UK Community Interest Companies in Crisis
The Community Interest Company is a legal form created for social enterprise. Touted as a symbol of success for a while within the social enterprise bubble, the CIC is not living up to its hype. SSE raises a few of the points made by CIC critics; since they're similar to points I make when telling folks why I don't think the form is a success I'll second 'em here:
Interesting to note that Jonathan Bland has come out to say that there hasn't been enough marketing of the Community Interest Company model. Interesting, also, because of what he said was "absolutely shameful" . . .
But isn't the 'shameful' aspect, if any, that "all that work" and "all that money" went on a legal structure that doesn't appear to be producing any lasting changes to the sector. And that this is the case is as much a structural issue (i.e. how it was set up: the details of the structure) and a choice issue (i.e. there were lots of options anyway) as it is a marketing one. And that all that work and money could have gone into something that might have had a game-changing effect on the movement.
What has become evident is that there are critics of the structure for different reasons: on the one hand, those that feel the regulation around the structure is not sufficiently strong, nor the community interest test sufficiently rigorous, to ensure democratic accountabillity in the governance of the CIC. On the other, there are those who feel that the dividend cap prevents a decent level of equity investment. Finally, there are none of the benefits that a charity might receive (rate relief, tax relief, gift aid etc).
And this is why so many have been writing about this story, and about the CIC structure: at a start-up level, CICs have difficulty (or simply can't) in accessing start-up grants, and don't have any of the benefits associated with a charitable structure. If they are trying to achieve inward investment once established, that is also proving very difficult. In a sense, as someone jokingly said to me, it's "classic third way"....

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