In Kenya, there are primarily two legal authorities that oversee the operations of non-profit organizations, namely:
- The Non-Governmental Organization Coordination Board, under the Non-Governmental Organizations Coordination Act, 1990; and
- The Registrar of Societies, under the Societies Act (Cap. 108).
NGOS
An NGO in Kenya is typically registered under the Non-Governmental Organizations Coordination Act, 1990. The legal framework governing NGOs includes:
- The Non-Governmental Organizations Regulations, 1992;
- The Non-Governmental Organizations (Amendment) Regulations, 2018; and
- Applicable laws in Kenya, such as the Companies Act, 2015, among others.
Foundations
A Foundation, on the other hand, can be registered either as a trust under the Trustees (Perpetual Succession) Act (CAP. 164) or as a company limited by guarantee under the Companies Act, 2015. The legal framework governing Foundations depends on the chosen form of registration:
- Trusts Trustees (Perpetual Succession) Act (CAP. 164);
- Trusts of Land Act, 2012; and
- Other applicable laws in Kenya related to trusts.
- Companies limited by guarantee Companies Act, 2015;
- Relevant subsidiary legislation under the Companies Act, 2015; and
- Other applicable laws in Kenya related to companies.
How do I start an NGO or a Foundation in Kenya?
NGOs
The registration process for an NGO typically takes between 4-6 weeks. Registration fees are dependent on the NGO’s particular structure and budget, with a range from KES 180,000 to KES 250,000. The registration fee includes the cost of incorporation, preparation of required documents, and application fees. As earlier mentioned, NGOs are regulated primarily by the Non-Governmental Organizations Coordination Board and must operate in line with the legal requirements set out in the relevant laws.
NGO Organogram
Here is an example of an NGO or Foundation organogram presented in a table format:
| Position | Responsibilities |
|---|---|
| Board of Directors | – Provide strategic direction and guidance to the organization. |
| Chief Executive Officer (CEO) | – Overall management and leadership of the organization. |
| Programs Director | – Oversee the planning, implementation, and evaluation of programs and projects. |
| Operations Director | – Manage day-to-day operations and support functions. |
| Program Managers | – Manage specific programs or projects within the organization. |
| Program Staff | – Work on the ground to execute program objectives. |
| Finance Manager | – Manage financial operations, including budgeting, accounting, and reporting. |
| Human Resources Manager | – Handle recruitment, employee relations, and performance management. |
| Communications Manager | – Develop and implement communication strategies and campaigns. |
| Grants Manager | – Research and secure funding opportunities, manage grant applications. |
| Advocacy Coordinator | – Develop and implement advocacy strategies to advance the organization’s mission. |
| IT Manager | – Manage IT infrastructure and systems. |
| Administrative Assistant | – Provide administrative support to the organization. |
Foundations
For Foundations registered as trusts, the registration process may take an estimated 3-4 weeks, while for Foundations as companies limited by guarantee, it may take approximately 2-3 months.The registration fees for a foundation registered as a trust may range from KES 10,000 to KES 40,000, while fees for a foundation registered as a company limited by guarantee can range from KES 12,000 to KES 30,000. These fees cover document preparation, application fees, and other costs associated with incorporation. Foundations are regulated either by the Registrar of Companies (for Companies limited by Guarantee) or the Registrar-General for trusts (under the Trustees (Perpetual Succession) Act).
What is The Process for Registering an NGO or Foundation in Kenya?
NGOs
The registration process for an NGO in Kenya involves the following steps:
- Reserve the NGO name and obtain a name reservation certificate; File an application with the NGO Coordination Board along with the required documentsp. and fees;
- Obtain a clearance letter from the NGO Coordination Board;
- Register the NGO with the Registrar of Societies, submit the finalized constitution, and pay the registration fee;
- Obtain a certificate of registration from the Registrar of Societies;
- Register for tax and social security obligations with the relevant authorities.
The required documents for registering an NGO include:
- The organization’s constitution;
- Minutes of the first meeting with a resolution to incorporate the NGO;
- Curriculum Vitae and passport photos for the key board members;
- Copies of identification documents (IDs or passports) for the proposed board members;
- Any other relevant supporting documents.
Foundations
For foundations registered as trusts, follow these steps:
- Reserve the Foundation name and obtain a name reservation certificate;
- Draft a Trust Deed outlining the main objectives and governance structure of the Foundation;
- Submit the Trust Deed to the Registrar-General for registration under the Trustees (Perpetual Succession) Act;
- Upon approval, obtain a certificate of registration from the Registrar-General as a registered Foundation;
- Register for tax and social security obligations with relevant authorities.
For foundations registered as companies limited by guarantee, follow these steps:
- Reserve the Foundation name and obtain a name reservation certificate; Draft the Memorandum and Articles of Association for the Foundation, outlining its main objectives and governance structure; File the required documents with the Registrar of Companies, including the Memorandum and Articles of Association and the appropriate application fees;
- Obtain a certificate of incorporation from the Registrar of Companies as a company limited by guarantee;
- Register for tax and social security obligations with the relevant authorities.
The required documents for registering a Foundation, whether as a trust or a company limited by guarantee, include:
- The Foundation’s constitution (Trust Deed for trusts, or Memorandum and Articles of Association for companies limited by guarantee);
- Minutes of the first meeting with a resolution to incorporate the Foundation;
- Curriculum Vitae and passport photos for the key board members;
- Copies of identification documents (IDs or passports) for the proposed board members;
- Any other relevant supporting documents.
What Organization Should You Opt for Between an NGO and A Foundation in Kenya?
When choosing between an NGO and a Foundation in Kenya, it’s essential to consider the main differences, structures, legal requirements, and the purpose for which each type of organization is established. Consider the following factors to determine which organization is best for you:
Primary Objective:
NGOs primarily focus on promoting social, environmental, or economic issues, fostering sustainable change, and addressing inequalities within communities. On the other hand, Foundations devote their resources primarily towards providing grants or funds to support other organizations, scholars, or projects that align with their specific mission.
Registration Process:
In Kenya, NGOs are registered under the Non-Governmental Organizations’ Coordination Act, 1990, while Foundations are registered under the Companies Act or the Societies Act. The process of registering an NGO is comparatively streamlined and shorter on paper but practically the intensive regulation and scrutny may drag the process to from 6 Months to a Year: it takes about 4-6 weeks, whereas registration of a Foundation, particularly if established as a company limited by guarantee, can take up to 2-3 months with little or no obstruction or lag.
Regulatory Framework:
NGOs in Kenya are subject to the Non-Governmental Organizations Coordination Board, which has more stringent regulations and scrutinizes their operations more closely. Foundations, on the other hand, are regulated either by the Registrar of Companies (for companies limited by guarantee) or the Registrar-General (for trusts), typically allowing for more considerable operational freedom and less rigorous regulatory oversight.
Tax Implications:
Both NGOs and Foundations registered in Kenya can apply for taxexemptions under the Income Tax Act. However, NGOs enjoy a more favorable tax treatment, as they can register as Public Benefit Organizations (PBOs), which allows them to access additional tax exemptions and benefits. Foundations registered as trusts or companies limited by guarantee may also apply for tax exemptions, but they may not be able to access the same level of advantages as NGOs registered as PBOs.
Governance and Internal Structure:
NGOs typically have a more structured governance system, requiring a board of directors, an executive committee, and a clear set of rules defined in their constitution. Foundations can opt for a more flexible governance model, but this depends on whether they are registered as a trust or as a company limited by guarantee.
Flexibility and Scalability:
NGOs are generally subject to more rigid compliance and reporting requirements compared to Foundations, which might limit their ability to adapt and scale their operations rapidly. Foundations, especially those registered as trusts, can benefit from greater operational flexibility, making it easier for them to grow and diversify their activities over time.
Considering these factors, it ultimately depends on your organization’s specific goals, size, and scope to determine whether registering as an NGO or a Foundation is the best choice. By carefully assessing your mission, objectives, internal structure preferences, and the long-term vision for your organization, you can make an informed decision to support your organization’s growth, sustainability, and social impact in Kenya.
Conclusion
In conclusion, your choice between registering as an NGO or a Foundation in Kenya largely depends on your organization’s goals, objectives, and preferred governance structure. Carefully consider the registration processes, timelines, costs, regulatory oversight, and legal frameworks of each option before making your decision. Whichever option you choose, it is essential to ensure that your organization complies with all relevant laws and constantly stays updated on any new regulations introduced in Kenya.
The fees above are legal fees capped at our modest rates.