Social Enterprise – It’s Not Just for CICs
When I mention to people that Cygnet is a Social Enterprise, many people think that means it is a CIC or a community interest company. It doesn’t mean that at all. A social enterprise is a company that conducts it’s business with a social or environmental purpose and has nothing to do with legal structure.
When setting up a company it is always best to think about it’s purpose and how it will attract money, and then decide on a structure that fits.
Organisation Purpose is More Important than Structure
We originally had a company limited by shares and found that it limited the way we could work and stopped us from accessing funding that we needed to support those who are vulnerable or disadvantaged in society. So we took advice from an expert and decided to set up a company limited by guarantee, which gave us as directors protection but also gave us the advantage of being able to apply for grant funding from philanthropic organisations and individuals.
The Voluntary Sector
Having a background in the voluntary sector and having experience of sitting on charity management committees, I knew that a charity wasn’t for me. There are many, many charities that do a great job of supporting the most vulnerable people in our societies but there were clear disadvantages of having a group of people to decide on the strategic direction of the organisation. One of these is that it takes a long time to get agreement amongst several people. The people who are on the board are not allowed to be paid, except for expenses. This is to promote independent and impartial decision making. However the disadvantage of this is that most people need to pay their bills, so trustees tend to be heavily represented by certain demographics which limits diversity.
Looking for Change
When I set up Cygnet I wanted to be in control of the decisions made for the strategic direction, but I have bills to pay and so I need to be paid for the work that I do. I don’t think there is anything wrong with this. After all, charities do pay their staff.
I believe that the most important aspect of any organisation is the way it is conducted, that it is transparent and ethical, and this is not dependent on the structure of the organisation – it’s more about the ethics, values and systems of the organisation and the people who make the work happen on a day to day basis.
I have experience of good practice in charities and in CICs as well as other types of social enterprise. I have also witnessed questionable practice in charities, CICs and other types of social enterprise.
In researching this article I came across this one on Linkedin which is interesting and you might like to read. I am not an expert in company structures and in setting up your company you should seek advice from someone who is, or do your own research into the best structure for you.