News

Association planned for CICs

Finance | Gareth Jones | 3 Sep 2008

Plans are afoot for an association dedicated to Community Interest Companies (CICs), in order to increase awareness of the brand and lobby on issues such as tax.

It will offer resources for CICs as well as an online trading platform for them to get in touch with each other.

A timeline and set of objectives is currently being drawn up and is expected to be released within the next couple of weeks, with the association intended to be fully up and running by October.

Running costs will be covered by grants and sponsorship, ensuring that membership will be free to CICs, and a questionnaire will be sent out shortly to canvass the views of CIC organisations.

The men behind the project are John Mulkerrin (pictured) of financial services provider Quotes 4 Charity, and Tom Barnett of online business directory Ethical Junction, both CICs themselves.

The pair are currently in discussion with the Social Enterprise Coalition as well as the CIC regulator, and say they have 40 organisations that are willing to help develop the association.

CIC form ‘creates problems’

Speaking to Charity News Alert, Mulkerrin said he was inspired to co-found the association as a result of his experiences running a CIC.

“I thought the CIC form was the best thing since sliced bread but it actually created problems. I encounter people who are unaware of what a CIC is, some business partners didn’t have confidence in it, and generally we don’t feel it is growing at a fast enough pace.”

Nobody taking ownership

Mulkerrin intimated that one of the problems was that the Social Enterprise Coalition had too much else on its plate to really give CICs the time and effort they need, though he stressed that he didn’t mean that as a criticism.

“What seems to be happening is that no one is taking ownership and none of these issues are being moved into action because there is no indicator of what the owner-operator requirements are.

“The Social Enterprise Coalition is obviously dealing at a higher level, whereas we intend to work on a more macro level with the more practical issues.”

One contentious issue that will be on the agenda is the dividend lock, which Mulkerrin acknowledges can discourage investment in CICs, but he said his personal view was that it should remain as it is “one of the strongest indications of the brand”.

“The dividend lock is a very interesting element. My opinion is that raising it is dangerous as at the moment it does define what a CIC is.

“Whilst it is generally being criticised we feel there is potential for improving the situation as it is, and if we can’t find a solution perhaps then let’s have a look at relaxing it.”

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