It has been bought to our attention that some third sector specialist sexual violence organisations are being incorrectly told that LimeCulture CIC is a commercial organisation. So the purpose of this blog post is to explain exactly what kind of organisation LimeCulture is!
When we established LimeCulture back in the spring of 2011, we thought long and hard about what kind of organisation we wanted our new organisation to be. Because of the type of work that we wanted LimeCulture to do – i.e., support frontline organisations and their organisations to support victims of sexual violence – our initial preference was to become a not-for-profit charitable organisation. However, we were not really certain about the scope of our future work or indeed how far we would be able to go in pursuit of our aims to support professionals and organisation. Because of this, we were advised by many different people to consider a different organisation formation to that of a Charity. We were told that the Charity status is quite rigid, as it has to operate very clearly by a ‘governing document’ (which is the legal document that sets out what the charity will do). At that stage, we weren’t completely sure what LimeCulture might look like, or what work we would be doing so we decided that we might be better suited to an alternative type of organisational structure.
We started to do some digging into organisation formations and came across a type of organisation known as ‘Social Enterprises’. Social Enterprise UK explain them as being ‘businesses that trade to tackle social problems, improve communities, people’s life chances, or the environment. They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community. And so when they profit, society profits’.
This matched our aims and objectives perfectly! We wanted to create a Social Enterprise! The next step was to work out how to actually go about that! What needed to be done from a legal perspective, and how to go about it! We sought advice from an accountancy firm, who asked us lots of questions about the actual work we wanted to do and how we planned to operate the Social Enterprise. They told us about a new breed of Social Enterprise that was becoming more and more popular across the UK, a legal formation that is known as a Community Interest Company. The Government had recently introduced them and they were growing more and more popular.
We considered this in detail and decided that this was the type of Social Enterprise we wanted to be! In short, a Community Interest Company (or a CIC as they are often known) is an organisations which trade with a social purpose (i.e., social enterprises) or carry on other activities which benefit the community. Tick.
The accountancy firm explained to us the important thing about a CIC is that there is an ‘asset-lock’, which means that any assets or profits made by the organisation must be primarily devoted to the benefit of the community – or in other words, the social purpose of the organisation – and not to line the pockets of the owners or the stakeholders. Tick. This is what we wanted! We wanted to ensure that any money the organisation made would be ploughed straight back into supporting our aims. That is, to continue our goal of supporting frontline professionals and their agencies to respond to victims of sexual violence.
The great benefit of a CIC is that it utilises the familiar structure of shareholders and directors and has an easily understood corporate governance system, which means the people we would have to deal with such as banks, suppliers and advisers would be used to dealing with a company. Tick. When we’d asked around, lots of people were not quite sure what a Social Enterprise was, so told us to be wary of this being a disadvantage to us. We certainly didn’t want the type of organisation that we were to become to have any negative impact on us doing our work. So this was perfect if people understood CICs and they are acceptable to others who we would do business with!
So off we went, thrilled that we had agreed on the type of organisation we wanted LimeCulture to be! However, we hadn’t quite realised how much work actually went into setting up a CIC! You see, you have to apply to Companies House, and include a ‘community interest statement’, explaining what your business plans to do. Although not as rigid as a Charity’s Governing Document, it still required us to state what our aims and objectives were to be. You also have to create the ‘asset lock’, which essentially involves making a legal promise stating that the company’s assets or any profits will only be used for its social objectives, and setting limits to the money it can pay to shareholders. Once you’ve done all that, you have to get it approved by the Community Interest Company Regulator!
At the same time that we were doing this, we actually started working on LimeCulture and marketing our new organisation! We launched our first ISVA Development Programme and started taking bookings and calls from organisations who wanted to work with us. Brilliant! By the summer of 2011, the work of LimeCulture was well underway, but alarmingly the life of LimeCulture was going faster than we were able to set up a Community Interest Company! Due to the fact we needed to trade quickly, we needed insurance and we needed a bank account, our accountancy firm advised us to set up a Limited Company as a holding position. You can set up a company in the space of a day! So, we took their advice and created LimeCulture Ltd until our CIC status was agreed by the Regulator. Once that approval came through from the Regulator, we were able to convert to a Community Interest Company and we have been operating as one ever since!
Being a Community Interest Company suits us brilliantly. It is flexible enough that if we want the organisation to move in a slightly different way, we can do that as we are not constrained by a strict Governing Document that we have to abide by. It allows us to trade and work with stakeholders in a way that they are familiar with. Banks and insurance companies understand what a CIC is, as do phone companies and catering firms, and training venues! All the commercial businesses that we need to work with in order to operate our programmes, are willing to work with us.
However, most important to us, is that the services, agencies and organisations that we work with – the many charities, NHS Trusts, Police forces, government departments can work with us safe in the knowledge that the money that we make goes straight back into the work of the organisation. There is no profit to be made from tax payers money or Charity money and nobody in LimeCulture is getting rich as a result of the work we do!
So when we found out that some third sector organisations were being told that we are a commercial organisation, it could not be further from the truth! In fact, we have jumped through hoops to make sure that we can operate as a Social Enterprise and we are regulated to make sure that we meet the criteria to do so!
In addition, we want to make it clear to the third sector specialist sexual violence services who have been given the incorrect information about us, that LimeCulture is also not a frontline service provider. This means that we do not provide services to victims of sexual violence ourselves. Essentially, we are a second tier organisation specialising in professional training and development. We do not employ ISVAs or counsellors and nor do we ever intend to. Crucially, this means that we are not a competitor to the people that we work to support!
LimeCulture CIC is a specialist sexual violence social enterprise specialising in training & development. Our Advisory Board, chaired by Baroness Gould of Potternewton, provides the strategic governance & oversight of the organisation.