Serving Community Enterprise

has the CIC model failed?

rather startling story in the media recently concerning one of the originators of the CIC model who suggesting that another new social enterprise legal form is required that allows a company to generate profits, offer a return to investors but have a social aim as its principle purpose... (hang on, that sounds familar)

http://www.civilsociety.co.uk/finance/news/content/8624/stephen_llo...

its worth reading the article for what's not said, but perhaps implied...

would be interested to know what others' responses and views to this are?

▶ Reply to This

Replies to This Discussion

Permalink Reply by John Mulkerrin on March 23, 2011 at 1:24

NO, is the simple answer, perhaps the opposite is more the case, which might be why so many fail to recognise it......I think this article is an unfortunate meshing of separate issues,but it does point the way to one of the actual issues. Separate the CIC element and I can see the logic for arguing about a Social Enterprise LLP, as it allows corporations to partner in a different way.

However! placing CIC in the story as a context to support any argument about investors being deterred is a little unfortunate- eg ' Lloyd is proposing that if there are better-than-expected financial returns these should go to the charity' - There is no dividend cap in paying returns to Charities.

Can anyone name a single social enterprise of any structure that pays a 20% dividend? Liquidity of shares and a number of other issues are more relevant when discussing what may be deterring investors regarding CICs, more accurate to say investors dont even know what we are or how to channel money in.

An article on this in Third Sector earlier in the week said 'it would encourage the development of innovative financial models similar to those used in the private sector' - I think we should look at trying to develop these for CICs before we do anything else, the money is out there and growing numbers of investors are willing to take blended returns.

I'll extrapolate more thought on that shortly Adrian, but in the widest theory and notwithstanding the odd lazy article I dont necessarily oppose the idea of SE LLPs, in fact im quite keen to see what develops.

As for CICs, we have a part to play, and we will :-))

I