CIC or Charity? Navigating the Best Path for the Grange Project

As we move forward with the Grange Project, we're faced with some important decisions regarding its structure. A key question has arisen: should we set up the Grange Project as a Community Interest Company (CIC) or a Charity? Let's take a moment to compare these two models, considering the unique context and aims of our project.

Community Interest Companies (CICs)

A CIC is designed for social enterprises that want to use their profits and assets for the public good. Given that the Grange Project aims to enhance biodiversity, increase carbon sequestration and create a community hub, CICs could offer us a viable option.

A major advantage of CICs is their flexibility. They are allowed to carry out a broad range of activities, generate profits (for the benefit of the community), and pay salaries to directors. As we plan on engaging in various activities to generate income in order to support the Grange Project, this operational flexibility could be a significant asset.

However, CICs must pass the 'community interest test' to show that their work benefits the community, this is assessed by the CIC regulato. Also, a CIC has an 'asset lock' ensuring the company’s assets, which could include anything from our Shepherd’s Huts to any excess profits made, are dedicated to the community and cannot be sold or used for private benefit.

Charities

Charities, on the other hand, are established exclusively for charitable purposes and provide a public benefit. Given the intentions of our project, this model is also worth exploring.

Charities have access to significant tax reliefs and eligibility for grants that are not available to CICs. But, on the flip side, they are bound by more stringent regulations and reporting requirements, we would also have to identify suitable trustees who would ultimately set the strategic intention for the project. Charities are not typically allowed to distribute profits and cannot usually pay trustees, except under specific conditions.

So, CIC or Charity for the Grange Project?

The choice between a CIC or a Charity is not a straightforward one. It’s likely we would be able to access more sources of funding as a charity, but we’re concerned about the loss of flexibility and the demands of the reporting requirements and the trustee structure. Furthermore, it’s possible some of our initiatives may not be clearly defined as ‘charitable activities’ and, as such, we are likely to benefit from having commercial flexibility.

The good news is that once a CIC is established, it’s also possible to shift the structure to a charity - so that option will always be available to us.

The decision needs careful consideration, perhaps with professional advice. Regardless of the chosen path, the primary intentions of the project remains the same: nature recovery and community connection.

We hope this comparison provides some clarity in our shared journey towards making the Grange Project a reality. As always, we welcome your thoughts and queries.

Best wishes,

Chloe & Tom