Joining a governing body like IFC gives you all kinds of special privileges and allows you to also have university recognition, which a lot of national chapters require for them to have a charter. The IFC also exists to allow fraternities to govern themselves with minimal oversight of the university because there are so many greek organizations and the university would probably spend tons of time dealing with small issues in the fraternity world. Also the university doesn't really want to have it's hands too far into greek life so they like to let orgs govern themselves so they remain at an arms length away from any blame that comes with them and can disown an organization very easily.

How an org deals with the borough the police is something totally different. The IFC doesn't protect you from the police lol if you're obviously breaking the law trust me they will do what they have to do. The IFC is the governing body between the university and the orgs, not the borough. That's why houses have borough points and can lose their house if they obtain too many borough points for stupid stuff like trash in their yard or not mowing the lawn or so on and so forth. A fraternity is for the most part on it's own as an org when it comes to dealing with the borough the IFC doesn't usually get involved.

There are plenty of "business" frats that aren't a member of any governing council, they are co-ed and have houses. They have greek letters too. The houses are nothing like the IFC frats and they claim they're just as good as IFC frats, but I'll leave that to someone's own opinion.

Source: Former IFC Exec, Former Chapter VP, blah blah dealt with all this stupid bullshit on a daily basis because I'm stupid.