My 2024 Case for Performance-Based Investment in CICs — What's Changed in a Decade?

I published a paper this year. “Unlocking the True Potential of For-Profit Social Enterprise: A Strategic Case for Performance-Based Investment in CICs.” It’s been a while since I wrote anything for public consumption, and I wanted to see whether the arguments I’ve been making for a decade still hold up.

They do. More urgently than ever.

The paper makes a simple case. Only 16% of CICs are structured as Limited by Shares — the form that can actually raise investment. The remaining 84% are Limited by Guarantee, which means they’re dependent on grants, donations, and retained surplus. If CIC Limited by Shares were supported to reach parity with their guarantee-based cousins, the paper projects an additional £13 billion in social enterprise economic activity, powered by investment rather than subsidy.

That’s not a fantasy. That’s a calculation based on existing data.

The paper looks at what’s been tried — Social Investment Tax Relief, the dividend cap reforms, the community shares exemption push — and concludes that none of it has gone far enough. The structural barriers that I identified in the “A Fair Share” report in 2013 are still largely in place. The share structure is still suboptimal. The performance loan market is still dormant. The FSMA exemption for CICs still hasn’t happened.

Twelve years of advocacy, and the fundamentals haven’t changed. That’s either a testament to my persistence or a sign that I’ve been banging my head against the wrong wall.

The paper proposes a focus on performance-based investment — instruments that align investor returns with social outcomes, creating a genuine market for CIC investment rather than relying on grant-style subsidies or charitable donations. It’s a model that could work, if the regulatory framework were adjusted to support it.

I’m not sure this paper will be the one that finally moves the needle. But I wrote it because I believe the case is stronger now than it’s ever been. The social investment market is over £10 billion. Institutional investors are interested. The CIC movement has 30,000 organisations and growing. The pieces are in place for a breakthrough.

We just need someone to connect them.