Are you facing some uncertainty whether to set up a charity or a Community Interest Company (CIC)?
COMMUNITY INTEREST COMPANY OR CHARITY – Both entities have legal regulations. The thinking process is to really consider the following –
What is your WHY?
What are you keen to achieve both long term and short term?
It is important that you really consider these questions, then you will be able to decide which is more suitable based on your objectives and what you are keen to achieve.
As a very brief summary –
About Community Interest Company
- The charitable model is suitable for organisations that will primarily be asking for money, in the form of donations, grants, bequests
- The CIC is intended for organisations that will have primarily community led purposes but may also earn a significant proportion of their income from trading. CICs can also be financed through grants.
- “Charity” is an extremely well-recognised brand for the general public, whereas “CIC” is hardly known outside the social enterprise sector.
- CICs are liable for taxes and business rates which charities don’t have to pay.
- CICs are able to reward their own directors financially and generally have more freedom to be entrepreneurial. Charities can only pay (subject to stringent conditions) a minority of directors/trustees
Are you facing some uncertainty whether to set up a charity or a Community Interest Company (CIC)?
Community Interest Companies have become a lot more popular since the Covid 19 pandemic. CIC regulations are not as stringent as those that pertain to a charity. CIC’s have that flexibility that allows adaptable project delivery that is able to meet the community needs as required especially during a crisis.
Community Interest Companies have become increasingly popular since the pandemic as they served to address an immense number of issues during those difficult times, the true value of a CIC is the ability to deliver projects, never delivered before to address a local issue and make connections in the local community so local community members have a voice. CIC’s are also very diverse addressing non conventional issues using non conventional methods of delivery and reaching out to the local community as seen in this CASE STUDY.
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