UNDERSTANDING PBOs, FOUNDATIONS & CHARITABLE TRUSTS IN KENYA
| NO. | PUBLIC BENEFIT ORGANIZATION (PBO) | FOUNDATION | CHARITABE TRUST |
| 1. | A PBO is a group of individuals or organizations, that is autonomous (i.e. is free to act independently), non-partisan, non-profit-making and is engaged in public benefit activities. Public Benefit Activities are activities that supports or promotes public benefit by enhancing or promoting the economic, environmental, social or cultural development or protecting the environment or advocating of issues of general public interest or the interest or well-being of the general public. | A foundation is a society set up for solely charitable purposes and relies on its members contributions or donations to support its activities. It can also be defined as a non-profit organization that is typically established to provide funding and support for charitable, educational, religious, or other philanthropic purposes. These organizations are often endowed with substantial financial resources, which they use to generate income that is then directed towards supporting their designated causes. In essence, foundations act as vehicles for channeling resources towards specific areas of need, contributing to the betterment of society. | A charitable trust is a trust formed for the exclusive purpose of the relief of poverty, the advancement of education, religion or human rights and fundamental freedoms, or the protection of the environment or any other purpose beneficial to the general public. |
| 2. | Public Benefit activities cover activities that promote public benefit in the following areas: legal aid, agriculture, children support, culture, disability, energy, education, environment & conservation generally, gender, governance, poverty eradication, health, housing and settlement, human rights, HIV/AIDS Information, informal sector, old age, peace building, population and reproductive health, refugees support activities, disaster prevention, preparedness and mitigation, relief, pastoralism and the marginalized communities support, water and sanitation, animal welfare, youth support etc. | They are strictly established to offer charitable, educational, religious, or other philanthropic purposes. | They are strictly established for charitable purposes. |
| 3. | They are registered under the Public Benefit Organizations Act,2013 and they must have their own Constitution. | They are registered under the Societies Act (Cap 108) and they must have their own Constitution/Rules. | They are registered under the Trustee (Perpetual Succession Act) Cap 164 and they must have their own Trust deed. |
| 4. | They are regulated by the Public Benefit Organizations Regulatory Authority. And can either be a local PBO (only registered in Kenya) or International PBO (registered outside Kenya and intends to set up an office in Kenya). | They are regulated by the Registrar of Societies. | They are regulated by the Registrar of Companies. |
| 5. | PBOs may qualify for tax exemptions especially if they are engaged in charitable activities. They may also be exempt from import duties for equipment or goods needed for their activities. These benefits are conditional on receiving certification from the Kenya Revenue Authority (KRA). | Foundations may qualify for tax exemptions especially if they are engaged in charitable activities. They may also be exempt from import duties for equipment or goods needed for their activities. These benefits are conditional on receiving certification from the Kenya Revenue Authority (KRA). | Charitable trusts may qualify for tax exemptions if they are engaged in charitable activities. These benefits are conditional on receiving certification from the Kenya Revenue Authority (KRA). |
| 6. | PBOs are required to have a board of at least 5 members (Chairperson, Secretary, Treasurer, & 2 other members) of which a minimum of one-third should be Kenyan residents. The board oversees all activities, ensuring adherence to the organization’s mission of public benefit. | Foundations are required to have a board of at least 5 members (Chairperson, Secretary, Treasurer, & 2 other members) of which a minimum of one-third should be Kenyan residents. | Charitable trusts are required to have at least 2 trustees and Settlors who are natural persons. |
| 7. | PBOs must explicitly operate for the benefit of the public. They are restricted on the types of activities they can engage in. They must focus on social or charitable work that aligns with approved public benefit categories. | Foundations are restricted on the types of activities they can engage in. They must focus on charitable, educational, religious or philanthropic purpose approved. | Charitable trusts are restricted on the types of activities they can engage in. They must focus on charitable purpose for which they were forms. |
| 8. | Upon dissolution, any remaining assets of a PBO must be transferred to another PBO with similar objectives, ensuring continued public benefit. The PBO Act mandates that assets cannot be distributed to founders or members. | Upon dissolution, any remaining assets of a foundation must be transferred to another foundation with similar objectives. | Upon dissolution, any remaining assets of a Trust must be transferred to another trust with similar objectives. |
| 9. | PBOs are eligible for grants and donations from international and local donors, provided they meet donor requirements for public benefit and transparency. | Foundations are eligible for grants and donations from international and local donors, provided they meet donor requirements and transparency. | Trusts are eligible for grants and donations from international and local donors, provided they meet donor requirements and transparency. |
| 10. | PBOs must submit annual reports on activities, finances, and periodic audits to the PBO Regulatory Authority. | Foundation must furnish annual returns and audited accounts to the Registrar. | Trusts must file trust’s annual returns with the Registrar of companies annually. |
| 11. | Registration timeline 120 days | Registration timeline 120 days | Registration timeline within 60 days |
| 12. | Government registration fee local PBO. Ksh. 17,000.00. International PBO Ksh. 31,000.00 | Government registration fee Ksh.6,000.00 | Government registration fee Ksh.11,000.00 |
| REGISTRATION REQUIREMENTS | |||
| 13. | Propose at least 3 names for the PBO, Proposed physical office of the PBO (Building, Floor, room, county), List of at least 5 Members, Members’ ID/Passports, passport size photos, KRA pins, CVs, professional certificate, email addresses, phone numbers, residential addresses and extract of their signatures. Proposed one year budget. Minutes to set up PBO. Constitution. List of counties of operation. 5 Objectives of the PBO. Cover letter requesting for registration. | Propose at least 3 names for the FoundationProposed physical office of the Foundation (Building, Floor, room, county)List of at least 5 members.Members’ ID/Passports, passport size photos, KRA pins, CVs, professional certificate, email addresses, phone numbers, residential addresses and extract of their signatures.Proposed one year budget.Minutes to set up Foundation.Constitution/Rules.List of counties of operation5 Objectives of the FoundationCover letter requesting for registration | Settlors to suggest the name of the trust. Proposed physical office of the Trust (Building, Floor, room, county)List of settlors and trustees.Trustees and Settlors’ ID/Passports, passport size photos, KRA pins, CVs, email addresses, phone numbers and residential addresses.Minutes to set up Trust.Trust deed.Objective of the Trust. |
At A.O. WANGA ADVOCATES we are happy to assist you with all matters relating to PBOs, Foundations and Trusts in Kenya. Contact us on info@aowangaadvocates.com or +254794600191.
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