Why CICs are the Future of Social Enterprise

As the business world continues to evolve, social enterprises are becoming increasingly vital in addressing societal challenges while promoting sustainable growth. At the forefront of this movement are Community Interest Companies (CICs), a relatively new type of company introduced in the UK in 2005, designed specifically for social enterprises that want to use their profits and assets for the public good. Here's why CICs are poised to lead the future of social enterprise.

What Makes CICs Unique?

Purpose-Driven Model: CICs are inherently designed to benefit communities. Their primary objective is to serve a social purpose rather than simply maximising shareholder profits. This distinct model attracts socially-conscious investors and consumers who prioritise community welfare.

Asset Lock: One of the most significant features of CICs is the asset lock, which ensures that the company's assets and profits are used for the community's benefit. This mechanism provides long-term protection of the social mission, preventing asset stripping and ensuring sustainability.

Regulatory Oversight: CICs are regulated by the Office of the Regulator of Community Interest Companies, which ensures they adhere to their social objectives and maintain transparency. This oversight builds trust among stakeholders and enhances the credibility of the organisation.

The Benefits of CICs

Access to Funding: CICs should trade but, they can attract a diverse range of funding sources, including grants, loans, and investments from socially responsible investors. This diversified funding base can provide more stability compared to traditional for-profit businesses.

Enhanced Public Trust: Given their commitment to social goals and regulatory scrutiny, CICs often enjoy higher levels of public trust and support. This can lead to stronger community engagement.

Flexibility: The limited company structure which forms the basis of a community interest company can provide flexibility to meet the individual needs of different organisations. A CIC can be set up as a private company limited by shares, private company limited by guarantee or a public limited company.

Success Stories of CICs

Get Cycling CIC: Established in York in 2008 by a family with a passion for cycling and social inclusion. Get Cycling uses cycling to tackle social and environmental challenges. They are passionate about sharing all the benefits of cycling: independence, physical exercise, mental wellbeing, liberation, happiness, eco-friendliness, sustainable transport, and the fun and practicality which cycling can offer to everyone and anyone. They are trailblazers for finding and creating unique cycle adaptions for disabled people who want to cycle.

Side by Side Arts CIC: This north east based CIC provides performing arts opportunities to people who would not normally have the chance to take part. Every music lesson booked directly supports their Gateshead based community project work and scholarship program.

Assistiv CIC: Using innovative technology and training to remove barriers to employment. The technology allows adults with learning difficulties to fulfil tasks independently and to a high standard thereby reducing barriers to work and enabling happy and productive staff.

Contribution to the Community

CICs play a crucial role in addressing social inequalities and fostering community development. They often operate in underserved areas, providing essential services and creating jobs where they are needed most. By prioritising community needs, CICs can drive social innovation and inspire other businesses to adopt more responsible practices.

Moreover, the social impact generated by CICs extends beyond their immediate activities. By reinvesting profits back into the community, they create a multiplier effect that can enhance local economies, improve public health, and promote environmental sustainability.

Conclusion

Community Interest Companies represent the future of social enterprise by combining business acumen with a commitment to social good. Their unique structure, regulatory framework, and proven ability to generate positive community outcomes make them an ideal vehicle for addressing some of society's most pressing challenges. As more businesses and investors recognize the value of this model, CICs will undoubtedly play a pivotal role in shaping a more equitable and sustainable future.

By supporting and promoting CICs, we can contribute to a world where businesses thrive not just for profit, but for the benefit of all.