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A friendly society (sometimes called a benefit society, mutual aid society, benevolent society, fraternal organization or ROSCA) is a mutual association for the purposes of
insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
, pensions,
savings Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an ...
or
cooperative banking Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world. Cooperative banking, as discussed here, includes retail banking car ...
. It is a
mutual organization A mutual organization, or mutual society is an organization (which is often, but not always, a company or business) based on the principle of mutuality and governed by private law. Unlike a true cooperative, members usually do not contribute ...
or benefit society composed of a body of people who join together for a common financial or social purpose. Before modern insurance and the
welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equita ...
, friendly societies provided financial and social services to individuals, often according to their religious, political, or trade affiliations. These societies are still widespread in many parts of the developing world, where they are referred to as ROSCAs (rotating savings and credit associations), ASCAs (accumulating savings and credit associations), burial societies, chit funds, etc.


Character

Before the development of large-scale government and employer health insurance and other financial services, friendly societies played an important part in many people's lives. Many of these societies still exist. In some countries, some of them developed into large mutually-run financial institutions, typically insurance companies, and lost any social and ceremonial aspect they may have had; in others they continue to have a role based on solidarity and democracy without an objective to make profit. The current position of the mutual benefit society in Europe is well described in a report from 2012, commissioned by the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
. Healthcare mutuals worldwide are coming together in Association Internationale de la Mutualité, a Brussels-based association of healthcare mutuals.


United Kingdom

Friendly societies in countries such as the United Kingdom were subject to prudential regulation to safeguard the financial interests of their members and secure the benefits promised to them, but the legislation (see for example
Friendly Societies Act 1875 The Friendly Societies Act 1875 was an Act of the Parliament of the United Kingdom passed by Benjamin Disraeli's Conservative government following the publication of the Royal Commission on Friendly Societies' Final Report. It was one of the F ...
) was separate from that applicable to insurance companies. In other countries friendly societies have no specific legal status, which means that they have to comply to the same rules and regulations as for-profit insurance companies. In some cases, especially in America, members typically paid a regular membership fee and went to lodge meetings to take part in ceremonies. If members became sick, they would receive an allowance to help them meet their financial obligations. The society might have a doctor whom the member could consult for free. Members of the lodge would visit to provide emotional and other support (and possibly to verify that the sick member was not
malingering Malingering is the fabrication, feigning, or exaggeration of physical or psychological symptoms designed to achieve a desired outcome, such as relief from duty or work. Malingering is not a medical diagnosis, but may be recorded as a "focus of c ...
). When a member died, the funeral would be paid for and the members of the lodge might attend in ceremonial dress. Often, there was some money left over for the next of kin. Friendly societies might also organize social functions such as dances, and some had sports teams for members. They occasionally became involved in political issues that were of interest to their members. Others were purely financial, with little or no social side, from their foundation—this was more typical in Britain. The first
mutual savings bank A mutual savings bank is a financial institution chartered by a central or regional government, without capital stock, owned by its members who subscribe to a common fund. From this fund, claims, loans, etc., are paid. Profits after deductions a ...
, founded in
Scotland Scotland (, ) is a Countries of the United Kingdom, country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a Anglo-Scottish border, border with England to the southeast ...
in 1810, was called the "Savings and Friendly Society".
Credit union A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including deposit accounts, provisi ...
s and other types of organization are modern equivalents. Friendly Society Brasses were the emblems of village friendly societies or clubs common in the
west of England West of England is a combined authority area in South West England. It is made up of the Bristol, South Gloucestershire, and Bath and North East Somerset unitary authorities. The combined authority is led by the Mayor of the West of England Dan ...
between the late 18th and early 20th centuries. The use of brasses as emblems was particularly prevalent in
Somerset ( en, All The People of Somerset) , locator_map = , coordinates = , region = South West England , established_date = Ancient , established_by = , preceded_by = , origin = , lord_lieutenant_office =Lord Lieutenant of Somerset , lord_ ...
and the surrounding counties. The
Museum of English Rural Life The Museum of English Rural Life, also known as The MERL, is a museum, library and archive dedicated to recording the changing face of farming and the countryside in England. The museum is run by the University of Reading, and is situated in Red ...
has a collection of over 900 Friendly Society Brasses aka poleheads. The design of the brasses was sometimes conventional or sometimes represented an interest of the club such as the inn in which the meetings were held.


Female friendly societies

Female friendly societies became a common form of friendly society in England during the 19th century e.g. the York Female Friendly Society, founded in 1788 by Faith Gray and
Catherine Cappe Catherine Cappe or Catherine Harrison (3 June 1744 – 27 July 1821) was a British writer, diarist and philanthropist. Life She was born Catharine Harrison in Long Preston in 1744, daughter of the clergyman Jeremiah Harrison, an associate of Fran ...
. Grey and Cappe ran schools for girls and this society was intended to assist them. Another early Female Society was the
Wisbech Wisbech ( ) is a market town, inland port and civil parish in the Fenland district in Cambridgeshire, England. In 2011 it had a population of 31,573. The town lies in the far north-east of Cambridgeshire, bordering Norfolk and only 5 miles ...
Female Friendly Society instituted on 1 February 1796.


Registration and regulation


Republic of Ireland

In Ireland, friendly societies are registered with the Registrar of Friendly Societies under the Friendly Societies Acts 1896–2014 (the Registrar for Companies is also the Registrar for Friendly Societies, Industrial and Provident Societies and Trade Unions). In 2014 the Friendly Societies and Industrial and Provident Societies (Miscellaneous Provisions) Act, 2014, provided for the cessation of new friendly societies; as a result no new societies may be registered. It was felt that the form of organisation had outlived its usefulness, largely for reasons mentioned above. When the minister's staff examined the register, it was found that only three new societies had registered in the previous nine years, as the use of the traditional friendly society types of business had become regulated elsewhere and a 'rump', which on examination are largely public-service types, remain (mainly army, customs, gardaí, and prison officers). Many of the others could expect to cease to trade if additional, or a normal regulatory environment was required (similar to companies, health and other business (loan organisations). The 2014 Act also provided that existing societies may not establish a 'loan fund' from the commencement of the Act (July 28, 2014).


United Kingdom

Friendly societies are registered under either the Friendly Societies Act 1974 or the Friendly Societies Act 1992. There are the following types of society registered under the Friendly Societies Act 1974: * friendly societies * working men's clubs * benevolent societies * cattle insurance societies * specially authorised societies The activities of these societies varies, but includes: * running a social club * providing discretionary benefits to members – for instance during sickness or unemployment * running sports clubs * managing allotments * insuring cattle Some friendly societies are still governed by the 1974 Act, although no new societies can be registered under that act. Friendly societies registered under the Friendly Societies Act 1992 are incorporated entities and are registered for effecting and carrying out contracts of insurance. Similar organisations were called
industrial and provident societies An industrial and provident society (IPS) is a body corporate registered for carrying on any industries, businesses, or trades specified in or authorised by its rules. The members of a society benefit from the protection of limited liability ...
. They are trading businesses or voluntary organisations. Recent legal developments in Great Britain include the
Co-operative and Community Benefit Societies Act 2014 The Co-operative and Community Benefit Societies Act 2014 (c.14) is an Act of the Parliament of the United Kingdom that received Royal Assent on 14 May 2014. Provisions According to its long title, the Act consolidates certain enactments rela ...
, which has renamed these societies as co-operative or community benefit societies. Examples include
co-operatives A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...
for consumers, workers, agriculture and housing,
working men's club Working men's clubs are British private social clubs first created in the 19th century in industrial areas, particularly the North of England, Midlands, Scotland and South Wales Valleys, to provide recreation and education for working class ...
s,
Women's Institute The Women's Institute (WI) is a community-based organisation for women in the United Kingdom, Canada, South Africa and New Zealand. The movement was founded in Stoney Creek, Ontario, Canada, by Erland and Janet Lee with Adelaide Hoodless being the ...
markets, allotment societies, mutual investment companies,
housing association In Ireland and the United Kingdom, housing associations are private, Non-profit organization, non-profit making organisations that provide low-cost "Public housing in the United Kingdom, social housing" for people in need of a home. Any budge ...
s and some
social enterprise A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. This may include maximizing social impact alongside profits for co-owners. Social enterprises ca ...
s. Many sports clubs are registered under these provisions. Friendly societies, alongside other mutual societies, are registered with the Financial Conduct Authority. Until December 2001, the regulator was the Registrar of Friendly Societies, and from then until April 2013 the Financial Services Authority.


See also

* Fraternal order *
501(c)(4) A 501(c) organization is a nonprofit organization in the federal law of the United States according to Internal Revenue Code (26 U.S.C. § 501(c)) and is one of over 29 types of nonprofit organizations exempt from some federal income taxes. ...
, United States tax law *
List of friendly and benevolent societies This is a list of Friendly society, friendly, mutual and benevolent societies. * AARP * Ancient Order of Foresters * Askrigg Friendly Society * Australian Natives' Association * Benenden Healthcare Society (UK) * Benevolent Irish Society (Canada) ...


References


External links


The Economic History Society Conference 2004: The Distribution of Female Friendly Societies across England in the Early Nineteenth Century

BBC Radio 4 Woman's Hour Jan 2002

Association of Financial Mutuals

APRA list of Friendly Societies in Australia
{{DEFAULTSORT:Friendly Society