Is it a not-for-profit organisation or a for-profit organisation? The case for a CIC structure in Australia

Australia’s not-for-profit sector has fundamentally changed. The sector was once informally organised and unconstrained by the exigencies of commercial and government pressures; at its core there was a strong sense of affection. However, in recent times the sector has exploded to become first a highly organised, competitive space and subsequently a significant economic contributor. Participants in this sector are now de facto organisational structures which function and behave as an extension of the government or as a for-profit company. These changes in behaviour raise questions: are Australia’s traditional not-for-profit structures out-dated, and is there a need to introduce a hybrid form of organisation? The starting point of this article is the significant change observed in Australia’s not-for-profit sector. From here this article discusses the way these changes have made it an increasingly challenging task to clearly differentiate between traditional not-for-profit organisations, for-profit organisations and social enterprises. This challenge illuminates the complexity and scope of organisational behaviour that has blurred the sector’s boundaries. Addressing this issue of blurred boundaries, the United Kingdom has introduced the structure of a Community Interest Company (CIC). Drawing on the UK experience and the identified changes in Australia’s not-for-profit sector, this article argues that a new organisational structure such as a CIC is needed. Lastly, this article will identify the shortfalls inherent in a UK-style CIC structure within the Australian corporate framework, and suggests ways in which they could be overcome.