CIC Association

Serving Community Enterprise

I'm currently working with someone who is in the process of registering a CIC who wants to set up a charitable subsidiary to the CIC.  I am aware that is quite common and normal the other way round ie a charity with a CIC subsidiary. However I haven't been able to get any guidance on whether a CIC can have a charitable subsidary from the CIC regulator website or elsewhere Can anyone help answer my query ?

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Hi, I agree with Geof.

You would need to be very careful, or you could get into trouble which could affect your cic and all of the hard work you have already put into to it.

Reading your question again, especially your comments "As a CIC we will be gifting surplus to the charitable organisation, but we also want to use to to access grant funding for projects that the CIC can perhaps not access". and "contracting the CIC to deliver a paid piece of work for them",

Both make it sound that your intentions are not quite ethical or charitable.

I am sure that is not your intention, but this could be viewed as a rather immoral.

Personally I would concentrate on you CIC. You can do a lot of good with it.

If you need extra members for funding applications, check out this new group.

Group link

 

Oops - well obviously wasn't trying to make it sound unethical or immoral at all - perhaps I didn't explain myself clearly. I thought it was quite common practice for companies, whether social enterprises or not, to have charitable arms that they gifted monies to, so that money could be further used for charitable purposes. I have sought advice from business link previously and talked through our situation at great length, the last thing we'd ever want to do is something that wasn't quite right - hence going to such pains to try and find out the right way to go about it. We don't need extra board members/ directors to be eligible for grants - our thinking was that there were some areas of grant funding that we weren't currently able to access due to being a CIC and not a charity, and perhaps if we had a charitable arm, that would be one way around that, as well as being able to gift it monies from the CIC as well. our understanding was though that the charitable arm could potentially 'contract' the CIC where appropriate to deliver on some work that came from grant funding - However, if it leads us into hot water than it is certainly not something we'd want to progress. Back to the drawing board! Really sorry -just like to emphasise obviously we're a registered CIC so asset-locked etcetera, just trying to be sensible with what we have and maximise the most we can do with it, not line our pockets or do anything underhand!

Thanks for all your advice, will continue to try and look into it.

Sorry, I did not mean to cast aspersions or make you uncomfortable.

I was just relaying what I thought someone else, certainly not me, may think about the way that you described what you were trying to achieve and how you were trying to achieve it.

Just disregard my comments on that matter.

However, I can say that in general it would appear that many grant applications require at least 2 and some times 3 or 4, unrelated directors and trustees or members.

I have been unable to find many grant funding options which do not have such requirements.

But, it may be different in your field and you may already have a good team.

No worries, we have 3 unrelated directors on the board of our CIC, so that is not a problem. The problem is that we only have two paid staff (of the CIC) who could be trustees of the potential new charitable arm, and one of those is a paid director and one is me, and I am company secretary - as per Geof's original reply, it doesn't look like that is OK if there is ever to be any financial transactions between the charity and CIC. I will continue to look into it!
Thanks for all your help and advice.

If needing trustees for your charity is a stumbling block to help your excellent work, I can offer myself up for that, if you feel that it would help in the short term.

Other than that, it would appear that Geof or another CIC Director, who is probably more versed in these matters than me, may be able to throw in some options that may help.

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