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As part of our Lottery Project, we have been advising a local organisation facing a common dilemma- whether to register as a CIC (community interest company) or a CIO (charitable incorporated organisation). In other words, are they a charity or a social enterprise?
A CIC is a special type of limited company which exists to benefit the community rather than private shareholders and is a great option for an organisation that falls somewhere between the charity and business worlds. In the case of the organisation we were advising, whose members had more of a commercial background, the option of becoming a CIC looked more attractive. However, the members also understood the value of local community support and felt it important that any profits made were used to improve their organisation’s facilities.
Once a decision has been made to register as a CIC, you then have to decide on the type. There are three types of CIC:
Less than 10% of CICs are registered as CIC schedule 3 and some charitable trusts, that are happy to fund CICs generally, will not fund schedule 3 CICs that pay dividends to shareholders – the Postcode Lottery Trust is an example of this.
Setting up a CIC is inexpensive (currently £27) and a fairly straightforward process. However, to ensure that the right decision was being made for the organisation we were advising, we carried out some research into the funding available for CICs, to ensure they are not excluded.
When fundraising for a CIC, you must read the guidance to make sure that the funder is happy to fund CICs. Our research showed that becoming a CIC does reduce the amount of grant funding that you can receive from charitable trusts, many only fund CIOs/ registered charities. Having said that, there are still some excellent funding opportunities, particularly for large capital projects, for CICs.
Here are some of the options we found:
Your Fund Surrey
Capital funding is available to community organisations in Surrey for projects that deliver positive benefits and improve quality of life for local people, particularly as communities recover from the impact of COVID-19. Your Fund Surrey has a total budget of £100 million. The minimum bid for each project is £10,000. There is no upper limit.
Your Fund Surrey for community projects – Surrey County Council (surreycc.gov.uk)
Community Ownership Fund (Levelling Up)
The Community Ownership Fund is a £150 million fund over 4 years to support community groups across England, Wales, Scotland, and Northern Ireland to take ownership of assets which are at risk of being lost to the community. Up to £1million but usually around £250,000 (plus match funding).
https://www.find-government-grants.service.gov.uk/grants/the-community-ownership-fund-1#summary
National Lottery Funding
Too many funds to mention here but they do support CICs.
https://www.tnlcommunityfund.org.uk/funding
Thrive Together Fund (loan/ grant combination)
Unrestricted funding package (75% loan and 25% grant) are available for small and medium sized charities and social enterprise based in England that are working to improve people’s lives or the environment in which they live and who are looking to grow or diversify their business models. £25k – £150k (25% grant)
Thrive Together Fund | Funding | Social Investment Business (sibgroup.org.uk)
Bentley Advancing Life Chances Small Grants Programme
Grants are available to support charitable organisations working with vulnerable, disadvantaged or under-represented communities in 19 locations across the UK. Up to £500.
Community Foundation for Surrey
Community Foundation is listed on funding websites as funding CICs, although you may be more likely to secure funding through them as a CIO.
https://www.cfsurrey.org.uk/makeanapplication/
Equity & Inclusion Fund- grants are available to local not-for-profit groups for projects which address disadvantage, barriers to participation and promote social cohesion in Surrey. Wellbeing Fund- grants are available to local not-for-profit groups for projects which address any and all aspects of wellbeing, including mental health, addiction, domestic abuse and healthy living, in Surrey. From £1k up to £50k, depending on the project.
Youth Fund – Grants are available to local not-for-profit groups for projects which make genuine improvements in the lives of young people in Surrey.
Community Foundation is listed on funding websites as funding CICs (may be less likely to secure funds if limited by shareholders than limited by guarantee)
The Pargiter Fund
Grants are available for charitable and voluntary organisations to provide activities in Kent, Surrey, Berkshire, Wiltshire and Guernsey which support disadvantaged older people who are over 65 years of age so they are independent, healthy and socially included.
This fund is also managed by the Community Foundation for Surrey (CFS) so if you receive money from CFS check which fund it came from to avoid duplication).
CLA Trust
Organisations in England and Wales to provide facilities for the disabled to take part in country sports and recreation, and training in agriculture and horticulture and to promote education in the countryside for disadvantaged children and young people. Funds CICs. Up to £5,500 available.
McCarthy Stone
Grants, volunteers, and project support to charities and organisations who support the health and wellbeing of older people, or further children’s education and regenerate communities, particularly where this supports older people. Up to £5000. Core funding only to registered charities. Will fund CICs.
McCarthy Stone Charity Support (mccarthystonefoundation.org)
Suez
Smaller Projects Fund (England) – not-for-profit organisations in qualifying areas of England for physical improvement to community facilities, such as village halls, public parks, sports facilities, historic buildings and structures. CICs are eligible. Must be in same area as a SUEZ recycling centre (enter postcode on website to see if you qualify)
Apply for funding – SUEZ Communities Trust
The Clothworkers’ Foundation
We award grants to UK registered charities, CICs, and other registered UK not-for-profit organisations (including special schools).
Grants are awarded towards capital projects which we define Buildings, Fittings, Fixtures, and Equipment or equipment/furniture, sports/gym equipment, digital/audio or vehicles.
Apply for a Grant | The Clothworkers’ Foundation (clothworkersfoundation.org.uk)
If you are thinking of setting up a CIO or CIC in North Surrey and need advice, we can help! Please get in touch if you want to discuss your options. You’ll also find some useful information in the links below.
Guidance on setting up a CIC on the gov.uk website:
https://www.gov.uk/set-up-a-social-enterprise
https://www.gov.uk/government/publications/community-interest-companies-how-to-form-a-cic
Social Enterprise UK – membership organisation for CICs/ social enterprises
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