Can a CIC Fundraise? Here’s What You Need to Know
What is a CIC – or community interest company? You may have heard the term but not know exactly what it is – or why it is distinct from a charity. Well, a CIC is a company which aims to benefit the community, rather than the shareholders. Any profits made by the CIC will go back into the company to keep benefitting the community, accounts are publicly accessible and although CICs are similar to charities, they are registered with Companies House. And importantly, because of their nature, CICs can fundraise. If you want to fundraise for a CIC or your own, start a GoFundMe today to get going.
What is a CIC?
Community interest companies differ from regular companies – but also charities – in a number of ways. As mentioned above, all of the profits from a community interest company go towards helping the community and cause, not for private profit. The accounts of a community interest company are publicly available and any money made goes back towards the cause and helping the community. Assets of a community interest company are locked, meaning that they can only be used for the CICs objectives. Community interest companies are similar to charities, but they are registered with Companies House in the same way a conventional business would be.
Why fundraising matters for CICs
Importantly, fundraising matters for community interest companies in the same way it would a charity. Many people want to sustain community interest companies in their area in the same way they might want to support other good causes – because the CIC is giving back and doing good. CICs may want to fundraise to sustain their operations, launch new initiatives or projects or expand their impact. There’s a growing trend of fundraising for CICs on crowdfunding platforms – for everything from new equipment, permanent premises or HQs or even sustaining staff members. Take a look at what community fundraisers people are donating to here.
Can a CIC legally fundraise?
Understanding the legal framework
Community interest companies can fundraise like charities, but there are specific rules set by the CIC Regulator and Companies House. These include clearly informing the public that they are a CIC and not a charity, being transparent about fundraising activities in advertising and CICs that plan to fundraise regularly must inform companies house. CICs are also not entitled to the same tax relief as charities, such as GiftAid.
How can CICs fundraise?
Traditional fundraising methods
There’s a plethora of ways that community interest companies can raise funds. These include:
- Corporate sponsorship: Approaching businesses in the area and asking for sponsorship
- Hosting fundraising events: A really simple way to raise money for a specific cause in the community is by hosting fundraising events. This could be anything from galas or fairs to family fun days.
- Fundraising challenges: Don’t underestimate the power of traditional fundraising. Getting those who want to support you out and visible in the community by packing bags in supermarkets and asking for a small donation in return can really see fundraising grow.
Crowdfunding for CICs
There’s plenty of benefits to crowdfunding too if you are a community interest company or want to fundraise for a cause in your community. Crowdfunding is a really easy way to engage people who might want to donate – simply by setting up a free GoFundMe page and sharing it on your social media platforms you can engage potential supporters. And having a GoFundMe page set up means you can also publicise it at any events held, so there’s a ready-made place for people to donate. To start a GoFundMe you just need to visit this link to get going. Think of a snappy title and a fundraising goal (which can be changed at any time) and then tell the story of why you want to fundraise.
Tips for successful fundraising
So, you’ve decided to start fundraising for your CIC. There are a couple of really easy things you can do to make your fundraising journey easier and more successful.
- Writing a compelling fundraiser story: This is where you tell potential donors about why they should donate to your fundraiser. Go into as much detail as you possibly can about why you are fundraising, the backstory, how the cause benefits the community.
- Share on social media: Your social media channels are your platform to shout about your fundraiser from the rooftops. Use them! Post as much as you can about why you’re fundraising.
- Keep in contact with donors: This means posting regular updates to your GoFundMe page, texting, emailing, socialling – but also remembering to say thank you. This creates appreciation but also makes donors more likely to come back in the future.
Challenges to watch out for
Common pitfalls in CIC fundraising
If you’re fundraising as a CIC, there are a couple of pitfalls that you should be aware of. As mentioned before, it’s very important to be absolutely clear with the regulator if you are planning on regularly fundraising as a CIC. You must be clear on the mission of the CIC but also on what the fundraising goals for each specific effort are. It’s also important to make sure you’ve fully grasped the legal and financial responsibilities when it comes to running a CIC on the whole and also, making a concerted effort to outreach to relevant stakeholders when you actually launch your fundraiser.
How to overcome challenges
With the right tools, it’s easy to fundraise as a CIC. Providing you take into account the legal and regulatory considerations, many people want to back the community efforts that a CIC puts into their local area.
If you want to fundraise as a CIC or for a CIC, start a GoFundMe today.