It's the legalized side of a trust which is a legal entity. Whilst its not strictly necessary to be a trust it does have advantages - if you porkmeister if anyone else wants to see what these are I would steer you towards the supporters direct website where they explain it all in more detail than I can here.
Thanks Jan. Still struggling to see the tangible benefits of being legal but here is the gumf from the website:
Why form a Trust? How does it differ from an Independent Supporters' Assocation or supporters' club?
We'd categorise the main difference between a Trust and an ISA as being twofold - ‘attitudinal' and ‘organisational'.
The organisational one is easy: It's our belief that an Industrial and Provident Society (IPS) offers the best way forward for supporters' groups as its legal assets can be owned 'corporately' in a group rather than being vested in individuals. Members also get the benefit of limited liability (and so do the elected officers in most cases) - members are only liable for £1 if anything goes wrong - for example, if the Trust is sued.
As a corporate body, the full force of the law can be brought to bear on anyone who misappropriates the funds. It's also democratic and not-for-profit and states clearly and boldly that a key aim is the securing of representation and strengthening the links between club and community. It's got the 'big idea' that helps get an organisation off the ground - the idea at the heart is "why always be criticising, when we can be running and participating - we think we can bring huge benefits to the club, so give us a chance - to own the club we love (or a part of it)".
As an IPS can own shares or property, it is a vehicle that can ultimately own the club, and at the very least, own a significant shareholding. It can sign contracts with the club for shares received and set the terms of the deal. An ISA (Independent Supporters Association), supporters club or other supporters' group which is unincorporated is on much shakier ground in that regard. So an IPS is robust and can grow with you. The powers exist to employ staff, contract pensions and manage people within a democratic structure. There are businesses that are IPSs that are much bigger than supporters' trusts and clubs. The Co-op Group for example has a turnover of approximately £9 billion each year.
Supporters at a number of clubs have been able to take advantage of their situation by being an IPS. An ISA would be equally concerned about the situation at a club in serious financial trouble, but might struggle to actually buy the club - so just who would buy it exactly? They can raised money and campaign, they want to secure the future of the club, but would they see it as something they could and should do? That's not to disparage those sorts of groups, just to indicate that instead of it being something they might do, it's something a Trust is explicitly there to do.
Finally, the people who get involved in a trust as members know that their money is protected; it can't be spent on anything other than what the constitution says, and anyone who does this can be taken to court.
However, an ISA could still be a trust in the sense that it could convert to be an IPS and want a place on the board - this is where the attitudinal side comes in; it's about putting a professional face to the club and saying 'we're capable, skilled people with something to offer the club.' That doesn't mean that you're unable to criticise or beholden to the club - as a democratic organisation, the members determine your policy and stance towards the club.
An IPS imposes certain disciplines on a group that we think can only be a good thing - democracy, accountability and transparency, and this can only reinforce the points you make. Basically, it comes down to what you want a body to do. In our view, an ISA, whilst a perfectly legitimate form of organisation, often becomes identified with a small band of individuals and might always seems to be criticising (even if it isn't in reality!). It is also limited in how it can grow, and how secure that growth is. A trust, constituted as an IPS stays in existence until its members decide to dissolve it, and so they have greater ability to stay around. Often, ISA's go into a lull when key individuals become inactive. All these are of course applicable to a trust, but the disciplines we mention above make it more likely that weaknesses are identified and rectified. For starters, the act of becoming an IPS is a collaborative effort so you need a good team from the off.
- Supporters Direct will influence policy and campaign on your behalf to ensure change that promotes and encourages:
- supporter representation
- community ownership
- Spectator sports clubs that protect and enhance their social value
- Better regulation to help achieve the above aims
- Supporters Direct will provide you with the tools you need to run an effective supporters' trust
And the more trusts that join, the more we can negotiate deals for member trusts which are better value than individual trusts acting alone can get. We can also commission specialist guidance on issues like director’s responsibilities, or the new Companies Act, and then make it available to trusts free of charge.
