CIC Association

Serving Community Enterprise

Social Enterprise Mark - A double audit fee for CICs?

Update Feb 10 2011- With the recent increase in the Social Enterprise Mark fee to £350 a year from £99, a number of members have moaned to me that we still havent made any progress on the points made in this original post.

 

1. What shall we do, if anything?  They dont want to address our concerns and the criteria still split CICs, Co-ops and Charities..some can, some cant. 

 

2. Is 372 members a good return for £1million of taxpayers money? Thats over £2500 per member, why have they increased the fee's by so much?

 

3. The Association received a phone call from BMG, who are conducting the State of social enterprise survey for the SEC, who back the Mark and are part owners, apparently the Association ISNT a social enterprise.......what do you guys think of that?  should CICs stop trying to be part of it and position ourselves as more than social enterprise? Part of the Third Sector??

 

4. One suggestion has been to offer a social business mark to all CICs for free? opinion?

 

Im confused and a little tired with this, how can we finally get to a situation where I dont have to bother anymore?  

 

Your guidance please

 

Hi Everyone

The brand identifier has been delayed, and we want to use this time to gather more member opinion on it and feed that back into the powers that be. It seems we are all very keen to improve awareness, which is the aim of the Identifier, but it doesnt seem to be a popular product with a few serious problems.

We'd like to hear your opinion whatever it is, so far we've had a range of opinions in from members but a couple of clear themes are emerging. I hope to stimulate the debate by making a couple of statements as a default position, and will adapt them subject to your feedback. It would be great if you could post your replies onto this blog, but im aware some of you would prefer to email me direct at john@cicassociation.org.uk

We hope to get a chance to put your views before any decisions are made.

1. CIC Association CIC members feel it would be unfair on CICs to have to pay a second audit fee for the Mark , when we pay for and prove our status as social enterprise via the Regulator. Having to pay this charge every year would be unfair to CICs , who already prove their status to the Regulator every year with our Annual Community Interest Test. We want an exemption for CICs from having to pay any second audit fee to be able to use the Social Enterprise Mark.

2. CICs would like to ensure any awareness campaigns include CICs and explanations of what CIC is what we as practitioners do. We'd like to ensure we maximise the opportunity to raise CIC awareness at the same time, as we have no awareness budget.

On a lighter note, we 've just burst through the 500 members and have some really positive announcements coming shortly, keep those suggestions and offers coming!

John

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Comment by Declan Jones on February 10, 2011 at 23:35

Hey folks - some great comments here. Bottom line for me is not just what it costs and what their postion means in terms of how they treat CICs at the moment but how they would treat CICs in the future - shabbily I imagine or as a cash cow?

One point worth noting is that the mark has been granted to local authority arms length organisations in leisure and culture e.g Edinburgh Leisure

this is a council dept which opportunistically changed its legal status to a Trust but is no more a social enterprise than my right leg  - no matter what legal niceties they have employed. In Glasgow, Culture and Sport is a TRust with CIC status for its trading subsidiaries but I don;t think local people realise what has happened nor probably care - interesting to see how they pass the community interest test.

Given the level of cuts on the horizon will the mark advocates still be around if their subsidies dry up?

Comment by Geof Cox on February 10, 2011 at 22:33
Just a footnote to Adrian's comment - I'm continually surprised by the absence from this debate of other accreditation standards - such as the social-enterprise-managed ethiscore and the international SA8000.
Comment by Adrian Ashton on February 10, 2011 at 21:59

I'm think I'm with Terri on this - if an organsiation adopts any quality standard or assurance mark, then they should be clear that doing so will give them a clear economic or operational benefit, otherwise they're simply wasting their time, money and energies by delivering someone else's agenda.

 

Some may be surpried to learn that The Social Enterprise Mark is not the only social enterprise quality mark out there (there are other older ones!), but until the general public understand and appreciate what it stands for (and its applied consistently - the SE Marks' criteria changes depending on your size), then lets focus on building brand CIC. Some individual CICs may feel there's benefit in pursuing the Mark, but that should be their choice. As the Association, perhaps the policy line should be - "its one of a number of quality marks/standards - if you think you'd benefit from it, go for it. Otherwise, don't."

 

 

if people fancy more detail about some of the references I've aluded to above, see the following links:

http://thirdsectorexpert.blogspot.com/2009/08/hypocrisy-over-social...

http://thirdsectorexpert.blogspot.com/2010/06/marked-for-success-or...
Comment by Geof Cox on February 10, 2011 at 21:53

My advice is to just forget the social enterprise mark - everyone else will have done in 5 years' time!

It's taken over £1million in subsidy to get just 300-odd mark holders - a tiny tiny percentage of social enterprise.

With the number of CICs heading towards 5,000 - and over 1,000 members in the CIC Association itself - if we did go the route of our own free mark we would much more quickly and easily establish it - and beyond the initial design on-going cost would be negligible since CICs are already accredited and monitored.

A nice 'CIC MARK' would indeed be a great addition to our identity I think.  Are there any graphic design CICs out there up for some pro bono work?

But we shouldn't be under any illusions - the numbers involved though not as small as those for the social enterprise mark would still be too small to have much of an impact, at least as far as the general public and trade customers are concerned (public sector commissioners might be a bit different - but I doubt it).

It looks to me as if there are at least a third of a million people and organisations in....  The social enterprise mark has reached maybe around one tenth of one percent of those so far - there are far more CICs than this, but they still only represent 1 or 2% of all the social enterprise out there.

Comment by Terri Hills on February 10, 2011 at 19:34

I can't see any tangible benefit from having this 'Mark' - particularly for smaller organisations which are unble to pay high fees. Even with the Mark, do the public really understand it anyway?

I hold with the poster who stated they would rather stand - or fall on their own merits...

Reputation takes a time to build-up - and these type of 'Marks' don't necessarily improve anything.

I would move towards getting direct endorsement from high-profile clients instead. For example, our organisation has recently become a regular supplier to BUPA - and if we could get formal permission to use their logo to indicate that we are a regular supplier to them, this would carry much more weight than any social enterprise mark. Social enterprises need to be businesslike, even if they serve the community....

Comment by John Mulkerrin on February 10, 2011 at 19:04

Hi Cecile

Thanks for that, do you think it was fair then that I wasnt able to bid for the last £200k tranche of funds given to the Mark? I wanted to put the case how we would use the money, but didnt even get the chance

 

Comment by Cecile Gillard on February 10, 2011 at 18:54

To be fair to the Mark scheme and the organisations that operate it, there are costs involved in operating any accreditation scheme where there is some attempt to verify that applicants meet criteria (and may also be some attempt to monitor ongoing compliance with those criteria?).

It's a very harsh financial and economic climate for all, so freebies are highly unlikely. 

Just to depress you all a bit more(!) the Charity Commission is suggesting it might seek the introduction of fees to be paid to it by charities for a range of things.  That shows how cold the climate is ....

I'd suggest pressing the CIC Regulator to keep enhancing understanding and appreciation of CICs - but there's a resource issue there too, as the CIC Regulator's office is very small, also the number of CICs, though growing, is still small compared to other legal entities - and in this chill world and against that background, I can't see the CIC Regulator's budget and staffing growing ..... 

And on a practical point - perhaps not all CICs really see themselves as social enterprises? Some are more "not-for-profits.

Cecile Gillard, Legal Manager, Burton Sweet 

Comment by Sylvia Gurr on December 1, 2009 at 22:01
Out of interest June did you have to pay for the Social Enterprise Mark that you applied for?

A general comment though is that there does appear to be an overall lack of knowledge and understanding about what exactly a CIC is, with both the General Public and bodies within the Third and other Sectors, and how CIC’s support social purpose.

This article on the Guardian website by Tom Pratt of Bates, Wells and Braithwaite Solicitors may be of interest to the CIC community. It gives some succinct answers to questions about CIC’s that often arise

http://www.guardian.co.uk/society/2009/dec/01/setting-up-community-...

Any promotion of CIC’s and regulated social purpose is good news I think!
Comment by Geof Cox on November 30, 2009 at 15:54
One of the reasons we have different views on this issue is precisely the diversity of social enterprise. There is a fault-line in the way we see social enterprise that goes directly back to the way it was popularised in the UK and sold to the labour government - that in turn led to a government definition of social enterprise that never made sense. I have outlined this fault-line in some detail elsewhere (see for example What's all this about social enterprise?, and also my blog on Why the number of social enterrpises just doesn't add up).
Unfortunately one way in which this fault-line emerged was the 'miss-selling' of the CIC form as a brand for social enterprise. Don't get me wrong - I think the CIC is a wonderful innovation - that does make a statement about genuine commitment to social enterprise - and I often whole-heartedly recommend it as the best legal structure for a social enterprise activity. But we have to be clear that social enterprise is much broader than this - or the social enterprise mark. ANY social enterprise mark, in fact, because the real point about social enterprise is not to pigeon-hole it in a distinct sector but to demonstrate that doing business primarily for social benefits is the best way for all of us to do business.
Of course there may be some short-term marketing gains from acquiring a social enterprise mark - but the hyping of social enterprise sits precisely on the fault-line - and a much better way of achieving the same kind of profile would be firmer links and financial support for already established objective standards that are really meaningful to the general public - such as the social-enterprise run Ethiscore.
The CIC Association has to find a practical way through all these different perspectives, and reflect where the real interests of its members lie. The objection to a 'double audit fee' for those who have already shown what they are made of by adopting the CIC form may in part be a response to the misselling of CICs as a brand for social enterprise in the first place, but it is a very understandable response.
Comment by June Burrough on November 29, 2009 at 1:46
Hello everyone. I am June Burrough the founder of the Pierian Centre. I hardly ever blog and am not that good at keeping up to date with debates - too busy trying to hold things together at the Pierian Centre mostly!! However, this debate seems quite important as there is a wide group of people that are not included in the CIC/ Social Enterprise Mark debate and it involves the whole of this rather amporphous group called the Third Sector - can anyone enlighten me on what that acutally is?! There has been an email from Peter Holbrook the new Executive Director for the Social Enterprise Coalition and that should not be ignored. In that he said "Let’s be united in our fight for social justice and celebrate the diversity of approaches that we use to achieve this". As I understand it, The Pierian Centre was the first CIC to apply for and gain the Social Enterprise Mark. It was a great thing to do and something of which we are proud, as it has increased our ability to talk about the whole Social Enterprise movement and within that the role that CIC's have to play. It gave us a reason to hold a celebratory launch which involved the CIC regulator who could use it as a platform to explain the CIC structure, and 160 guests from every sector and background, many of whom afterwards said they understood better what both a CIC and Social Enterprise actually meant. We used it to promote the much wider picture of what is going on in business and how it is possible to not just "do" Corporate Social Responsibility, but daily "live" a philospophy of social purpose being of ultimate importance. We had guests including the Leader of the city council, our local MP and many others who have position and influence and for whom the evening was really educational and informative. I am not sure that simply being a CIC is sufficient for gaining the SEM as it is at present structured. Social Enterprise as a movement is about a lot of organisations genuinely trading for Positive Social Impact rather than for profit as their prime purpose for trading, and therefore money becomes the energy resource needed to achieve that impact. There are a large number of Social Enterprises that are not CIC's. I think there are also some CIC's that would not qualify as a Social Enterprise under the criteria of the mark.. e.g at least 50% of income being from trading rather than funding. Some CIC's as I understand it are totally funded by grant aid, and therefore might not qualify? - they are therefore something else and that may be another debate.. BUT in the end the issue is for me more about profiling and extending the role of all organisations, groups or businesses who truly hold their social purpose as higher than making profit and see finance as simply an energy and resource which allows them to do what they are here to do - achieve more in the field of whatever they are trying to improve. We also perhaps need also to be wary of those who describe their endeavours as Social Enterprise but actually care more about making money and are using the "Social Responsibility" tag as a marketing tool.. We live in a world which is constantly having its paradigms challenged. Genuinely changing paradigms is really difficult -we are mostly wedded to ways of working and ways of measuring success that even the most radical of us still find hard to shed. Let us not take any high ground here, nor worry about an extra financial contribution to a movement whose heart is about promoting good practice and genuine social purpose to raise awareness about when these things are genuine and when they are not. I would prefer us to work together without making this a financial issue. That for me goes against the very nature of the way we should all be working which is to share our "profits" (if we ever make any?!) for the greater good of the world in which we are living.

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