Our process of becoming a constituted Industrial and Provident Society
Our incorporation process has taken a little while. We had to find the right structure for London Community Herbalists. When you are full of ideas and plans the need for structure can seem bureaucratic and dull. In the end was journey, if painful at moments, was satisfying and worthwhile.
The first thing we learnt was that to get any funding we had to become a not-for profit group, get a bank account and a constitution. A constitution is basically a set of rules. It sets out things like how often you'll meet, how you'll ratify any decisions you make, how people can join, what you're minimum number of members are etc. It also gives potential funders reassurances that you have semi-legal structures in place. One great piece of advice we were given was to write it for ourselves, how we wanted to work and not to try to guess what we thought we should do. It is not necessary for this to take too long - but you do have to think of a name! The Charities Commission and local voluntary sector organisations have standard constitutions.
Our next decision
was to consider which structure we wanted our group to have
The were several options.
- Non incorporated groups - a not for profit group, social business, co-operatives
- Incorporated groups - Company limited by guarantee, company limited by shares, Industrial and provident society
- A Registered charity
The question of incorporation
We chose to use the structure we did for reasons other than that it was incorporated. But as the group has progressed and begun to deliver actual projects it has gained more relevance. Incorporation means limited liability. Which means if the group were sued individual group members would not be liable. This may not seem that important when you are first setting up but once you become involved in actual projects -someone drops a spanner off the roof and you hadn't taken the necessary health and safety precautions - it becomes more meaningful.
The question of charitable status
For a while we considered becoming a charity. Most lottery type funders no longer require charity status. But lots of grant making trusts still do. The disadvantage for us in this was that we would have to find a management group of trustees who could not be involved in any paid work that the organisation undertook. Some groups have active trustees who can be supportive with skilled and expert input that can be valuable to a group. Others have workplace groups who make all the decisions and then get the board of trustees to rubber stamp them. Some mental health and other medical charities bring service users onto the board of trustees to make sure the their voice is represented in the organisation. It's a model that works fine for some groups. To some extent charity organisations have their roots in Victorian philanthropy where middle and upper class women could divert their energy into helping the deserving poor and work for their favourite good causes. It's modern relevance and justification is the idea that by not being paid the trustees maintains independence from vested interest.
The problem for us was that we believed we had the skills to dream and deliver and manage our vision of accessible herbal medicine in our communities. At the same time we believe we deserve to earn a living from doing so. We wanted all members to have the opportunity to be involved at every level from management to project work.
Industrial and Provident societies
We plough and sow -we're so very very low
That we delve in the dirty clay,
Till we bless the plain with the golden grain,
And the vale with fragrant hay,
Our place we know -we're so very low,
'Tis down at the landlord's feet:
We're not too low the bread to grow,
But too low the bread to eat.
Another form of social organisation was evolving at about the same time as Victorian philanthropists were setting up charities and congratulating themselves on how humane they were. Ordinary people were organising amongst themselves - Tailors, cord wainers, flax dressers, wool combers, ordinary working men and women who wanted to make their own decisions. In 1833 a group of farm workers from Tolpuddle in Dorset formed the 'Friendly Society of Agricultural Labourers'. They were deported to Australia and given 7 years hard labour for their honest efforts (now known as the Tolpuddle Martyrs). The movement that they ignited spawned the first industrial and provident societies.
An industrial and provident society is a corporate body registered under the Industrial and Provident Acts 1965-78.
This is the model we have chosen to adopt. When we first looked into it we were told on several occasions that the process was obscure and would require expensive specialised help. We didn't believe it. If Leyton Orient supporters club could be an Industrial and Provident society (IP), then surely we could! It turned out that the legal advisors don't have much experience of this form of incorporation because it is something people generally do themselves. In fact it is quite common - working men's clubs, housing associations and Women's' Institutes often have this structure.
Once we had done a little research into IP's we realised that its structure was ideal for our purposes; IP's have limited liability but are not as restrained by the weight of the bureaucracy of a charity; they can be not for profit or have yearly dividends; and our rooted in a history of working co-operatives. So in idealistic and practical terms an IP was everything we wanted. The process of becoming an IP can be time consuming, relatively expensive and the paperwork may look daunting but if we did it anyone can and it is very satisfying once it's done. We are not precious about sharing our process. Lift any bits you like from our constitution. Or all of it. And if you want any advice about becoming an industrial and provident society, then don't hesitate to contact us.