Understanding Asset Locks, Profit Locks, and Mission Locks

At Do it Now Now (DiNN), we’re on a mission to empower Black and Global Majority-led charities and social enterprises to thrive. Our Blended Finance Programme, "Big Business," is a key initiative that underscores this commitment. This programme removes barriers, reduces risks, and equips organisations with the funding and tools they need to achieve long-term sustainability.

Big Business goes beyond traditional funding by combining innovative financial approaches with capacity-building support. This unique blended finance model not only addresses immediate funding needs but also builds capacity for sustainable growth. Focused on tackling urgent issues like poverty alleviation and racial equity, Big Business supports organisations rooted in lived experience and delivering services in England’s most underserved communities.

This dedication to equitable funding is why we’re passionate about educating our community on foundational tools like asset locks, profit locks, and mission locks. These mechanisms are critical for any organisation striving to align operations with purpose and scale meaningful impact.

1. What Is an Asset Lock?

An asset lock is a safeguard that ensures an organisation’s assets—like funds, buildings, intellectual property, or equipment—are used exclusively for its mission. These protections prevent assets from being distributed to individuals or used for private gain, even in cases where the organisation dissolves or winds up operations.

Who Already Has an Asset Lock?

Organisations such as Community Interest Companies (CICs), both limited by guarantee and shares, are legally required to have an asset lock in place when they adopt the model articles during registration. Charities and Charitable Incorporated Organisations (CIOs) also have asset locks embedded within their governance structures by law. However, Companies Limited by Guarantee and Companies Limited by Shares may not automatically include asset locks unless specifically written into their governing documents. Constituted Non-Profit Groups often include asset locks as part of their constitutions, but Sole Traders and Limited Partnerships typically do not have asset locks unless explicitly incorporated into agreements. An asset lock is a safeguard that ensures an organisation’s assets—like funds, buildings, intellectual property, or equipment—are used exclusively for its mission. These protections prevent assets from being distributed to individuals or used for private gain, even in cases where the organisation dissolves or winds up operations.

How It Works:

• Assets can only be transferred to organisations with similar objectives.

• Typically embedded in the organisation’s legal documents or bylaws.

Why It Matters:

Without an asset lock, there’s a risk that assets could be diverted to purposes that don’t align with your mission. For example, if a social enterprise closes, its remaining funds might be redirected to a like-minded charity rather than being pocketed by shareholders.

Example: Community Interest Companies (CICs) in the UK are legally required to have an asset lock to protect their resources.

2. Profit Lock: Keeping Resources Focused

A profit lock ensures that profits generated by the organisation are primarily reinvested into its mission rather than being fully distributed to shareholders or owners. This mechanism often includes a dividend cap, which limits the percentage of profits that can be distributed as dividends.

Who Already Has a Profit Lock?

Community Interest Companies (CICs) limited by shares are required to have a dividend cap, ensuring that profits are largely reinvested into the business. Charities and Charitable Incorporated Organisations (CIOs) must reinvest all profits into their charitable purpose by law, effectively acting as a profit lock. Companies Limited by Guarantee may adopt profit locks voluntarily but are not required to do so. Companies Limited by Shares, Constituted Non-Profit Groups, Sole Traders, and Limited Partnerships generally do not have profit locks unless explicitly stated in their governing agreements or articles. A profit lock ensures that profits generated by the organisation are primarily reinvested into its mission rather than being fully distributed to shareholders or owners. This mechanism often includes a dividend cap, which limits the percentage of profits that can be distributed as dividends.

How It Works:

• Profits are allocated to grow programs, scale impact, or sustain operations.

• Dividend caps set a limit on how much can be paid out to investors.

Why It Matters:

While attracting investment is important, excessive profit distribution can derail the mission. A profit lock balances the need for financial sustainability with social or environmental objectives.

Example: A social enterprise may reinvest 70% of its profits into expanding its programs, while distributing the remaining 30% to investors under a dividend cap.

3. Mission Lock: Protecting Purpose

A mission lock ensures that an organisation’s core purpose remains central, regardless of leadership or ownership changes. It’s a way to legally embed your mission into your DNA, so it can’t be altered for financial or other gains.

Who Already Has a Mission Lock?

Charities and Charitable Incorporated Organisations (CIOs) are legally required to have their mission embedded into their governing documents, ensuring compliance with their stated purposes. Community Interest Companies (CICs) also have mission locks built into their structures, requiring them to demonstrate community benefit. Companies Limited by Guarantee may include a mission lock voluntarily, but it is not a default feature. Companies Limited by Shares, Constituted Non-Profit Groups, Sole Traders, and Limited Partnerships generally do not have mission locks unless specifically written into their governing documents or constitutions. A mission lock ensures that an organisation’s core purpose remains central, regardless of leadership or ownership changes. It’s a way to legally embed your mission into your DNA, so it can’t be altered for financial or other gains.

How It Works:

• The mission is written into governing documents like articles of incorporation or bylaws.

• Compliance is often monitored by regulators or certification bodies.

Why It Matters:

A mission lock protects organisations from “mission drift,” which can occur when external pressures or leadership changes threaten the original purpose.

Example: Certified B Corporations are required to legally lock their mission into their corporate structure to maintain their certification and accountability.

The Synergy of Locks: Why They Work Together

Asset locks, profit locks, and mission locks aren’t standalone mechanisms. They’re complementary tools that ensure:

• Resources are protected (asset lock).

• Profits are reinvested for impact (profit lock with dividend cap).

• The mission remains central (mission lock).

Together, these safeguards create a robust framework for purpose-driven organisations to thrive while staying true to their values.

Designing for Impact

At Do it Now Now, we believe in unlocking the full potential of organisations that aim to make the world a better place. By embedding these locks into your business model, you’re not just protecting your mission—you’re building trust with stakeholders, attracting aligned investors, and ensuring that your impact scales sustainably.

Through initiatives like Big Business, we are not only addressing systemic barriers but actively creating pathways for equitable growth. Let’s work together to ensure your organisation thrives, your community flourishes, and your mission endures. Whether you’re starting a new venture or reevaluating your existing operations, we’re here to support your journey to lasting, meaningful change.