Public Fundraising Appeals Bill, 2024: Key Changes and What to Expect
The Senate is preparing to review the Public Fundraising Appeals Bill, 2024, which seeks to enhance transparency, accountability, and regulation in fundraising activities.
This proposed bill, introduced by Senate Majority Leader Aaron Cheruiyot, is now being examined by the Senate’s Standing Committee on Labour and Social Welfare.
Should it be approved, it will replace the outdated Public Collections Act, which has been in effect since 1960.
Key Objectives of the Bill
The Public Fundraising Appeals Bill, of 2024, aims to establish rigorous regulatory standards for conducting fundraising appeals nationwide.
It focuses on addressing issues of corruption and mismanagement that have previously affected public fundraising efforts.
The bill responds to concerns about fraudulent practices, misuse of funds, and the often coercive nature of fundraising appeals, particularly known as Harambee in Kenya.
Provisions and Regulatory Measures
The new legislation categorizes fundraising appeals into public and private categories.
Public appeals are those made to the general public, while private appeals are limited to requests within a family or specific relatives.
Entities wishing to conduct a public fundraising appeal must obtain a permit at least 14 days before the event. All permit applications will be reviewed by the Cabinet Secretary for Social Development or the relevant County Executive Committee Member.
To promote accountability, the bill requires detailed financial records from those conducting fundraising activities, including information on donors, amounts raised, and expenditures.
Administrative costs related to fundraising are capped at 5% of the total amount raised, ensuring that the majority of funds go directly to the intended cause.
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Restrictions and Penalties
The bill imposes strict rules on the participation of state officers and public officials in fundraising activities.
It forbids state officers from engaging in public fundraising appeals during their tenure and prevents individuals seeking public office from participating in such appeals within three years of a general election.
Violations of these provisions could lead to fines of up to Sh5 million or criminal charges.
Role of KRA
The bill also introduces new income tax requirements for individuals and entities involved in fundraising.
Beneficiaries of fundraising appeals must declare their received funds in their income tax returns. This rule applies to those managing funds on behalf of beneficiaries, especially minors.
Contributors must also specify the source of their donations to prevent money laundering and ensure the legitimacy of all contributions.
Oversight of Fundraising Activities
Oversight of fundraising will be managed by the Cabinet Secretary for Social Development and County Executive Committee Members.
Their responsibilities include issuing permits, auditing activities, investigating complaints, and maintaining a national register of licensed fundraising entities. They will also work on promoting public awareness about proper fundraising practices.
What’s Next?
After its initial reading in the Senate on August 1, 2024, the bill will enter a public participation phase led by the Senate’s Standing Committee on Labour and Social Welfare.
The public will have the opportunity to submit feedback and recommendations before the committee reports to the Senate by September 1, 2024.
The outcome will shape the future of fundraising regulation in Kenya and may set a benchmark for other public solicitation methods.
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Exemptions
The Public Fundraising Appeals Bill, 2024, specifies certain exemptions where its requirements do not apply:
Private Fundraising Appeals: The bill does not cover private fundraising among a beneficiary’s immediate family or relatives, as these are considered private and not public matters.
Religious Collections: Collections made by or under the authority of a recognized religious association, including tithes and offerings or funds for development projects, are exempt.
Lotteries and Raffles: The bill does not apply to activities authorized under the Betting, Lotteries, and Gaming Act, such as raffles and lotteries.
Membership Fees: Soliciting membership or joining fees for an organization is not subject to the bill’s requirements.
Fines and Penalties
The Public Fundraising Appeals Bill, 2024, specifies fines for various offences to enforce compliance:
– State or public officers who participate in or conduct public fundraising appeals during their term face fines up to Sh5 million.
– Individuals seeking public office who participate in public fundraising appeals within three years of a general election may face fines up to Sh5 million and be considered to have committed an election offense.
– For other offenses under the bill, where no specific penalty is stated, fines up to Sh2 million or imprisonment for up to three years, or both, may be imposed.
Public Fundraising Appeals Bill, 2024: Key Changes and What to Expect
