The Charity Sector Finally Noticed CICs Exist — But Probably Not in the Way We'd Hoped

The Charitable Incorporated Organisation conversion regulations came into force this year, creating something the CIC sector has never had before: a formal pathway to convert from a CIC to a charity. It’s a strange moment. After thirteen years of trying to establish CICs as a distinct and valuable legal form, we now have a mechanism for CICs to cease being CICs and become charities instead.

I have mixed feelings about this.

On one hand, the fact that the Charity Commission and Companies House have worked together to create a conversion pathway is a recognition that CICs exist and that there should be a way to move between structures. That’s progress from the days when CICs were treated as an incomprehensible oddity.

On the other hand, the direction of travel matters. The conversion pathway is one-way only for practical purposes: CIC to CIO. You can’t easily go from CIO to CIC. The implicit message is that charity status is the destination and CIC status is a staging post. That’s not how I see the CIC model, and it’s not how most CIC founders see it either.

The reality is that some CICs will benefit from converting. If your model is purely grant-funded, if you don’t need to raise equity investment, if the asset lock and charitable purposes of a CIO align better with your activities, then conversion makes sense. The option should exist. Having it is better than not having it.

But I worry about the signal it sends. At a time when the CIC movement is growing faster than ever, having a conversion pathway to charitable status could be read as: CICs are a temporary form on the way to something more established. That’s not the narrative we need.

The CIC model isn’t charity-lite. It’s a different approach to social purpose altogether, one that embraces commercial activity, encourages investment, and holds itself accountable through a regulatory framework designed for businesses with a social conscience. Converting to a charity would be a step backwards for most CICs.

We’ll see how the numbers play out. My guess is that the vast majority of CICs won’t convert. But the fact that the option now exists is worth noting — and worth watching.