Fundraising Agreement (Kenya)

A Fundraising Agreement in Kenya records the obligations the parties accept and the terms governing their arrangement.

Public fundraising in Kenya — that is, soliciting money or property from members of the public — is regulated by the Public Collections Act Cap. 106, administered by the relevant County Government licensing authority and, at national level, by the Cabinet Secretary responsible for Social Services. Section 3 of the Public Collections Act Cap. 106 prohibits any person from making a public collection of money or property without a valid Public Collections Licence (PCL) issued by the relevant authority. A public collection is broadly defined and includes house-to-house collections, street collections, workplace giving campaigns, and online crowdfunding appeals directed at the Kenyan public.

Non-Governmental Organisations conducting fundraising activities in Kenya must be registered under the Non-Governmental Organisations Co-ordination Act Cap. 134 and regulated by the NGO Co-ordination Board, now operating under the Public Benefit Organisations Act No. 18 of 2013 — though the PBO Act's full implementation has been phased. Registered NGOs must comply with the NGO Regulations 1992, which require annual financial returns disclosing sources of funding, including amounts raised through fundraising campaigns.

The Capital Markets Authority (CMA) of Kenya regulates fundraising by companies through the issuance of securities — shares and bonds — to the public under the Capital Markets Act Cap. 485A. Where a Fundraising Agreement involves the offer of securities to investors, the CMA licensing and prospectus requirements apply. Private fundraising between sophisticated investors (qualified investors) under the CMA regulations may be exempt from full prospectus requirements.

The Kenya Revenue Authority (KRA) administers the Income Tax Act Cap. 470, which provides that donations received by registered charitable organisations — those holding a valid tax exemption certificate from the KRA under Section 13 of the Income Tax Act — are not subject to income tax. Fundraising agreements for charitable organisations should reference the organisation's tax-exempt status and the implications for donors claiming gift aid or tax deductions.

The Data Protection Act No. 24 of 2019, administered by the Office of the Data Protection Commissioner (ODPC), applies to the collection and processing of donor personal data during fundraising campaigns. A Fundraising Agreement should address the data processing obligations of the fundraiser as a data processor acting on behalf of the organisation as data controller under Section 35 of the Data Protection Act.

The Communications Authority of Kenya (CA), established under the Kenya Information and Communications Act Cap. 411A, regulates digital fundraising and electronic solicitation. SMS-based and online donation platforms must comply with the CA's guidelines on electronic communications and the Consumer Protection Act No. 46 of 2012 requirements for transparent pricing and consent.

A Fundraising Agreement in Kenya is required whenever an organisation engages a third-party fundraiser or fundraising firm to solicit donations or contributions on its behalf, or whenever an organisation establishes clear internal governance terms for a fundraising campaign.

A Fundraising Agreement is needed when a Kenyan NGO registered under the NGO Co-ordination Act Cap. 134 contracts a professional fundraising firm to conduct a donor acquisition campaign targeting corporations and high-net-worth individuals for annual giving or endowment contributions.

A Fundraising Agreement is required when a charitable trust registered under the Trustee Act Cap. 167 and holding a KRA tax exemption certificate contracts a fundraiser to solicit donations for a specific project — school construction, medical equipment, bursary fund — and needs to document the fundraiser's mandate, fee structure, and accountability obligations.

A Fundraising Agreement is needed when a religious organisation — a church, mosque, or temple — contracts a professional fundraiser to conduct a capital campaign for the construction or renovation of a place of worship, defining the split between fundraiser commission and funds remitted to the organisation.

A Fundraising Agreement is required when a Kenyan university or research institution contracts a development officer or external fundraising firm to solicit alumni donations and corporate grants, with provisions for naming rights, endowed chairs, and gift acceptance policies.

A Fundraising Agreement is needed when a social enterprise or company limited by guarantee registered with the BRS contracts a crowdfunding platform — such as M-Changa, the Kenyan mobile giving platform — to host an online fundraising campaign, defining the platform's fee, the duration of the campaign, and the disbursement of funds raised.

A Fundraising Agreement is required when a political party registered under the Political Parties Act No. 11 of 2011 and regulated by the Registrar of Political Parties engages a fundraising consultant for a political fundraising dinner or membership drive, documenting the consultant's mandate and the campaign finance reporting obligations.

Parties in Kenya should prepare a Fundraising Agreement (Kenya) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A Kenya Fundraising Agreement under the Law of Contract Act Cap. 23 and the Public Collections Act Cap. 106 must contain the following essential elements to be enforceable and compliant with Kenyan fundraising regulation.

Parties and Registration Details: The full legal name and address of the organisation (the principal) and the professional fundraiser or fundraising firm (the agent), together with the organisation's NGO Co-ordination Board registration number or BRS company registration number, its KRA PIN, and — where applicable — its tax exemption certificate reference number under Section 13 of the Income Tax Act Cap. 470. The fundraiser's business registration details and any relevant professional accreditation should be stated.

Public Collections Licence: Where the Fundraising Agreement covers a public collection as defined in the Public Collections Act Cap. 106, the agreement must confirm which party — the organisation or the fundraiser — is responsible for obtaining the Public Collections Licence from the County Government or the Cabinet Secretary. The PCL number and validity period should be stated in the agreement or attached as a schedule.

Fundraising Mandate and Target: A clear description of the fundraising campaign — the purpose for which donations are being solicited, the minimum and target fundraising amounts in Kenya Shillings (KES), the geographic scope of the campaign (national, specific counties, online), and the duration of the campaign with start and end dates.

Fundraiser's Remuneration: The basis on which the fundraiser will be paid — a fixed fee, a percentage commission on amounts raised, a retainer plus success fee, or a cost-plus model. Kenyan law does not prohibit percentage-based fundraiser remuneration, but the organisation's donors and the NGO Board may expect the remuneration to be disclosed. The agreement should specify whether the fundraiser's fee is deducted from funds raised before remittance to the organisation, or invoiced separately.

Donor Funds Handling and Segregation: How donated funds will be collected — bank account details, M-Pesa paybill number, cheques — and the timeline and method for remittance of collected funds to the organisation. The fundraiser must not commingle donated funds with its own operational funds. A dedicated trust or escrow account for campaign proceeds is best practice and may be required by the NGO Board or a donor grant agreement.

Reporting and Accountability: The frequency and content of financial reports — weekly or monthly — that the fundraiser will provide to the organisation, including number of donors solicited, amounts pledged, amounts received, amounts remitted, and amounts retained as fees. The NGO Co-ordination Board regulations and the Public Collections Act Cap. 106 require accurate financial records of all public collections.

Data Protection Compliance: The fundraiser's obligations as a data processor under the Data Protection Act No. 24 of 2019 — maintaining donor personal data securely, processing donor data only for the purposes of the campaign, not using donor data for the fundraiser's own purposes, and deleting or returning donor data upon termination of the agreement. The fundraiser must comply with the Office of the Data Protection Commissioner (ODPC) registration requirements.

Termination and Return of Materials: The grounds for early termination by either party — material breach, insolvency, failure to achieve agreed milestones — and the obligations upon termination: return of donor lists, campaign materials, and unremitted funds; final accounting; and transition of donor relationships to the organisation.

Governing Law: The agreement is governed by the laws of Kenya. Disputes are resolved by negotiation and, failing that, by arbitration before the Nairobi Centre for International Arbitration (NCIA) under the Arbitration Act No. 4 of 1995 or by litigation in the appropriate Kenyan court. The forms-legal.com Kenya Fundraising Agreement template covers all key provisions required under the Law of Contract Act Cap. 23, the Public Collections Act Cap. 106, and the Data Protection Act No. 24 of 2019.