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A short history of Mutual Societies

The first Mutual Societies were founded in the Victorian era by wealthy people who wanted to help those less fortunate. From 1828–1846 number of savings and friendly societies were formed and in 1852 a new class of mutual—known as an Industrial and Provident Society—was created.

An act of parliament requires community benefit societies to carry on a business intended to be for the benefit of the community, but the Act does not provide any further definition. This created a reliance on the Financial Conduct Authority’s registration guidance, which focuses on four key characteristics:

  1. Purpose: Conduct must be entirely for the benefit of the community.
  2. Membership: Community benefit societies have members and be run on a democratic basis.
  3. Profits: Any profit must be used for the benefit of the community and unlike a co-operative, profits cannot be distributed to members.
  4. Assets: Community benefit societies must only use assets for the benefit of the community. If a community benefit society is sold, converted, or amalgamated, its assets must continue to be used for the benefit of the community and not be distributed to members.

How community benefit societies work

Our Loanstock patrons loan money to Equfund and we use those funds to purchase rental properties.
Rent from our tenants to Equfund which we return to our patrons.
Societies inspired by the Rochdale Pioneers spread across the UK.

Rochdale Pioneers

Formed in the north of England in 1844, The Rochdale Society of Equitable Pioneers was an early co-operative and their principles are still followed by co-operatives today. One principle states that “co-operatives work for the sustainable development of their communities through policies approved by their members.”

These pioneers believed that shops owned by customers would be the best means of consumer protection and that profits should go to customer-members in the form of dividends instead of into the pockets of private shopkeepers. Co-operative societies inspired by Rochdale spread across the UK and are now found worldwide.