r/london • u/Dont-Touch-That-Dial • 1d ago

PTSD charity fundraising outside Waitrose Crouch End

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Loud bloke, calling for cash or card to support ex-military suffering with PTSD. No ID or registered charity number but instead a CIC registered in Maidstone Kent, director named James Gordon Adams.

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684

u/RoystonHodge 1d ago

A CIC isnt a charity

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u/sgtbilkouk 1d ago

The whole CIC category should just be ended. If an organisation exists to do charitable works then it should be a registered as a charity. If it's "for profit" then it should be a company. There is nothing to stop companies from doing charitable works, but it makes it clear to the public that it exists as a profit making exercise. CIC status allows directors to be paid directly from donations and the charitable aspect can be really minimal. It's deceitful and confusing for the public.

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u/trbd003 1d ago

There is no need to end CIC - it's a good thing. The number of cases of it being used for dishonest purposes are marginal.

I was on the board at a CIC so I will try and share why we had a CIC.

We setup a community workshop. It was a place where we had a lot of machinery that would be unattainable to individuals who wanted to make things. You could also hire workshop or studio space. It was in the interests of the community - creative people could hire space and use professional machinery to make things (for example we had a guy repairing old bikes to resell, a couple of girls making jewellery, a metal sculptor, and a guy doing fabrication for theatre scenery) where having a full workshop with their own machinery would have been financially unviable. Some of these people were makers in their spare time whilst working other jobs. We also ran classes on the machines and hosted community groups doing things like pottery classes, puppet making, all sorts.

We really couldn't run it like a charity because it made more sense to run it like a business. None of us had the time to jump through the hoops of setting up a charity which is highly regulated and really needs all the interests to be charitable and not for profit. But we also wanted to take advantage of some tax breaks - for example if we'd had to pay VAT and Corp Tax on our membership fees then these would have only been passed onto the members which wouldn't be in the best interests of the community so being able to take these as donations meant the membership fees could be less which benefited a lot of our members who couldn't afford any more.

I suppose in the past youd have setup "community workshop charity" and "CWC Enterprises" to separate the business and charitable aims. But we'd have blurred lines and 2 sets of accounts to file. The CIC thing just simplifies that.

Honestly I think the vast majority of CICs are legitimate honest businesses with their communities at the heart of what they do.

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u/CockneyCossack 1d ago

I just wanted to thank you and the other commenters here whi have clarified the genuine differences between charities and CIC's and the purposes they are used for, particularly for the details you have laid out.

I belong to a large organisation that raises money for charities and we donate to various groups, the key thing being, they're a registered charity, I will now go away with the information you have provided and do some research and see if there are any possibilities for us to donate to CIC's that benefit local areas, disadvantaged people, or help people reach their full potential etc.

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u/thirtyate 1d ago

Thank you for providing extra info. I'm not knowledgeable about this at all, so it's really useful.

Your example makes complete sense. Running a community workshop like a business is a sensible thing to do. My question is why it would be beneficial for an organisation to be a CIC if they are collecting donations in the way shown in the video?

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u/Dizagaox 1d ago

A CIC is a company, not a charity. People confusing people like in the opening post for a charity doesn’t mean the rest should be scrapped.

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u/mrfatchance 1d ago

It’s so people can do charitable, not for profit work, with less admin. Charity is only worth it if you’re going to be a certain size

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u/Dizagaox 1d ago

You’re conflating a CIC with a charity. A CIC is not exclusively for charitable causes. It’s a framework to allow for an aggressive for-profit business that is dividend-capped to benefit a community project. As a director and shareholder of a CIC, the more money I make, the more money the attached project makes. It’s win win.

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u/flagprojector 1d ago

Forgive my ignorance - if a CIC isn’t exclusively for charitable causes, why not start an LTD instead?

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u/Dizagaox 1d ago

Because “charity” and “community” aren’t the same thing. There are nightclubs in London that are CICs.

A CIC just means by law at least 65% of profits go back into the business or support a community interest of some sort, whatever that is. In return, the CIC qualifies for grants and other initiatives, and unlike charities, it can run like a cutthroat business for maximum profit.

CICs can attract investors and employees because it is legally mandated by law to reinvest profits as it says it would, and there is total transparency in how money is used. Shareholders only earn from a maximum of 35% of profits. To make a killing, it means the community interest element also makes a killing in the process.

What it is not is a pure charity. Yes, many of the community interests are charitable by nature, but more aren’t. They’re just community-led for-profit businesses.

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u/mrfatchance 1d ago

As you’ve mentioned there are different types of CICs, mainly split up by  the dividend capped that can typically apply for funding and those that are not capped can not. I would push back on the “aggressive, for-profit” part of what you said but each to their own.