A Community Interest company or CIC is a special type of company. Under UK law a CIC (sometimes pronounced ‘kick’) is a company that must be run for the benefit of a particular community (in our case this is the community as a whole, and in particular people who are in need as a result of old age, illness or ‘disability’). Like a charity, a CIC must pass a community benefit test, and has to report annually to ensure that it continues to do so. Like most companies but unlike charities, Directors can also be employees, and the company has to pay Corporation Tax on any profit.
Community Glue has been set up with very few overheads, so this means ‘no job is too small’: we can work on small projects that charities might think are a good idea but wouldn’t be able to afford to work on. These small projects can come from our own ideas, from our partner organisations, or from the ambitions of people who need extra supports as a result of poor health, old age or ‘disability’. As Directors and Employees, we can decide how much of the income we generate we use to pay ourselves. Again, this means we won’t judge whether a project is worth our time and energy purely because of the need to make it pay for itself.
In accountancy terms the ‘bottom line’ is the bottom line of the profit and loss accounts. Cigar-smoking plutocrats are often depicted in films waving aside any debate and saying ‘just give me the bottom line’, meaning ‘all I want to know about is the profit — everything else is irrelevant’. This is more-or-less the opposite of what we believe! We (and an increasing number of other organisations) now operate a ‘triple bottom line’ (sometimes knows as the ‘three Ps’).
People: We always consider the benefit of what we are doing for the community as a whole, and for the particular groups we are trying to serve.
Planet: We try to operate in a way that minimises the adverse impact of what we are doing on the planet. For example we usually cycle into work, organise our meeting so that they’re accessible through public transport, and rent our office space from a community centre.
Profit: Community Glue won’t pay dividends to shareholders and we’re not driven by the desire for personal gain, but money is still important because it lets us help people. We pay our employees the going rate for the work they do, usually based on the appropriate local government salary scale. In reality everyone does a lot of work for which they do not claim pay. At the moment we have to work this way, but in future we aspire to pay everyone properly.
In order to make sure that they are about benefiting the community, rather than making money for shareholders, CIC’s are subject to legal frameworks. The mechanisms to make sure they comply are an asset lock and a Community Interest Test .
Asset lock: This means that the company’s assets can only be used by the company for the public benefit (i.e. for the benefit of the community) or transferred to another asset-locked organization.
Community Interest: CIC’s are subject to legal scrutiny by CIC Regulator. The Regulator decides on whether a Company’s objectives meet the criteria for public interest when it registers. Each year Community Glue must also submit a ‘community benefit report’ to the Regulator, as well as the company’s annual accounts. The Regulator will use these to decide whether the company is meeting its obligation to benefit the public.