What Is An IPS And Why Is It Relevant To A Supporters Trust?
An IPS is an Industrial and Provident Society and one of two options available to a Supporters Trust when considering their set-up/ structure (the other being a CLG or Company Limited by Guarantee). Supporters Direct recommend that an IPS is used and I'll get into the reasons why a little later.
After the Open Meeting has taken place (when all interested supporters meet to consider and vote on the Supporters Trust proposals) one of the next steps will be to decide the set up/ structure of the trust. We are currently planning for the Open Meeting (more news to follow in about a week's time) but presuming the Supporters vote in favour of the formation/ proposal, the odds are that an IPS will be the most effective structure to be utilised. In advance of this event potentially happening, I thought you'd want to know a little more about ISPs.
The definition of an IPS by the Financial Services Authority ("FSA") is an organisation conducting an industry, business or trade, either as a co-operative or for the benefit of the community, and is registered under the Industrial and Provident Societies Act 1965. When an IPS is formed it must be registered with the FSA although IPSs are not regulated by the FSA unless they are undertaking an financial services business.
Once the IPS has been chosen as the way forward and a suitable constitution agreed upon Supporters Direct will oversee its registration with the FSA and will also cover the costs of the registration.
So why do Supporters Direct recommend an IPS? Well the vast majority of existing Supporters Trusts have opted for this form of structure because of its community orientation, democratic ethos and robust regulatory framework. The attributes of an IPS is:-
1) Community Orientation - intrinsically part of the framework of the Trust
2) External Regulation - the FSA will not register rule changes that conflict with the requirement to operate for the benefit of the community
3) Robust Constitution - crucial rules such as the Objects, Powers and Application of Profits, may only be altered if there is a 75% majority in favour
4) Effective And Versatile - expericne has shown IPSs to be adaptable and powerful in varied circumstances
5) Not For Profit Motive - safeguards against "carpet bagging"
6) Growing Supporters Trusts Movements - offers additional "political" weight and influence in the wider world of football
7) Community Of Mutuals - offers opportunities for additional funding and partnerships with other co-operatives. Provides affinity with other organisations committed to benefiting the local community; and offers reassurance to the supporters and the club of the community orientation and not-for-profit objectives of the Trust
8) Start-Up Grant Funding - as already mentioned Supporters Direct pay for legal costs and expenses subject to eligibility
9) Limited Liability For Members - no need to put your financial security on the line; members are protected
10) Financially Responsible - effective in circumstances where significant sums of money have to be raised by public offer
I am the first to admit that I had not heard of an IPS until a month or two ago. In my line of work I set up and adminster trusts, pension schemes, trading companies, investment companies, property companies and other vehicles both for individuals and corporte clients but I have never come across an IPS before; probably because they are "one man one vote" not for profit vehicle for the benefit of its members and the wider community where profits are ploughed back into the IPS. The clients I tend to work for are there to make a profit which can be extracted at some stage in the future and they would not need an IPS!
If anybody has an questions on IPSs please e-mail us on firstname.lastname@example.org if we cannot answer them we'll speak to Supporters Direct! If you have any comments or input on this subject please also contact us.