position is therefore uncertain, and organisations should not base their compliance planning on a ruling that may be reversed or modified on appeal.
The prudent approach: comply with the Act and draft regulations as they currently stand, while monitoring legal developments. An organisation that has done the governance work required by the Act is in a strong position regardless of how the legal uncertainty resolves.
The draft PBO Regulations published in June 2025 set out the practical compliance framework. The key requirements include:
National PBOs pay KSh 20,000 for registration. International PBOs pay KSh 40,000. Annual returns cost KSh 4,000. These are materially higher than the previous NGO Coordination Board fees and reflect the more substantive regulatory engagement expected.
The regulations prescribe specific requirements for board composition, including minimum board size, independence requirements, and restrictions on staff serving as voting board members. Boards that currently do not meet these requirements will need to be restructured.
Annual returns must include audited financial statements, a programme narrative and impact report, details of all funding received (sources and amounts), and a governance compliance declaration. The reporting standard is significantly higher than what many organisations have historically filed.
Internal financial controls, segregation of duties, and procurement policies meeting defined standards are required. Organisations whose financial management has been adequate for donor compliance but not for the higher PBO standard will need to upgrade their systems.
Here is the dimension that many organisations are not yet taking seriously enough: Kenya's placement on the FATF grey list in February 2024, and its subsequent designation by the EU as a high-risk jurisdiction for AML/CFT purposes in June 2025, has directly affected the regulatory environment for civil society.
The Anti-Money Laundering Amendment Act 2025 gives PBORA new powers to monitor PBOs assessed as being at risk of terrorism financing. International fund transfers to Kenyan NGOs are attracting enhanced scrutiny from correspondent banks. Several NGOs have reported difficulty receiving international wire transfers from European donors because of the EU high-risk designation.
What this means practically: your organisation's financial controls, beneficiary due diligence processes, and fund transfer documentation must be robust enough to withstand enhanced regulatory scrutiny. This is not bureaucratic box-ticking — it is protecting your ability to receive and deploy funds.
Here is a practical sequencing for the compliance work ahead:
The organisations that will benefit most from the PBO Act transition are not those that do the minimum required. They are those that use the compliance process as a catalyst for genuine governance improvement.
A well-governed PBO with strong financial management, an independent and capable board, and robust accountability systems is, by definition, a more attractive partner for the shrinking pool of quality donors navigating the global funding crisis. Compliance and funding resilience are, in the current environment, the same thing