When a Charity Collapses and Nobody Asks About CICs

Kids Company collapsed a few days ago. A charity that had raised over £200 million from government and donors, that had been celebrated by politicians and celebrities, that was held up as proof that the voluntary sector could deliver public services — and it fell apart in a matter of weeks.

The post-mortem has been brutal. Questions about governance, about financial controls, about whether the board was providing proper oversight. The Charity Commission is investigating. MPs are demanding answers. The future of public service commissioning is being debated all over again.

And through all of it, nobody has asked the obvious question. Would this have happened if Kids Company had been a CIC?

I’m not suggesting the CIC model prevents all failures. But the structural features that CICs have — the asset lock, the community interest test, the annual reporting requirements, the independent regulator with enforcement powers — create a governance framework that charities don’t always have. The asset lock alone would have forced a different conversation about how Kids Company’s buildings and resources were managed.

The Kids Company collapse is a tragedy for the vulnerable young people it served. But it’s also a wake-up call for the entire social sector about governance, accountability, and the risks of relying on a charity model that wasn’t designed for the scale of public service delivery that Kids Company was attempting.

CICs were designed for exactly this kind of challenge. They combine the mission focus of a charity with the governance discipline of a company. They have a regulator who can actually investigate and enforce. They have a structure that makes it harder for governance failures to hide.

But nobody’s asking. The conversation about Kids Company is happening entirely within the charity framework. The CIC alternative — which might have prevented at least some of the governance failures — isn’t even on the table.

That tells you something about how far we still have to go in getting the CIC model understood by the people who make policy and shape public debate. Ten years, ten thousand CICs, and we’re still invisible when the biggest social sector story of the year breaks.

I’m not saying CICs are perfect. I am saying that the Kids Company questions should be being asked of us too.