Wednesday, March 9, 2022

is the CIC Regulator deluding itself?

Long-time readers of this blog may have noticed that from time to time I write about Community Interest Companies (the legal form created for social enterprises as part of a wider government policy agenda for the social enterprise sector).

In the past, I've used research and evidence to 'ponder aloud' if CICs are actually

  1. more damaging to the wider social enterprise sector, than they are helpful (see here)
  2. eroding trust in social enterprises, because of how the CIC Regulator communicates with us all
  3. the most unsustainable of legal form for social enterprises  

But in a recent webinar for SocEnt Scotland, I'm wondering how far the CIC Regulator might be beginning to believe the hype about this legal form to the point that they're starting to believe things about them that aren't perhaps that accurate...

When asked as part of an interview and showcasing of the CIC form in the webinar, the Regulator replied that they're highly trusted based on the low numbers of complaints made against them in comparison with other legal forms.

And on the face of it, that's a fair statement to make, assuming that the figures back this up.

So let's see how many people I upset (again) by checking these figures...

I looked at data in the annual report from the CIC Regulator for the year 2020-21, and also for the Charity Commission for the same year (on the basis that charities are the most comparable legal form to CICs in being regulated on social/charitable purposes, having statutory asset locks, etc).

The CIC Regulator shows that of all the CICs registered, they only received complaints against 0.2% of them. Which sounds pretty good, until you realise that that's the same percentage as charities did - so CICs aren't having less complaints made against them if we allow for the difference between the number of charities and number of CICs. Which brings me to the next point I found in these annual reports... 

These regulators' annual reports also show that whilst there's a growth in the number of groups applying to be CICs, people and communities are about 20% more likely to want to register themselves as a charity instead of a CIC. Which would seem to suggest that people trust the charity form over the CIC form to help them achieve their social goals?

So, CIC Regulator - if you're going to make statements about how trust in CICs is better than the other choices out there, please make sure you've checked your sums first?

But, as always, I'm happy to reconsider and review and revisit this idea - I may have missed something in the data from these regulators when I've laid them out side by side, and the CIC Regulator may be privy to other data that's not easily accessible in the public domain? If that's the case, I'd welcome the opportunity to explore this further, and if it transpires I've mis-understood, I'll happily post again with an apology.  After all, one of my professional mantras has always been #ProveMeWrong...

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