CIC Association

Serving Community Enterprise

CIC Vs Charity Vs Other for Local Choir

Hi,

I'm currently setting up a local choir for asylum seekers. The choir will work alongside an existing charity that provides asylum seekers with other services.

We will be looking to apply for grants to fund the choir. Our main cost will be to pay for the choir leader: we expect both our income and costs to be small.

We are currently researching what the best structure for an organisation of this type is: CIC Vs Charity Vs Other.

Our considerations at the moment are cost (insurances, accountancy fees, banking fees), whether the org type will restrict our ability to get grants (is this an issue with a CIC?), and the reporting / governance requirements.

Does anyone have any experience that they can share? Any help would be greatly appreciated.

Many thanks,

Jonny

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Comment by John Mulkerrin on January 3, 2017 at 16:22

Hi Jonny

Fees are generally the same for Accountancy/Book-keeping fees and it is generally decided on the amount of transactions, complexity of your accounts.

Im pretty sure from our experience on here that there will be quite a few members who could help you for a lot less than that, whether a Charity or a CIC as your accounts sound simple. You could rope in a volunteer to do them or ask a local accountant to do them pro-bono.

Best of luck

John

Comment by Jonny Crabb on January 2, 2017 at 18:04

Thanks for the help so far on this topic- very useful. I'm researching this through a number of sources so I'll make sure I update this post with what I learn.

Regarding costs, one of the savings that I thought we might be able to make through a charity as opposed to a CIC / Company is accountancy fees. I understand these are around £80 per month which would be a lot for us. I've been advised separately that to be a limited company it's advisable to have an accountant. Is this true for a charity too, or might I be able to do this myself?

Many thanks,

Jonny

Comment by John Mulkerrin on December 30, 2016 at 17:07

ooh, another quick thought Jonny.

Doesnt sound relevant to you at this stage but might be and certainly will be for many future readers.

CIC and Charity can both qualify for social enterprise tax relief (SITR) whereas CIOs currently cannot.

If the activity itself is qualifying, CICs can alongside Charity and CIO qualify for gift aid, by using portals such as Localgiving.com which many CICs have used to great success.

There is flexibility in any event, you can (if limited by guarantee which it sounds might suit you) quite easily convert a CIC to a Charity and  (although converting a Charity to a CIC takes a little longer) vice versa.

Comment by John Mulkerrin on December 29, 2016 at 15:33

Hi Jonny

As Edward mentions a CIO structure is definitely worth looking at, but Im not so sure that there is any difference between a CIC and a CIO in terms of securing grants.

Edward, do you have any examples of CICs not being able to access grants now? It was definitely an issue in the very early days but I dont find many examples now as funders have mostly updated their eligibility criteria.

We're always looking for examples so any you can give would be great.

Back to the CIC v Charity v other..........agree with Edward that most costs are similar.

The main difference (for me) that is worth considering is who is in charge and who does the day to day activity. In a CIC this can be the same people, whereas the governance and executive functions in a Charity are generally separate.

Either way, sounds like a great project, best of luck

John

Comment by Edward Pickering on December 27, 2016 at 16:34

Hi Jonny - it will be trickier (but not impossible) to get tranditional grants as a CIC - a charitable incorporated organisation (CIO) would be better (and is similar in paperwork/insurance/fees etc.)

Happy to have a chat with you about this if that would help?

Edward

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