The Senate is set to consider the Public Fundraising Appeals Bill, 2024, aimed at bringing transparency, accountability, and regulation to fundraising activities.
This proposed legislation, introduced by the Senate Majority Leader Aaron Cheruiyot is currently under review by the Senate’s Standing Committee on Labour and Social Welfare.
If passed by the Senate it will replace the Public Collections Act, which has been in place since 1960.
The Public Fundraising Appeals Bill, 2024, sets out to establish strict regulatory mechanisms governing how fundraising appeals are conducted across the country.
The Bill is particularly focused on curbing corruption and mismanagement that have plagued public fundraising initiatives in the past.
This proposal comes in response to concerns about fraudulent activities, misuse of funds, and the coercive nature of some fundraising appeals, commonly known as harambees in Kenya.
Under the new bill, fundraising appeals will be categorised into public and private appeals.
Public appeals involve requests made to the general public, while private appeals are limited to requests made within a family or to specific relatives.
The bill outlines that any entity, whether an individual or a corporate body, intending to conduct a public fundraising appeal must obtain a permit.
This permit must be sought at least 14 days before the scheduled fundraising event, and all applications will be vetted by the Cabinet Secretary for Social Development or County Executive Committee Member in charge of the docket.
To enhance accountability, the bill mandates the maintenance of detailed financial records by those conducting fundraising activities.
These records should include information on the contributors, amounts raised, and expenditure details.
Moreover, the administrative expenses related to fundraising are capped at 5% of the total amount raised, ensuring that a majority of the funds directly benefit the intended cause.
The bill imposes strict restrictions on the involvement of state officers and public officials in fundraising activities.
It explicitly prohibits state officers from participating in or conducting public fundraising appeals during their tenure.
Additionally, individuals aspiring for public office are barred from engaging in public fundraising appeals within three years preceding a general election.
Violations of these provisions could result in fines of up to Sh5 million or criminal charges.
The Public Fundraising Appeals Bill, 2024, also introduces new requirements related to income tax for individuals and entities involved in fundraising activities.
One of the key provisions is that individuals who receive funds as beneficiaries of a fundraising appeal must declare these contributions in their income tax returns.
This rule also applies to those receiving funds on behalf of a beneficiary, particularly if the beneficiary is a child.
Furthermore, contributors to a fundraising appeal are required to specify the source of their contributions.
This measure is designed to prevent money laundering and other illegal financial activities by ensuring that all donations are traceable and legitimate.
The oversight of fundraising activities will be a shared responsibility between the Cabinet Secretary for Social Development and County Executive Committee Members.
Their duties include issuing permits, conducting audits, investigating complaints, and maintaining a national register of licensed fundraising entities.
They are also tasked with promoting awareness and educating the public on proper fundraising practices.
Following its first reading in the Senate on August 1, 2024, the bill will undergo public participation facilitated by the Senate’s Standing Committee on Labour and Social Welfare.
The public is invited to present their views and recommendations before the committee submits its report to the Senate by September 1, 2024.
The outcome of this process will determine the future of fundraising regulation in Kenya, potentially setting a precedent for other forms of public solicitation.
The Public Fundraising Appeals Bill, 2024, includes specific exemptions where the requirements of the bill do not apply.
Here are the key exemptions outlined in the bill:
The Public Fundraising Appeals Bill, 2024, outlines specific penalties for various offences to ensure compliance with the regulations.
A state officer or appointed public officer who participates in or conducts a public fundraising appeal during their term of office will face a fine not exceeding Sh5 million.
Any individual intending to vie for public office who participates in a public fundraising appeal within the three years preceding a general election will be liable for a fine not exceeding Sh5 million. Such participation is also considered an election offence.
For offences committed under the bill where no specific penalty is provided, individuals may face a fine not exceeding Sh2 million, imprisonment for a term not exceeding three years, or both.
