Friday, July 3, 2009

is social enterprise being forced to become charitable?

In 2006, there was an overhaul to charity legislation, which included extending those things that are deemed to be 'charitable' in law, and so organisations created to pursue them are now legally required to gain charitable status (and all that comes with it with regard to governance, restrictions on trading, etc)...

An example of this is in respect of the charitable purpose of preventing or relieving poverty (surely something that all social enterprises aspire to) and how it can be acheived through Fair Trade; it caught my eye and gives me pause for concern:

"To prevent or relieve poverty by awarding a 'fair trade mark' (and remember that there are now 'social enterprise marks') to products, the sale of which relieves the poverty of producers by ensuring they receive at least a fair price for their goods and advising such producers of the best ways in which to engage in the trading process."

But Fair Trade is about trading not charity - so the lines between charity and enterprise are becomming even more blurred with what some would see as being quite a fundamental social enterprise activity now apparently being charitable in purpose, and so any social enterprise created to purse fair trade (or similarly 'marked') activities now being legally required to adopt chaitable status, even if they felt another form would suit them better...

Are we then now entering an age where as social enterprises we are being forced to change our purposes in order to ensure we can adopt the legal form that best meets our needs and circumstances?
Is the state perhaps becomming too prescriptive in allowing us the market freedoms we need in order to fully realise our potential?


  1. I'm not aware of any legislation requiring organisations whose objectives are charitable in law to seek charity status. Could you point me to where the law says that?

    If not I'll go on assuming that social enterprises can choose whichever organisational status suits them best, be that a registered company, an unincorporated association, a chairty or a charitable incorporated organisation.

  2. thanks for your query 'anonymous', and in answer, the charity commission have quite clear guidelines on this - see:

  3. What about CICs who cannot gain charitable status, are we to see a migration from CLG to CIC