Charity or CIC or both?!

emmonk

Hi,

I have been asked by a friend to help with the admin in setting up a project and the first thing we need to do is decide what format it should take!

The structure is as follows:

• He is a director of a company, which is basically an event management company which runs projects including:
  • An Oral History project (partly funded by the art's council)
  • A literary festival (maybe more than one)
  • A reading campaign for
• All the events are education and literature based with the aim of helping his local community. The company does not do anything outside of this area

The plan is that the company will be paid by the literary festivals to organise them. As yet the festival hasn't made enough money to pay the company!

Any thoughts on the best way to set all this up would be much appreciated.

Should the company be a CIC or a charity. He is not intending to make a profit in this, and any money that is made will be put back into benefitting the community, but needs it to support him and a partner as their full time jobs so plans to draw a salary once it starts making money.

Other literary festivals I have come across seem to be registered charities so would there be any benefit in setting up the festival as a charity that is run by the CIC?

Finally, they have not made any money in the last few festivals but are building up to it. Will they be able to pay themselves retrospectively once it does start making some money?

Thanks so much for any advice you can pass on!

Emma

Savvy_Sue

I think they (and you) need better advice than we can give on an internet forum, especially as CICs are a bit of an unknown quantity as yet. I'd get in touch with your local volunteer organisation (google volunteer plus your city / town / county) and see if they can give any advice or point you in the right direction.

Also take a look at the Independent Examiners and get in touch with them.

Also, by the sounds of it, there's a ltd company which hasn't yet turned a profit: that's not a sustainable situation, what does their accountant have to say about it? I don't think a CIC is going to be a magic bullet for that: at the end of the day, every charity / not for profit / company HAS to break even, or it goes down the pan.