CIC - Any one know much about them?

Moncs_2

Hi all,

I currently run a very successful charity event and I am looking to take this nationwide to involve other major towns and cities.

The idea is that the event raised around £10,000/£15,000 each year for a local charity and can easily be implemented in other cities.

If I did press ahead and do this it would become a full time job and I am currently looking for a company to sponsor the event in order for me to do this.

However my question is, since I will be raising money FOR charities I then don't need to register as a charity myself, so rather than going down a Ltd company route it was suggested that I set myself up as a CIC (Community Interest Company)

Just wondered if anyone has had any experience of CIC's and what there thoughts were?

Thanks

fengirl_2

A CIC can never be a charity and generally speaking they trade for the benefit of the community. They have a board of directors and the money taken out is limited. I am not sure that what you want to do fits with a CIC.
What you seem to be describing is becoming a professional fundraiser where you will draw a salary from the money raised. You can do this as a sole trader or a limited company as it will only be you involved.

Moncs_2

fengirl wrote: »

A CIC can never be a charity and generally speaking they trade for the benefit of the community. They have a board of directors and the money taken out is limited. I am not sure that what you want to do fits with a CIC.
What you seem to be describing is becoming a professional fundraiser where you will draw a salary from the money raised. You can do this as a sole trader or a limited company as it will only be you involved.

Thanks, yes I suppose your right 'a professional fundraiser' fits the bill where I would choose a charity in each area to benefit from the event, and I would ideally like a large company to sponsor every event by providing me with a salary.

I hope that makes sence

fengirl_2

Yes, that makes sense. You would be a self employed fundraiser.

rickgott

Before discounting the idea you should be aware that CICs you can apply for approximately 70% of grants and loans available within charitable plus a CIC is seen (from an outward facing perspective) as being more charitable/community focused as apposed to a Ltd company.

I think you should definately have a look at:

http://www.cicregulator.gov.uk/

Also it is probably worth adding that if you set yourself up as a Ltd company you can change into a CIC for £25.

Rich.

fengirl_2

But the fact remains that a CIC can never be a charity and so the large proportion of grant makers won't consider you. Moncs is a fundraiser - s/he does not need a vehicle to do this.

rickgott

That is correct. A CIC is not a charity.

Business Link London (sponsored by the London Development Agency) advised me the other day that CICs could be considered for approximately 70% of charitable grants/loans that are available. Perhaps this is not the case? It would be good to hear how you know that the majority of grant makers will not give to CICs, as the info/advice from BLL appears to contradict this... Perhaps you are 'in the know'?

I run a reputable product/service supplier website for charitable organisations (http://www.memberwise.org.uk) and BLL recommended that I consider changing from a ltd company to a CIC. Perhaps my situation is slightly different to the fundraiser. It would be interesting to get your take on this.

Rich.

fengirl_2

I spend my days giving funding advice. One of the main issues which organisations face is that if they are not registererd charities, many grantmakers cannot fund them. BLF and A4A are exceptions, but BLF money is hard to get nowadays due to the Olympics and LA's being able to bid. It is true that CIC's could access loans, provided they can repay them! Maybe BL was talking about grants for businesses, not for the Third Sector.

Whether or not you are charitable depends on your legal status and the objects with which you were set up. If you are a company limited by guarantee (ie you cannot distribute your profits) and your objects are charitable in law, you need to register as a charity. If your objects are not charitable, then you cannot register.

Many people think that you need to register as a charity in order to fundraise - this is not the case and there are hundredds of individuals who are professional fundraisers, either in their own names or through companies like yours. They are trading - they take a wage and pass sums raised to charity - but they have to have an agreement with the charity as to exactly how much they will take for themselves. Its a big area of the law.

Moncs_2

We are currently in the process of building a website and getting the foundations ready to roll it out nationwide.

When we are ready we plan to approach corporate companies and ivestors basically to fund our wages to save taking a percentage from each event we hold. In return they would become the main sponsors and get nationwode exporsure.

In that case do you think a CIC is the way to go or just a LTD company?

fengirl_2

A limited company. A CIC will not enable you to take assets out of the company and restricts your earnings. A CIC is designed to trade and put profits back into the community. As far as I can see, you have a fundraising idea which you are selling to as many charities who will take it, provided you can get sponsorship.

Moncs_2

fengirl wrote: »

A limited company. A CIC will not enable you to take assets out of the company and restricts your earnings. A CIC is designed to trade and put profits back into the community. As far as I can see, you have a fundraising idea which you are selling to as many charities who will take it, provided you can get sponsorship.

Yes that’s the idea. We have a proven past record of a very successful event in one major city and we plan to roll this event out annually to other cities and towns around the UK and the money raised in each individual event will stay locally to a nominated charity.

However it will be a lot of work and would probably become a full time job, so rather than taking a percentage from each event we would be looking to a company or individual to sponsor the events to fund salaries/expenses etc.

So based on that you would say a Ltd company is the best way to proceed??